Bajaj Finance Q4 hit by rural loan losses, RBI restrictions

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₹17,607 crore, comprising 5.3% of aggregate consolidated AUM as on 31 March, as against 6.7% in the same period last year. In fact, Bajaj Finance said that risk metrics across all businesses were stable except rural b2c. “Good quarter on AUM, customer acquisition, portfolio metrics, and operating efficiencies.

Dampeners for the quarters were elevated loan losses in rural b2c and continued impact of regulatory restrictions," said Jain. Total loan losses and provisions in the March quarter were at ₹1,310 crore, up 53% from the same period last year. For the current year (FY25), Bajaj is expecting to grow its AUM 26-28% compared to 34% in the previous financial year.

This growth, it said, will be supported by its newly launched secured businesses like loan against property (LAP), new car financing and tractor finance. It also expects a 30-40 basis points (bps) compression in net interest margins over the next two quarters. According to the lender, NIM has been moderating throughout FY24 due to increase in cost of funds and a gradual shift in AUM composition towards secured assets.

“It is a pivot that will happen gradually," said Jain. Bajaj Finance posted a consolidated net profit of ₹3,825 crore in Q4, up 21% year-on-year (y-o-y), beating analyst expectations. Bloomberg estimates had pegged its Q4 profit at ₹3,785 crore.

Its net interest income grew by 28% to ₹8,013 crore in Q4, as against ₹6,254 crore in Q4 of FY23. The lender faced a net interest margin (NIM) compression in Q4 over Q3 of 21 basis points (bps). Bajaj Finance’s gross NPA (non-performing assets) and net NPA stood at 0.85% and 0.37% as of 31 March, respectively, as against 0.94% and 0.34% as of 31 March 2023.