Bajaj Finance Weighs Adequacy Of Provisioning For Large Accounts

Bajaj Finance, on Monday, said it is assessing the adequacy of provisioning for identified large accounts and that it will consider enhancing provisions for these accounts. The non-banking finance company, in an exchange filing, also said it is considering one-time accelerated provisioning for Covid-19 to further strengthen its provisioning standards.

As per its third quarter (Q3 FY20) presentation, the company’s loan losses and provisions had jumped by 84 per cent year-on-year (y-o-y) to ₹831 crore. During the third quarter, the company made an accelerated provision of ₹85 crore in one of its loan against securities account.

“On the residual outstanding of this account, based on the progress in Q4 (fourth quarter), we will take a final call on provision,” the presentation said.

Bajaj Finance provides loans to segments such as consumer, small and medium enterprises (SMEs), commercial, and rural. It also has two subsidiaries – Bajaj Housing Finance Ltd and Bajaj Financial Securities Ltd.

In its latest regulatory filing, Bajaj Finance said its customer franchise as of March 31, 2020, stood at 4.26 crore, up 23 per cent y-o-y. During the quarter, the company acquired 19 lakh new customers.

Assets under management (AUM) grew 23 per cent yoy to stand at ₹147,600 crore as of March 31, 2020, when compared to ₹115,888 crore as of March 31, 2019.

Bajaj Finance said it continues to remain well capitalised with capital adequacy ratio (CRAR) of approximately 25 per cent as of March 31, 2020 (26.87 per cent as of 31 December 2019).

As per the filing, consolidated liquidity surplus stood at ₹ 15,800 crore as of March 31, 2020. The company’s liquidity position remains very strong, it added.

The company said its deposit book stood at ₹ 21,400 crore as of March 31, 2020, compared to ₹13,193 crore as of March 31, 2019. The mix of retail and corporate book stood at 72:28.