The SME sector continues to see the slow growth that was witnessed even after the note ban that was enforced last November, Sanjiv Bajaj, Managing Director of Bajaj Finserv .
Bajaj said that defaults on loans had gone up marginally before the third quarter and that Bajaj Finserv had tightened its credit policy in the first quarter itself, meaning that the bottom 20-25 percent of applicants did not get loans.
He said it would be important to see how SMEs adjust to demonetisation over the next two to three quarters, as the sector will have to turn more formal.
Bajaj said sales were muted and that life insurance earnings continues to remain weak. He added, however, that consumer spending should come back to speed by March.
In third quarter earnings released at the end on January, Bajaj Finserv said it had grown its consolidated net profit 41 percent year-on-year to Rs 614 crore, thanks to strong performance by its general insurance and NBFC subsidiaries.
On rumours of a buyout of the Allianz Group’s stakes in the insurance joint ventures, Bajaj said there was no change in the status quo and that the two “continue to be partners in building two high-quality businesses”. He said talk of a merger in the next financial year or later was merely speculative.
Bajaj Finserv holds 58 percent in Bajaj Finance and 74 percent each in Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance.
Q: Let me start with one question that I didn’t ask you last time where the market cannot stop guessing, what is between you and Allianz, are you going to buy out anytime soon the Allianz group?
A: Your guess is as good as mine. When my guess gets better, then a decision would be taken but there is no change from the last time that we have discussed. They continue to be partners, we continue to build two high quality businesses so there is no change right now.
Q: What will be the catalyst for this decision, will it be when you want money, will it be when Allianz will be tired of waiting, should we expect any change in ownership in FY18?
A: That is speculative and it is not something that I have a clear answer for it at this stage. The only thing that I can say is as of now they are partners, as of now we are building the businesses together. Whether these things change, whether they change in FY18 or later, this would be speculative and I don’t have information to share there but when I do get it, we would share it with everyone.
Source: MoneyControl
