Despite higher borrowing costs, the use of credit has increased in India in recent months due to increased economic activity, which has allowed lenders, including Bajaj Finance Ltd, to make solid returns. .
It also helps Shriram Finance, one of India’s largest retail non-banking finance companies (NBFC), which was formed in November by merging Shriram Capital with former public unit Shriram Transport Finance Shriram City Union Finance.
The combined entity’s profit jumped to 17.77 billion rupees ($217.1 million) in the quarter ended December 31, from 6.81 billion rupees a year earlier.
Interest income increased by 54% to 71.74 billion rupees during the October-December holiday season, when large purchases are considered profitable.
Net interest income, the difference between interest earned and interest paid, jumped 85.4%, while net interest margin on assets under management (AUM) increased to 8.52% compared to 8.12% in the previous year.
Gross bad debt as a percentage of total loans – a measure of asset quality – fell to 6.29% from 8.40% the previous year.
Assets under management by Shriram Finance increased to 1.77 trillion rupees at the end of December, from 1.69 trillion rupees at the end of September. ($1 = 81.8480 Indian rupees)
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