Elevated credit costs in unsecured portfolios
Credit cost guidance of 185-195 bps remains above pre-COVID levels, with urban personal loan portfolio still maturing.
BAJFINANCE / Q4-FY25 / risks
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Bajaj Finance · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
high
NIM compression from fee moderation and delayed rate cuts
Management expects stable NIMs, but fee income growth is moderated to 13-15% and cost of fund benefits may be slower than anticipated.
Surplus capital weighing on ROE
Excess capital from BHFL listing and QIP is pressuring ROE; long-term ROE guidance reduced to 19-21% from 21-23%.
Two-wheeler/three-wheeler captive book wind-down risk
The winding-down captive portfolio (INR 10,000 crore) contributes disproportionately to credit costs; any delay in wind-down could impact asset quality.