Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Bajaj Finance — Q3 FY22 Earnings Presentation
60 slides from Bajaj Finserv's earnings presentation, Jan 18, 2022
Slide 1: Q3 FY22 Investor Presentation
Q3 FY22 Investor Presentation 18 January 2022
Slide 2: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary Financial performance Customer franchise and Update on Q3 FY22 Q3 FY22 distribution reach credit quality 3 33 44 51 Section 02 Section 04 Section 06 Bajaj Finance Limited Asset liability Business segment wise overview ma
Slide 3: Section 01 Executive summary Q3 FY22
1.1 Quarter gone by Section 01 Executive summary Q3 FY22 1.2 Lead financial indicators 1.3 Business Transformation Update 3
Slide 4: Quarter gone by
Quarter gone by A very good quarter for the Company. Across the board improvement in all metrics. The Company is well prepared to navigate wave 3 given strong management overlay provisions and significantly improved stage 2 and 3 assets. Business transformation phase 1 is delivered and execution for
Slide 5: Lead financial indicators
Lead financial indicators 1. At the outset, YoY numbers are not comparable due to dislocation caused by the pandemic. 2. Highest ever Core AUM growth* of ~ ₹ 14,700 crore in a quarter. AUM as of 31 December 2021 was up 26% at ₹ 1,81,250 crore as against ₹ 1,43,550 crore as of 31 December 2020. AUM c
Slide 6: Lead financial indicators
Lead financial indicators 10. Deposits book grew by 28% YOY to ₹ 30,481 crore as of 31 December 2021. Its contribution to consolidated borrowings was 20%. Retail : Corporate mix stood at 69 : 31 in Q3 FY22. 11. Opex to NII for Q3 FY22 was 34.7%. The Company estimates Opex to NII metric to normalise
Slide 7: Lead financial indicators
Lead financial indicators 19. On portfolio credit quality, from a management assurance standpoint 7 portfolios were green and back to pre-Covid levels and 2 were yellow (2-wheeler and home loan). 20. Consolidated post tax profit grew by 85% to ₹ 2,125 crore in Q3 FY22 as compared to ₹ 1,146 crore in
Slide 8: Business Transformation update
Business Transformation update 8
Slide 9: Purpose of business transformation
As a Company, we believe that the purpose of any business transformation is a means to an end. It should result in stronger growth momentum, superior customer experience, better cross sell, lower risk and/or improved operating efficiencies. We are pursuing business transformation 9
Slide 10: Phase 1 of business transformation
phase 1 of business transformation project. Due to wave 2, it got delayed by 3 months. Phase 1 of the digital platform has now gone live with a staggered release methodology. The Company plans to transition all consumers to the new digital platform from February onwards. Next 2 slides cover 10
Slide 11: Phase 1 feature set
-in- Phase 1 feature set Payments UPI Wallet EMI Card Credit Card 6-in-1 Payment Checkout Bill Payment Network CD Network DPF Network REMI Network LSF Network LCF Network E-Com Network Coaching Network Marketplace & Health RX No cost EMI Marketplace Insurance Marketplace Investment Marketplace Demat
Slide 12: Phase 1 enablers
-in- Phase 1 enablers Offers and Stimulation Search Service Sales Engagement Utilities Promotions Core • Notification Engine • Dynamic Banners • Search • Raise a Request • 5 Mins Call Back • Social Share • Locate Us- Maps Components • Nudges • Offers • Content Streams • FAQ • Track and Resume • NPS/
Slide 13: Phase 2 of transformation journey
Previous 2 slides have covered the phase 1 of transformation journey. Phase 1 was focused on creating a strong, stable and scalable foundation. Phase 2 will focus on new to Bajaj customer journeys, introducing new features and functionalities, augmenting current feature sets and nuanced journeys for
