MUMBAI: A meeting of the Board of Directors of Bajaj Finance Limited (BFL) was held today to consider and approve the unaudited standalone and consolidated results for the quarter ended 30 June 2020.
The consolidated results of BFL include the results of its wholly owned subsidiaries viz. Bajaj Housing Finance Limited (BHFL) and Bajaj Financial Securities Limited (BFinsec).
Q1 FY21 was a pandemic quarter. During the quarter, the Company focused on employee safety, capital preservation, liquidity management, business scenario planning, operating expenses management, collections capacity augmentation, customer propositions, business transformation framework and lastly but most importantly calibrated restart of business as the country started to reopen.
The Company’s business operations in Q1 FY21 were considerably impacted due to COVID-19 pandemic and the consequent lockdowns which remained for most of Q1 FY21. It has resulted in significantly lower business acquisition and constraints on recovery of overdues from customers.
The Company restarted its urban B2B, rural B2B, auto finance, gold loans and loan against securities businesses from 1 O May 2020 with stringent loan to value (LTV) and underwriting norms and focus on existing customers. The Company restarted its home loans and credit card distribution businesses from June 2020.
The Company deferred restart of other businesses viz. loan against property, SME, urban B2C, rural B2C and commercial businesses to July 2020 due to extension of moratorium.
Consolidated moratorium book has reduced to f 21,705 crore (or 15.7% of AUM) from f 38,599 crore (or 27% of AUM) as of 30 April 2020 owing to reduction in bounce rate coupled with better collection efficiency.
During the quarter, the Company made an additional contingency provision for COVID-19 off 1,450 crore taking the overall contingency provision for COVID-19 to f 2,350 crore as of 30 June 2020. The contingency provision for COVID-19 is now at 10.8% of consolidated moratorium book. This contingency provision together with existing expected credit loss provision off 623 crore provides an overall provisioning coverage of 13.7% on the consolidated moratorium book.
Addltionally, as a matter of prudence, the Company has also reversed f 220 crore of interest income from the interest capitalised during moratorium period.
The Company continues to remain very well capitalised with CRAR of 26.40% as at 30 June 2020. It remains one of the best capitalised large NBFCs in India.
