Bajaj Finserv: Pandemic impacts biz health

Shares of Bajaj Finserv pared early gains to trade lower at Rs 5,902 on NSE following the disappointing performance for the fiscal second quarter to September 30.
On Wednesday, after market hours, Bajaj Finserv reported an 18.06% decline in consolidated net profit at Rs 986.29 crore for the quarter ended September. It had reported a net profit of Rs 1,203.72 crore in the year ago.
The holding company, which runs various financial services businesses under the Bajaj group, reported 5.82% rise in total revenue from operations came in at Rs 15,049.60 crore, from Rs 14,221.9 crore a year ago.

The pandemic and consequent lockdown imposed by the governmental authorities has considerably impacted the group’s business operations for the half year ended September 30, in respect to subsidiaries engaged in the business of lending — Bajaj Finance, together with its subsidiary, Bajaj Housing Finance.
Apart from other adverse effects, the pandemic has also resulted in a significantly lower business acquisition and put constraints on recovery of overdues from customers of these subsidiaries.
The group offered moratorium to its customers based on requests as well as on a suo moto basis from March 1 to August 31 in accordance with the guidelines from the Reserve Bank of India.

During the quarter, the company made an expected credit loss (ECL) provision on standard (stage 1 and 2) assets of Rs 1,370 crore, in respect of these subsidiaries, taking the overall EGL provision on standard assets to Rs 5,099 crore as on September 30.
The company participates in the financing business through its 52.74% holding in Bajaj Finance and in the protection business through its 74% holding in two unlisted subsidiaries, Bajaj Allianz General Insurance Company (BAGIC) and Bajaj Allianz Life Insurance Company (BALIC).

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