Slide 14: Phase 2 feature set
-in- Phase 2 feature set 6-in-1 Payment 6-in-1 Check Out QR Based P2M Payments UPI Wallet EMI Card Credit Card Bill Payment POS terminals Checkout for Partners Transaction Network CD Network DPF Network REMI Network LSF Network LCF Network E-Com Network Coaching Network P2M Network QR Network Market
Slide 15: Phase 2 enablers
-in- Phase 2 enablers Offers and Stimulation Search Service Sales Engagement Utilities Promotions • Notification Engine • Dynamic Banners • Search • Raise a Request • 5 Mins Call Back • Social Share • Locate Us- Maps Core • QR • Nudges • Offers • Content Streams • FAQ • Track and Resume • NPS/Feedba
Slide 16: Phase 2 delivery timeline
The Company plans to deliver Phase 2 in 8 to 9 months subject to no major disruption as a result of current & new Covid waves. Unlike phase 1, phase 2 will get delivered in 3- 4 sprints. The first update on phase 2 will be provided in July quarter results. During this period, the Company remains com
Slide 17: Omnipresence strategy update
Omnipresence strategy update Geography 1. Total geographic footprint stood at 3,423 locations and 1,28,300+ distribution points. In Q3, the Company added 94 new locations to its distribution footprint. The Company is investing deeply in UP and Bihar to reduce concentration risk and create new growth
Slide 18: Lead Financial Indicators Subsidiary companies
Lead Financial Indicators Subsidiary companies Bajaj Housing Finance Limited (BHFL) 1. AUM increased by 39% to ₹ 49,203 crore as of 31 December 2021 from ₹ 35,492 crore as of 31 December 2020. 2. Net Interest Income for Q3 FY22 increased by 30% to ₹ 429 crore from ₹ 329 crore in Q3 FY21. 3. Opex to
Slide 19: Section 02 Bajaj Finance Limited overview
2.1 Bajaj group structure 2.2 What do we stand for 2.3 Our general long-term guidance on Financial metrics shareholder profile Section 02 2.4 Key strategic differentiators Bajaj Finance Limited overview 2.5 Our shareholder profile 2.6 14-years financial snapshot 2.7 Product suite 2.8 Executive summa
Slide 20: Bajaj group structure
Bajaj group structure Bajaj Holdings & Investment Limited (BHIL) (Listed) 39.16% 1 33.43% 2 Bajaj Finserv Limited Bajaj Auto Limited (Listed) (Listed) Financial services arm Auto business arm 74% 74% 52.65% 3 Bajaj Finance Limited Bajaj Allianz Life Bajaj Allianz General (Listed) Insurance Company L
Slide 21: What do we stand for
What do we stand for - a sustainable ROA of 4-4.5% and ROE of 19-21% in the long term 21
Slide 22: Our general long-term guidance on financial metrics
Our general long-term guidance on financial metrics AUM growth Profit growth GNPA in corridor of in corridor of in corridor of 25%-27% 23%-24% 1.4%-1.7% NNPA Return on assets Return on equity in corridor of in corridor of in corridor of 0.4%-0.7% 4%-4.5% 19%-21% 22
Slide 23: Key strategic differentiators
Key strategic differentiators Part of the Bajaj group one of the oldest & most A trusted brand with strong brand equity respected business houses Focus on mass affluent and above clients Total customer franchise of 55.36 MM Strong focus on cross selling assets, payments, Centre of Excellence for eac
Slide 24: Our shareholder profile
Our shareholder profile Top 20 investors & their holdings As on 31 As on 30 As on 31 S.No Name of Shareholder Dec 21 Sep 21 Dec 20 1 BAJAJ FINSERV LTD 52.65% 52.65% 52.74% 2 MAHARASHTRA SCOOTERS LIMITED 3.14% 3.14% 3.15% FII & FPI 3 GOVERNMENT OF SINGAPORE 3.13% 3.31% 4.28% 22.85% 4 NEW HORIZON OPPO
Slide 25: 14-years financial snapshot
