Tag: Bajaj FinServ

Bajaj Finserv will enter asset management business: Sanjiv Bajaj

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Bajaj Finserv reported a 31.5% year-on-year drop in consolidated profit after tax for Q1FY22 to Rs 833 crore while total income was down 1.7% YoY to Rs 13,949 crore.

Bajaj Finserv will enter the asset management business, Sanjiv Bajaj- chairman and managing director, Bajaj Finserv, said on Wednesday at the company’s annual general meeting. The company has applied for a licence to start an asset management company and is awaiting approval from the Securities and Exchange Board of India. Through this, they would first launch mutual funds and later, portfolio management services business, Bajaj said. The business would leverage the digital platform to provide low-cost, but high-value services, he said.

The MD is looking forward to be a market player offering all financial services, and deliver them seamlessly through an app-based platform. The company at present has three main businesses — finance and two insurance ventures. The company added housing finance business and also entered retail stock broking services with demat, broking and margin trade financing. It has forayed into healthtech with Bajaj Finserv Health that combines technology, healthcare and financial services for corporate and individual customers.

Bajaj said the two insurance joint ventures with Allianz, the Bajaj Allianz Life and Bajaj Allianz General Insurance, were completing 20 years this year and both had built solid businesses with combined gross premium of Rs 24,000 crore and assets under management of around Rs 1,00,000 crore as on March 31, 2021. The partners have no plans of going public and listing these insurance companies, Bajaj said.

Announcing the Q1FY22 results, Bajaj said during Q1FY22 the performance of Bajaj Finance was muted because of lockdowns, but the company had made higher provisions to stay solid as a company. The current quarter would be better than the last. The general insurance business saw significant increase in claims because of Covid-19 while the life insurance business grew 45% in the first quarter and started the year very strong, Bajaj said.

Bajaj Finserv reported a 31.5% year-on-year drop in consolidated profit after tax for Q1FY22 to Rs 833 crore while total income was down 1.7% YoY to Rs 13,949 crore. The drop in PAT was largely attributed to mark-to-market changes. The consolidated results of Bajaj Finserv included the results of its wholly owned subsidiaries Bajaj Finance, Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance Company. Bajaj Finance profits were at Rs 1,002 crore while the general insurance PAT was at Rs 362 crore and life insurance shareholders’ PAT was Rs 84 crore during Q1FY22.

Loan losses and provisions for Bajaj Finance in Q1FY22, including expected credit loss, was Rs 1,750 crore as against Rs 1,686 crore in Q1FY21. The Covid-19 claims in the general insurance business had gone up to Rs 238 crore during the quarter compared to Rs 14 crore in Q1FY21. The life insurance business, too, saw Covid-19 claims of Rs 288 crore during the quarter compared to Rs 1 crore in Q1FY21.

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Bajaj Finserv Q1 net profit down 31.5%

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Bajaj Finserv reported a 31.5 per cent drop in its consolidated net profit to ₹832.77 crore for the quarter-ended June 30, 2021 as against ₹1,215.15 crore in the same period a year ago.

Its consolidated total income declined by 1.7 per cent to ₹13,949 crore in the first quarter of the fiscal as against ₹14,192 crore a year ago.

“After a brief recovery in the fourth quarter of 2020-21, economic conditions worsened in the first quarter of 2021-22 as the second wave of Covid spread across the country accompanied by localised lockdowns in many States. Sales of consumer durables and motor vehicles were affected in many States and, consequently, risk levels remained elevated in the quarter,” Bajaj Finserv said in a statement on Wednesday.

Insurance business

The life insurance business, in particular, recorded strong growth in the first quarter this fiscal, well above the industry growth, it further said.

Bajaj Allianz Life Insurance reported a 35.4 per cent drop in the shareholders’ net profit to ₹84 crore in the quarter-ended June 30, 2021 as against ₹130 crore a year ago. The decline in profit was mainly due to Covid-19 claims.

Gross written premium increased by 48 per cent to ₹2,516 crore in the first quarter this fiscal versus ₹1,700 crore in the same period last fiscal.

