New Delhi, Jul 21 (PTI) Bajaj Finserv on Tuesday reported a 44 per cent rise in consolidated net profit to Rs 1,215 crore in the first quarter ended June of the current fiscal year, mainly on the back of good earnings from its insurance subsidiaries.

The Bajaj Group company's financial services arm had posted a net profit of Rs 845 crore during the corresponding June quarter of 2019-20.

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Consolidated total income rose 16 per cent to Rs 14,192 crore in the quarter under review from Rs 12,272 crore in the same quarter a year ago, Bajaj Finserv(BFS) said in a release.

The consolidated earnings of BFS include results from three subsidiary firms -- Bajaj Finance Ltd (BFL), Bajaj Allianz General Insurance Company Ltd (BAGIC) and Bajaj Allianz Life Insurance Company Ltd (BALIC).

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BFS said all the three businesses were impacted during the first quarter of 2020-21 as many large cities continued to be under the coronavirus-induced lockdown for the entire quarter and economic activity was muted.

For BFL, the lockdown resulted in significantly lower disbursements in the current quarter (June) as well as constraints on recovery of dues from customers due to the lockdown restrictions and moratoriums announced by RBI, BFS said.

However, BFL remains one of the most adequately capitalised amongst large non-banking financial companies (NBFCs) in India with a healthy liquidity position.

Additionally, BFL made a pre-tax provision of Rs 1,450 crore in the form of contingency provision during Q1FY21 on account of the impact of COVID-19. The same is over and above the provision considered of Rs 900 crore in FY20 and other usual and necessary provisions for NPAs, it said further.

"While BAGIC's gross written premium was lower due to decline in sales of vehicles, travel insurance and tenders for government health business, its underwriting result improved significantly. BALIC maintained its topline in terms of individual rated new business premium at the same level as the previous year as compared to industry's de-growth of 18 per cent," it said.

Individually, BFL reported a 19 per cent decline in net profit at Rs 962 crore as against Rs 1,195 crore in the year-ago period.

Excluding the contingency provision, which is of unusual nature, profit for BFS would have increased by 71 per cent, it said.

While BAGIC reported a jump of 88 per cent in net profit at Rs 395 crore as against Rs 210 crore in Q1FY20, BALIC's net profit more than doubled to Rs 130 crore from Rs 62 crore a year ago.

BFS said its two insurance subsidiaries have chosen to hold equity securities as fair value through profit and loss account.

"Therefore, the insurance companies had an unrealised mark-to-market (MTM) pre-tax gain of Rs 556 crore during the quarter, while in Q4 of FY20, there was a MTM loss of Rs 768 crore," it added.

BFS remains a debt free company and its surplus funds (excluding group investments) stood at Rs 1,060 crore as on June 30, 2020 (Rs 790 crore as on 30 June 2019), it said.

Shares of BFS on Tuesday closed 3.58 per cent lower at Rs 6,381.40 apiece on the BSE.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)