14-years financial snapshot ₹ in crore FY18@ FY19 @ FY20 @ FY21 @ CAGR Financials snapshot @ FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 (Consol.) (Consol.) (Consol.) (Consol.) (14 yrs) Assets under 2,478 2,539 4,032 7,573 13,107 17,517 24,061 32,410 44,229 60,196 82,422 1,15,888 1,47,153 152,
Slide 26: Product suite
Product suite BAJAJ FINANCE LIMITED Partnerships & Consumer SME Commercial Rural Deposits Payments Services 1. Consumer Durable Loans 1. Unsecured Working 1. Loan against securities 1. Consumer Durable 1. Retail Term 1. PPI 1. Life Insurance Capital Loans (E) Loans Deposits 2. UPI Distribution 2. Di
Slide 27: Executive summary Consolidated
Executive summary Consolidated Overview • 34-year-old non-bank with a demonstrated track record of profitable growth • Diversified financial services company focused on Consumer, Rural, SME, Commercial, Mortgages and Payments • Focused on mass affluent client with a strategy to cross sell • Strong f
Slide 28: Executive summary Bajaj Finance Limited
Executive summary Bajaj Finance Limited Overview • Focused on Consumer, Rural, SME, Commercial and Payments businesses • Strategic business unit organization design supported by horizontal common utility functions to drive domain expertise, scalability and operating leverage • Focused on cross sell,
Slide 29: Executive summary Bajaj Finance Limited
Executive summary Bajaj Finance Limited SME Business • Offers unsecured working capital loans to SME and self-employed professionals • Secured offerings include enterprise loans against property • Focused on accelerating used car financing business (average ticket size of ~7 lakhs) • Focused on affl
Slide 30: Executive summary Bajaj Housing Finance Limited
Executive summary Bajaj Housing Finance Limited Bajaj Housing • A 100% subsidiary of Bajaj Finance Limited, registered with National Housing Bank as a Housing Finance Company Finance Limited • Independent organization design having all dedicated functions and units to drive domain expertise, scalabi
Slide 31: Executive summary Bajaj Housing Finance Limited
Executive summary Bajaj Housing Finance Limited Lease Rental • Offers loan against lease rentals to high-net-worth individuals and developers on commercial property leased mainly to Discounting corporate tenants • Offers construction finance for commercial properties to existing LRD customers • All
Slide 32: Executive summary Bajaj Financial Securities Ltd
Executive summary Bajaj Financial Securities Ltd Bajaj Financial • A 100% subsidiary of Bajaj Finance Limited, registered with Securities and Exchange Board of India (SEBI) Securities Limited • Member of Stock Exchanges (NSE and BSE), Depositaries (NSDL & CDSL) and AMFI for distribution of Mutual Fu
Slide 33: Section 03 Financial performance Q3 FY22
Financial statement summary 3.1 Consolidated Section 03 Financial statement summary Financial performance 3.2 Bajaj Finance Limited 3.3 Financial statement summary Bajaj Housing Finance Limited 33
Slide 34: Financial statement summary Consolidated
Financial statement summary Consolidated ₹ in Crore Financials snapshot Q3 FY22 Q3 FY21 Y-o-Y 9M FY22 9M FY21 Y-o-Y FY21 Assets under management 1,81,250 1,43,550 26% 1,81,250 1,43,550 26% 1,52,947 Assets under finance 1,74,775 1,37,920 27% 1,74,775 1,37,920 27% 1,46,687 Interest income 7,262 5,723
Slide 35: Financial statement summary Bajaj Finance Limited
Financial statement summary Bajaj Finance Limited ₹ in Crore Financials snapshot Q3 FY22 Q3 FY21 Y-o-Y 9M FY22 9M FY21 Y-o-Y FY21 Assets under management 1,32,913 1,09,598 21% 1,32,913 1,09,598 21% 1,15,418 Assets under finance 1,30,732 1,07,056 22% 1,30,732 1,07,056 22% 1,13,090 Interest income 6,3
Slide 36: Financial statement summary Bajaj Housing Finance Ltd.