It reported a solvency ratio of 648 per cent as on June 30, 2021.

Bajaj Allianz General Insurance saw its net profit fall by 8.4 per cent to ₹362 crore in Q1FY22 as against ₹395 crore in the corresponding period of last fiscal.

Gross written premium for the first quarter increased by nine per cent to ₹2,494 crore versus ₹2,289 crore in the first quarter of 2020-21.

The insurer did not write any crop insurance business during the quarter. Its combined ratio stood at 103.4 per cent as on June 30, 2021.

Bajaj Finance reported a four per cent year on year growth in its consolidated net profit to Rs 1,002 crore in the first quarter this fiscal.

In a separate stock exchange filing, Bajaj Finserv said its board of directors has approved an investment of Rs 342 crore in its wholly owned subsidiary Bajaj Finserv Direct, which is into distribution of financial products through digital marketplace.

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RBL, Yes Bank, Bajaj Finserv most impacted by RBI curbs on Mastercard, BFSI News, ET BFSI

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New Delhi, After the Reserve Bank of India (RBI) restricted Mastercard from on-boarding new customers, among the credit card issuers, including co-brand partners, RBL Bank, Yes Bank and Bajaj Finserv are the most impacted as their entire card schemes are allied with Mastercard.

Japanese brokerage Nomura said in a note that these three entities are the most impacted by the RBI move.

HDFC Bank has 60 per cent of its card schemes tied to Mastercard, Amex and Diners, while for Axis Bank and ICICI Bank, this is about 35-36 per cent.

“That said, we don’t know the individual card schemes’ contribution to the overall profitability of the issuers to assess the potential impact,” it added.

HDFC Bank is already restricted from issuing new cards, and hence is not incrementally impacted. On the other hand, Kotak’s card portfolio is entirely allied to Visa and hence it won’t face any issues.

The managements of both Axis Bank and ICICI Bank have in the recent past talked about their cobranded cards with Flipkart and Amazon, respectively, to be the fastest-growing card schemes. These card schemes are 14 per cent and 15 per cent of outstanding cards for Axis and ICICI, respectively.

While the Amazon ICICI card is allied to Visa, the Flipkart Axis card is allied to Mastercard, and hence is a potential medium-term risk, should the current status-quo continue, Nomura said.

The RBI on Wednesday restricted Mastercard Asia/Pacific Pte Ltd from onboarding new customers across all its card products (debit, credit and prepaid) from July 22, 2021.

The RBI had earlier put similar restrictions on both American Express Bank (Amex) and Diners Club International (Discover Financial Services).

“This leaves only Visa Inc and homegrown NPCI’s RuPay as payment providers under no restrictions currently. We don’t know if Visa has fulfilled all the requirements of data localisation as envisaged in the Storage of Payment System Data circular of the RBI,” Nomura said.

“In the near term, we don’t foresee any material impact on card issuers (especially credit card issuers), but there could be a medium-term impact if this situation persists,” it added.



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Bajaj Finserv Q4 consolidated net profit surges to ₹979 crore

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Bajaj Finserv has reported a consolidated net profit of ₹979.06 crore for the quarter ended March 31, compared to ₹194.43 crore in the same period in 2019-20.

“As on March 31, 2021, BSE Sensex has rebounded by over 68 per cent from March 31, 2020 levels, resulting in higher than normal mark-to-market gain on investments of insurance subsidiaries during 2020-21. This has resulted in an increase in consolidated profit after tax of ₹892 crore for 2020-21 compared to decrease of ₹451 crore in the fourth quarter and 2019-20,” Bajaj Finserv said in a statement on Wednesday, noting that the consolidated profit figures for the current quarter and year ended may not be directly comparable with those of the corresponding previous periods.

Further, it also holds management overlay off ₹840 crore in provisions.

For 2020-21, Bajaj Finserv’s consolidated net profit soared 32.7 per cent to ₹4,470.46 crore, against ₹3,369.1 crore in 2019-20.

