Bajaj Finance to continue Covid provisioning, strengthen its balance sheet

Bajaj Finance will continue to provisioning for the coronavirus pandemic in Q2 FY21 to strengthen its balance sheet, the company said on Tuesday.

The lender, in Q1FY21, took an additional contingency provision of Rs 1,450 crore for the pandemic, taking the total amount to Rs 2,350 crore as of June 30.

The company's capital adequacy ratio at the end of Q2FY21 stood at 26.5 per cent, which is almost the same as in Q1FY21. In an exchange filing, the company said it continues to remain well capitalized with capital adequacy ratio (CRAR) of approximately 26.5 per cent as of 30 September 2020 while maintaining highest ever liquidity buffer.

In its quarterly update, the lender said, it has added 1.2 million customers to its fold in Q2FY21, thereby taking the customer franchise to 44.1 million at the end of September 2020, compared to 38.7 million customers as of September 2019, up 14 per cent. In Q1 FY21, the company had acquired 0.53 million customers, and at the end of June 2020, the customer franchise stood at 42.95 million.

It saw a 44 per cent drop in new loans booked in Q2FY21 at 3.6 million, compared to 6.5 million in Q2FY20.

The assets under management (AUM) of the lender witnessed a 1.3 per cent growth in Q2FY21 at Rs 1.37 trillion, compared to Rs 1.35 trillion in Q2FY20. AUM at the end of Q1FY21 was to the tune of Rs 1.38 trillion, hence the company’s AUM witnessed a drop of 0.5 per cent sequentially.

Its consolidated liquidity surplus stood at approximately Rs 22,300 crore at the end of Q2FY21.

Furthermore, deposit book of the lender grew 22.5 per cent to Rs 21,600 crore in Q2FY21, compared to Rs 17, 633 crore in Q2FY20. The deposit book at the end of Q1FY21 stood at 20,061 crore.

Shares of the lender closed almost 3 per cent up at Rs 3,474.40 on the BSE. 

Housing Development Finance Corporation (HDFC), the country’s largest mortgage lender, earlier said September 2020 has seen the strongest recovery since the outbreak of the pandemic and the levels have exceeded the levels in the corresponding month of the previous year.