Net interest income (NII) surged 22.8% to ₹8,837.7 crore, compared to ₹7,196.3 crore in Q2 FY24, while net total income grew by 24% to ₹10,946 crore. Operating expenses improved, with the Opex to net total income ratio decreasing to 33.2% from 34.0% a year earlier.
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The consumer finance major’s gross and net non-performing assets (GNPA and NNPA) stood at 1.06% and 0.46%, respectively at the end of the second quarter, compared to 0.91% and 0.31% the previous year, maintaining one of the industry’s lowest NPA levels. Assets Under Management (AUM) grew by 29% year-on-year to ₹3,73,924 crore, with new business lines contributing 2%-3% to this growth.
Bajaj Finance also reported a 14% increase in new loans booked, totaling 9.69 million in Q2 FY25, up from 8.53 million the previous year. The company’s liquidity buffer was at ₹20,196 crore.
In Q2, the cost of funds (COF) increased slightly to 7.97%, up 3 basis points from Q1 FY25, but the company believes the COF has now peaked. Bajaj Finance’s deposit book grew 21% year-on-year, reaching ₹66,131 crore, with deposits contributing 20% of consolidated borrowings. Deposits saw a growth of ₹3,357 crore in Q2.
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Bajaj Finance continues to optimise its operating costs and rapidly implement generative AI capabilities to boost productivity. The employee count reached 59,352 as of 30 September 2024, with 4,007 employees added during the quarter, and an annualised attrition rate of 16.4%.
Gross loan losses and provisions stood at ₹1,934 crore in Q2 FY25. Despite elevated loan losses and provisions, stage 2 assets decreased by ₹357 crore, while stage 3 assets increased by ₹899 crore.
The net increase in stage 2 and 3 assets was ₹542 crore, spread across retail and SME segments. Gross loan loss to average AUF was 2.16%, consistent with Q1. The company anticipates loan loss to average AUF will decrease to 2% by Q4 FY25.
Net loan losses and provisions amounted to ₹1,909 crore, with the company utilising ₹25 crore of management overlay towards these losses. Net loan loss to average AUF stood at 2.13% in Q2. Bajaj Finance now estimates FY25 net loan loss to average AUF to be around 2.05%, slightly above the previously estimated corridor of 1.75%-1.85%, with improvements expected in the second half of the fiscal year.
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During the quarter, Bajaj Finance added 3.98 million new customers, with expectations to reach 15-16 million new customers in FY25. The customer franchise stood at 92.09 million as of 30 September 2024, with the company optimistic about crossing 100 million customers in FY25.
The results came after the close of the market hours. Shares of Bajaj Finance Ltd ended at ₹6,677.40, down by ₹ 107.10, or 1.58% on the BSE.
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