India's Bajaj Finance misses Q2 profit view on higher bad loan provisions (updated)

Bajaj Housing Finance

22/10/2024 13:23

(Adds details throughout)
       BENGALURU, Oct 22 (Reuters) - India's Bajaj Finance
 BJFN.NS  reported a smaller-than-expected second-quarter profit
on Tuesday as it set aside more funds for potential bad loans.
    The company reported a consolidated profit after tax of
40.14 billion rupees ($477.6 million) in the three months to
Sept. 30. Analysts, on average, had expected 43.43 billion
rupees, as per estimates compiled by LSEG.
    Consolidated numbers include the non-banking financial
company's (NBFC) subsidiaries, Bajaj Housing Finance  BAJO.NS 
and Bajaj Financial Securities.
    While demand for consumer credit - including credit card
spends - has remained strong over the last few quarters, the
quality of lenders' unsecured loans is showing signs of stress
due to continuing pressure on cash flows in certain segments,
India Ratings said earlier this month.
    Bajaj Finance's loan losses and provisions grew 77% on-year
to 19.09 billion rupees.
    Its gross non-performing asset ratio - the ratio of bad
loans to total lending - deteriorated to 1.06% at the end of
September, from 0.91% a year earlier.
    The NBFC has been grappling with elevated losses in the last
few quarters, especially in the personal loan segment in rural
regions. It reported lower-than-expected profit in the first
quarter as well, hurt by higher funds set aside to cover
potential bad loans. 
    Its interest income rose nearly 28% to 149.87 billion
rupees, driven by a 29% year-on-year rise in its assets under
management.
    Net interest income, the difference between interest earned
and paid on borrowings, grew 23% to 88.38 billion rupees.
    Shares of the company ended 1.5% lower ahead of the results.
       
($1 = 84.0450 Indian rupees)

 (Reporting by Nishit Navin; Editing by Janane Venkatraman)
 ((Nishit.Navin@thomsonreuters.com;))