Financial statement summary Bajaj Housing Finance Ltd. ₹ in Crore Financials snapshot Q3 FY22 Q3 FY21 Y-o-Y 9M FY22 9M FY21 Y-o-Y FY21 Assets under management 49,203 35,492 39% 49,203 35,492 39% 38,871 Assets under finance 43,479 30,772 41% 43,479 30,772 41% 33,419 Interest income 907 747 21% 2,520
Slide 37: Section 04 Asset liability management
4.1 Conservative leverage standards Bajaj Finance Limited 4.2 Resilient business model Consolidated Section 04 4.3 Behaviouralized ALM as of 31 December Bajaj Finance Limited Asset liability management 4.4 Behaviouralized ALM as of 31 December Bajaj Housing Finance Limited 4.5 Disciplined ALM Manage
Slide 38: Conservative leverage standards
Conservative leverage standards 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 28.3% 28.6% 27.7% 26.96% 6.8 6.6 24.7% 25.0% 6.2 6.3 6.3 25.4% 24.9% 22.0% 25.1% 24.44% 20.7% 21.3% 20.3% 5.4 5.3 19.1% 19.5% 5.1 18.0% 4.7 4.8 4.8* 19.7% 4.6 18.7% 16.2% 16.1% 16.3% 14.2% 14.6% 5.7% 5.0% 4.4% 3.3% 3.8% 3.4%
Slide 39: Resilient business model Consolidated
Resilient business model Consolidated 46.0% 45.0% 44.6% 48.8% 43.1% 47.5% 41.4% 41.8% 46.5% 38.1% 42.3% 35.3% 38.4% 33.5% 34.7% 36.0% 35.4% 30.7% 33.3% 27.8% 29.9% 28.4% 26.4% 27.2% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 7.84% 7.11% 6.77% 6.72% 4.1% 3.6% 3.3% 3.5% 3.7% 3.9% 4.1% 4.1% 3.1% 2
Slide 40: Behaviouralized ALM as of 31 December 2021 BFL
Behaviouralized ALM as of 31 December 2021 BFL ₹ in Crore Particulars 1-7 D 8-14 D 15-30 D >1-2 M >2-3 M >3-6 M >6 M-1 Y >1-3 Y >3-5 Y >5 Y Total Cash & Investments 8,567 200 481 997 796 1,980 3 2,240 807 5,845 21,917 Advances 5,103 1,983 3,125 6,990 6,213 14,980 23,285 43,390 17,763 11,381 1,34,212
Slide 41: Behaviouralized ALM as of 31 December 2021 BHFL
Behaviouralized ALM as of 31 December 2021 BHFL ₹ in Crore Particulars 1-7 D 8-14 D 15-30 D >1-2 M >2-3 M >3-6 M >6 M-1 Y >1-3 Y >3-5 Y >5-7 Y >7-10 Y >10 Y Total Cash & Investments 492 100 - 1,000 349 149 - - - - - - 2,090 Advances 307 280 607 910 899 2,490 4,522 12,617 7,563 4,956 4,395 3,931 43,4
Slide 42: Disciplined ALM Management
Disciplined ALM Management Cumulative gap upto 1 month Cumulative gap upto 12 months 220% 216% 192% 178% 141% 160% 119% 120% 61% 96% 51% 80% 48% 76% 36% 71% 64% 57% 54% 50% 44% 38% 16% 4% -15% ALM mismatch for upto 1 Month and upto 1 year. From FY20 onwards, RBI has prescribed -20% ALM mismatch for
Slide 43: Consolidated Liability mix over last 10 years
Consolidated Liability mix over last 10 years 5% 5% 3% 4% 4% 4% 4% 8% 10% 5% 13% 4% 3% 12% 13% 7% 6% 7% 7% 4% 3% 7% 3% 3% 3% 2% 3% 6% 4% 33% 38% 35% 25% 36% 35% 36% 37% 38% 36% 40% 45% 36% 31% 30% 29% 29% 58% 54% 48% 34% 53% 35% 25% 20% 21% 20% 20% 17% 12% 13% 0% 1% 6% 8% 4% Mar'13 Mar'14 Mar'15 Mar
Slide 44: Section 05 Customer franchise and distribution reach
5.1 Customer franchise Section 05 Customer franchise and 5.2 Geographic presence distribution reach 5.3 Strong distribution reach 44
Slide 45: Customer franchise
Customer franchise Q3 FY21 Q3 FY22 Q2 FY22 46.31 MM Total Franchise 55.36 MM 52.80 MM 36.60 MM Credit segment filter 43.45 MM 41.68 MM 35.32 MM Overall Cross sell franchise 41.87 MM 40.12 MM Non delinquent 30.80 MM customers 37.23 MM 35.31 MM Cross sell franchise 25.25 MM 31.26 MM 29.37 MM (54.5%)*
Slide 46: Geographic presence
Geographic presence 30 Sept 31 Dec 31 Mar 30 Jun 30 Sept 31 Dec Geographic Presence 2020 2020 2021 2021 2021 2021 Urban lending branches 1,134 1,210 1,298 1,368 1,368 1,368 Rural lending branches 1,507 1,604 1,690 1,745 1,961 2,055 Total Bajaj Finance presence 2,641 2,814 2,988 3,113 3,329 3,423 Map
Slide 47: Strong distribution reach
Strong distribution reach Active distribution 31-Dec-19 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Dec-21 Consumer durable stores Urban 23,300+ 24,700+ 26,400+ 26,900+ 28,000 29,500+ Consumer durable stores Rural 17,900+ 22,500+ 24,000+ 24,000+ 25,600+ 27,900+ Digital product stores 25,300+ 25,400+
