(Reuters) -India’s Bajaj Finance posted a 22% increase in quarterly profit on Monday, boosted by strong loan growth, even as the proportion of non-performing assets edged higher.
The non-banking financial company reported a consolidated net profit of 48.76 billion rupees ($554.8 million) for the quarter ended September 30, up from 40 billion rupees a year earlier.
Indian lenders have seen a gradual pickup in credit demand during the July–September quarter after several quarters of slowdown. Analysts expect growth to stay firm in the second half of the fiscal year, supported by recent goods and services tax cuts.
The revival in broader credit demand helped boost Bajaj Finance’s assets under management 24% from a year earlier, while new loan bookings jumped 26% year-on-year.
Net interest income, the difference between interest earned and paid, rose 22% to 107.85 billion rupees.
Bajaj Finance said earlier that it disbursed a record 6.3 million loans between September 22 and October 26, up 29% in value from last year, boosted by festive demand and tax relief measures.
Along with the rapid loan growth, asset quality worsened: the lender’s gross non-performing asset ratio rose to 1.24% at the end of September from 1.03% three months earlier.
Loan losses and provisions increased 19% year-on-year to 22.69 billion rupees.
Bajaj Finance has been grappling with higher bad loans in the last few quarters in the two and three wheeler loans and loans to micro, small, and medium enterprises (MSME) segments.
“Credit cost remained elevated in captive 2 & 3-wheeler and MSME businesses,” Bajaj Finance said, adding that the firm has cut 25% of its unsecured MSME loan volumes.
($1 = 87.8950 Indian rupees)
(Reporting by Nishit Navin; Editing by Ronojoy Mazumdar)
