Assets under management (AUM) grew 35% to ₹3.10 lakh crore during the quarter from ₹2.30 lakh crore a year ago led by a strong growth in two- and three-wheeler finance, urban loans and SME lending.
As a result, net interest income (NII) or the difference between the interest earned from loans and that paid for deposits increased 29% to ₹7,655 crore from ₹5,922 crore a year earlier.
The company booked 9.86 million new loans during the quarter, up 26% year-on-year. Total customer franchise stood at 80.41 million, up 22% from 66.05 million a year ago.
Profits rose despite the company increasing its loan loss provisions during the quarter by 48% to ₹1,248 crore as against ₹841 crore a year ago. Operating expenses also increased 22% year-on-year.
Provisions increased despite asset quality improving with gross non-performing assets (NPA) at 0.95% down from 1.14% a year ago. The company has a provisioning coverage ratio of 62% on NPAs as of December. Bajaj Finance has also made excess provisions of ₹590 crore.
“While net interest margin continues to soften gradually on account of lagged effect of cost of funds increase, elevated loan losses and impact of regulatory action have led to profit growth being lower by approximately 5-6%,” Bajaj Finance said.The company’s capital adequacy ratio stood at 23.87%. The increase in the risk weights by the Reserve Bank of India (RBI) on consumer credit exposure from 100% to 125% had a 290 basis points impact on capital adequacy. One basis point is 0.01 percentage point.
The company raised ₹8,800 crore by allotting shares through a qualified institutional placement (QIP) in November.
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