Slide 48: Section 06 Business segment wise AUM
Section 06 6.1 Business segment wise AUM as of 31 December - Consolidated Business segment wise AUM 6.2 Business segment wise AUM as of 31 December Mortgages 48
Slide 49: Business segment wise AUM - Consolidated
Business segment wise AUM - Consolidated ₹ in Crore Consolidated BHFL as of Consolidated Composition as Composition as BFL as of 31 Growth Assets Under Management as of 31 31 December as of 31 of 31 December of 31 December December 2021 YoY December 2020 2021 December 2021 2020 2021 Auto Finance Bus
Slide 50: Business segment wise AUM - Mortgages
Business segment wise AUM - Mortgages ₹ in crore Bajaj Housing Finance Limited Mortgage All Composition as of Assets Under Management 31 Dec 2020 31 Dec 2021 Growth 31 Dec 2020 31 Dec 2021 Growth 31 Dec 2021 Home Loans 22,217 30,409 37% 26,120 33,067 27% 57% Loan against property 4,417 5,927 34% 11,
Slide 51: Section 07 Update on credit quality
7.1 Provisioning Coverage - Consolidated 7.2 ECL summary Consolidated Section 07 ECL summary Bajaj Housing Finance Limited Update on credit quality 7.3 7.4 Portfolio stagewise provisioning 7.5 Portfolio credit quality - Consolidated 51
Slide 52: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated ₹ in Crore AUM PCR GNPA % NNPA % Particulars GNPA NNPA 31 Dec 2021 (%) 30 Jun 21 30 Sept 21 31 Dec 21 30 Jun 21 30 Sept 21 31 Dec 21 Auto Finance Business 10,620 1,304 651 50% 19.15% 16.00% 11.04% 12.18% 9.25% 5.84% Sales Finance Business 14,920 45 9 81% 1.05% 0.
Slide 53: ECL summary Consolidated
ECL summary Consolidated Asset categorization Stage 1 & 2 (represents standard assets) 97.14% 98.21% 97.04% 97.55% 98.27% Stage 3 (classified as NPA) 0.55% 1.79% 2.96% 2.45% 1.73% Stage 3 (not classified as NPA) 2.32% - - - - Summary of stage wise assets and provision for impairment allowance Assets
Slide 54: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited Asset categorization Stage 1 & 2 (represents standard assets) 99.65% 99.65% 99.72% 99.65% 99.65% Stage 3 (classified as NPA) 0.06% 0.35% 0.28% 0.35% 0.35% Stage 3 (not classified as NPA) 0.29% Summary of stage wise assets and provision for impairment allowan
Slide 55: Stagewise ECL provisioning as of 31 December 2021
Stagewise ECL provisioning as of 31 December 2021 ₹ in crore Gross Assets Receivable ECL Provision PCR % Stage 2 Stage 2 Stage 2 Stage 1 Stage 3 Stage 1 Stage 3 Stage 1 Stage 3 OTR* Normal OTR* Normal OTR* Normal Auto Finance Business 8,925 18 1,558 1,303 143 1 389 651 1.6% 6.4% 25.0% 50.0% Sales Fi
Slide 56: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Consumer Durable & Lifestyle Two & three-wheeler Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket Stage 1 98.47% 98.55% 98.65% 92.10% 98.92% 99.52% 99.05% 99.58% 99.72% 1 87.63% 85.81%
Slide 57: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Business & professional loans Rural Lending B2B Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1 98.42% 98.35% 98.27% 93.43% 97.19% 98.50% 97.30% 98.51% 98.73% 1 98.87% 99.21% 99.33% 92.8
Slide 58: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Home loans Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket 1 99.61% 99.63% 99.60% 98.31% 98.67% 99.56% 98.31% 99.05% 99.07% 2 0.13% 0.15% 0.11% 1.40% ] 1.03% 0.24% 1.36% 0.69% 0.62% 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% -0.2% S
Slide 59: Disclaimer
Disclaimer This presentation has been prepared by and is the sole responsibility of Bajaj Finance Limited (together with its subsidiaries, referred to as the Company or . By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute
Slide 60: Thank You
BAJAJ FINANCE LIMITED Q3 FY22 Investor Presentation Thank You