Bajaj Finance Ltd, one of the largest players in consumer finance segment, on Tuesday posted 19 per cent year-on-year fall in consolidated net profit at Rs 962 crore for the April to June quarter.
It had posted a net profit of Rs 1,195 crore in the corresponding quarter of last year.
At the same time, Non-Executive Chairman Rahul Bajaj, having been at the helm of the company since its inception in 1987 and the group for over five decades, as part of succession planning decided to demit the office as Chairman of the Board from July 31.
He will, however, continue to serve the company as a Non-Executive Non-Independent Director. "The board of directors at its meeting held today has approved the appointment of Sanjiv Bajaj, currently Vice Chairman of the company, as Non-Executive Chairman with effect from August 1 in place of Rahul Bajaj." Bajaj Finance said its business operations in Q1 FY21 were considerably impacted due to Covid-19 pandemic and the consequent lockdowns. This resulted in significantly lower business acquisition and constraints on recovery of overdues from customers.
However, consolidated assets under management (AUMs) grew by 7 per cent to Rs 1.38 lakh crore in Q1 FY21 from Rs 1.28 lakh crore in Q1 FY20.
Consolidated moratorium book reduced to Rs 21,705 crore (or 15.7 per cent of AUM) from Rs 38,599 crore (or 27 per cent of AUM) as of April 30 due to reduction in bounce rate coupled with better collection efficiency.
During the quarter, the Bajaj Finance made an additional contingency provision for COVID-19 of Rs 1,450 crore, taking the overall contingency provision to Rs 2,350 crore as of June 30. The contingency provision for COVID-19 is now at 10.8 per cent of consolidated moratorium book.
"This contingency provision together with existing expected credit loss provision of Rs 623 crore provides an overall provisioning coverage of 13.7 per cent on the consolidated moratorium book." Additionally, as a matter of prudence, the company also reversed Rs 220 crore of interest income from the interest capitalised during the moratorium period.
However, gross non-performing assets (NPAs) and net NPAs stood at 1.4 per cent and 0.5 per cent respectively against 1.6 per cent and 0.64 per cent last year.
Bajaj Finance said it continues to remain well capitalised with capital to risk assets ratio (CRAR) of 26.4 per cent. It remains one of the best capitalised large non-banking finance companies in India.
The company said its liquidity position remains strong with an overall liquidity surplus of nearly Rs 17,700 crore on a consolidated basis. The liquidity surplus as of July 20 was about Rs 20,590 crore.