For the quarter ended March 31, 2021, its consolidated income rose 15.7 per cent to ₹15,387 crore from ₹13,294 crore a year ago.

In 2020-21, it made loan loss provisions including expected losses of ₹5,969 crore as compared to ₹3,929 crore, Bajaj Finserv said.

Its subsidiary, Bajaj Allianz General Insurance reported a 10.2 per cent decline in its net profit to ₹273 crore in the fourth quarter of 2020-21 from ₹304 crore a year ago.

In the case of Bajaj Allianz Life Insurance, shareholders’ profit after tax in the fourth quarter last fiscal rose to ₹234 crore from Rs 38 crore a year ago, largely due to higher capital gains.

A dividend of ₹3 per share of face value of ₹5 each on equity shares of the company has been recommended by the board of directors today for 2020-21.

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Benchmark indices rebound after 2 days of consecutive losses; Financials outperform, BFSI News, ET BFSI

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The market opened on a positive note following the positive global markets on Friday. US GDP data and a decline in the unemployment claims boosted market sentiments. After falling for two consecutive days, Sensex and Nifty moved higher on Friday with Sensex ending above 49,000 while Nifty 50 zoomed to cross 14,500 today.

The Nifty Bank Index ended higher at 33,318 adding 0.94%. Amongst the top gainers were- HDFC Bank at Rs 1491 adding 1.91% followed by PNB at Rs 36 (1.41%), ICICI Bank at Rs 578 (1.22%), IDFC First Bank at Rs 57 (0.87%), SBI at Rs 357 (0.56%). Axis Bank at Rs 698 (0.52%). while all major indices ended on a positive note, Induslnd Bank and Bandhan bank ended red.

Nifty Financial Services ended higher at 15,717 adding over 1.57%. Amongst the biggest gainers were Bajaj Finserv at Rs 9,467 adding over 4.53% followed by Chola Invest. at Rs 554 (3.19%) HDFC at Rs 2,532 (2.51%), Bajaj Finance at Rs 5,183 (1.19%), Indiabulls Hsg at Rs 197 (1.20%).

Other key takeaways

SEBI’s new rules on startups, delisting, ESG and more
The SEBI has approved a raft of measures including more transparent and efficient delisting of shares, reporting of sustainability issues by companies and provisions to make it easier for startups to go public.

In its board meeting on March 25, the market regulator also mandated public disclosure of analyst calls, quick reporting of earnings, and expanded the requirement of setting up a Risk Management Committee to the top 1,000 listed companies by market capitalisation from the existing to 500 listed entities

Suryoday Small Finance Bank debuts at 4% discount to issue price
Suryoday Small Finance Bank share price started off the first day of trading at a 4.2 percent discount at Rs 292 on March 26 on the National Stock Exchange, amid weak market conditions and muted subscription to IPO.

The Rs 582.34 crore public issue was subscribed 2.37 times during March 17-19, the lowest subscription amongst IPOs closed in 2021. The stock opened at Rs 293 on the BSE, down by 3.93 percent compared to issue price of Rs 305.

Market on Thursday
It was the second successive day of losses for the Indian market on March 25 amid unsupportive global cues and selling across sectors on the F&O expiry day. At close, the Sensex was down 1.51%, at 48,440.12 and the Nifty was down 1.54%, at 14,324.90. Nifty PSU Bank, FMCG, auto, infra, IT and energy indices declined 2-3 percent. Broader markets mirrored the benchmarks, as BSE midcap and smallcap indices fell 1.8-2.2%.

Stocks rebound in late-day rally on Wall Street
US stocks rose in a late-day rally on Thursday as investors bought stocks likely to do well in the recovery and picked up beaten-down Apple and Tesla shares in anticipation that the US economy grows at its fastest pace in decades this year.

The Dow Jones Industrial Average rose 199.42 points, or 0.62%, to 32,619.48. The S&P 500 gained 20.38 points, or 0.52%, to 3,909.52 and the Nasdaq Composite added 15.79 points, or 0.12%, to 12,977.68.



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