A file photo

A file photo

Bajaj Finance July-Sept net up 66%, focus on asset quality

Bajaj Finance July-Sept net up 66%, focus on asset quality

New Delhi: Financial services provider Bajaj Finance expects its profit to climb 50% in 2011/12, lower than a two-thirds rise in the second quarter, as higher interest rates crimp demand for loans.

“Our focus is entirely on quality of portfolio rather than growth," chief executive officer Rajiv Jain told Reuters by telephone on Wednesday.

A file photo

“In the second half of the year, given the high interest environment, you will see small business and commercial slow further," Jain said, adding that the festive season would ensure higher consumer spending and thus a ‘strong´ third quarter but the fourth quarter remains ‘uncertain´.

Jain however said that the overall discretionary spending momentum in the economy has continued to remain strong.

Earlier in the day, it reported a 66% jump in July-Sept profit to 87.4 crore on higher income from operation and lower provisioning for bad loans. Total income rose 53% to 492crore.

Loan losses and provisions for the quarter fell 28% to 44.0 crore from a year ago and net non-performing asset for the quarter fell to 0.33% from 1.4% a year ago.

The non-banking finance company, which lends to consumer durables, two-wheelers, mortgages and construction equipment segments, expect its net NPA to remain between 0.35-0.5% by the year-end.

India’s central bank has raised rates a dozen times since March 2010 to tame a stubbornly high inflation and is expected to raise it one more time later this month.

Bajaj Finance, valued by the market at about $500 million, has lost 4% this year, while the benchmark BSE index has slmuped about 18%.

On Wednesday, shares in Bajaj Finance ended up 0.53% at 677.90 in a Mumbai market that was up 2%.

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