Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q4 FY2021 Earnings Presentation
54 slides from Bajaj Finance's earnings presentation, Apr 27, 2021
Slide 1: Q4 FY21 Investor Presentation
BAJAJ FINSERV BAJA) FINANCE LIMITED Q4 FY21 Investor Presentation 27 April 2021
Slide 2: Presentation Path
Presentation Path BAJA) FINANCE LIMITED = Section 01 dill section 03 AY Section 05 =| section 07 Executive summary - Financial performance —_| Customer franchise and | Update on 04 FY21 =04 FY21 distribution reach credit quality 9 27 38 50 ee eee ee eee8 Section 02 Section 04 a) Section 06 Bajaj Fin
Slide 3: Executive summary - Q4 FY21
BAJA) FINANCE LIMITED i a 6 Quarter gone by a C2] Lead financial indicators Preliminary assessment of pre second wave —— eo Executive summary - Q4 FY21 =) Section 01 Executive summary — Q4 FY21
Slide 4: Quarter gone by
Quarter gone by BAJAJ FINANCE LIMITED USD 1= 74 INR A good quarter for the Company with most lead financial indicators normalizing to pre-COVID levels. Business transformation plan of the Company is on track. We expect to launch 3-in-1 financial services in a phased manner by August and September. A
Slide 5: Lead financial indicators
Lead financial indicators BAJA) FINANCE LIMITED 1. USD 1= 74 INR AUM as of 31 March 2021 was at $20,669 MM as against $19,886 as of 31 March 2020, YoY growth of 4%. Core AUM growth in Q4 FY21 was $1,270 MM as compared to $279 MM in Q4 FY20. Average AUM growth for 3 quarters of FY20 was $1,315 MM. Ou
Slide 6: Lead financial indicators
Lead financial indicators BAJA) FINANCE LIMITED 8. 10. 11. 12. 13. USD 1= 74 INR Operating expenses in Q4 FY21 were higher by $21 MM vs Q4 FY20. Recovery commission was higher by $19 MM and employee related costs were higher by $20 MM. Opex increase was partly mitigated by prudent management of othe
Slide 7: Lead financial indicators
Lead financial indicators BAJA) FINANCE LIMITED 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. USD 1= 74 INR The bounce rates of new origination across businesses are in line or better than pre-COVID origination. The current bucket bounce fates across portfolios is close to pre-COVID levels. The current bu
Slide 8: Preliminary assessment of second wave
Preliminary assessment of second wave BAJA) FINANCE LIMITED 1. Barring a national lockdown, 3-4 large GDP contributing states going into simultaneous lockdown for 3-5 weeks and another moratorium on loan repayment, the Company is confident of delivering its long term guidance metrics in FY22. Having
Slide 9: Executive summary - Q4 FY21: business update by segments
Executive summary - Q4 FY21 BAJAJ FINANCE LIMITED Business update by segments: 1. Most businesses have started disbursing 90-105% of last year’s volumes with incremental growth being observed every month. 2. In Q4 FY21, urban consumption businesses (B2B) were at 105%, rural consumption business (B2B
Slide 10: Update on business transformation
Executive summary - Q4 FY21 BAJAJ FINANCE LIMITED Update on Business transformation: 9. 10. 11. 12. 13. 14. 15. 16. The Company is on course to deliver its 3-in-1 financial services for its 48.57 MM customers in a seamless manner by creating an omnichannel framework. The omnichannel model will enabl
Slide 11: Customer experience
Executive summary - Q4 FY21 BAJAJ FINANCE LIMITED Customer Experience: The Company has a stated business strategy of ‘acquire and cross sell’. The Company has 48.57 MM customers as of 31 March 2021 and it continues to add 1.8-2.5 MM new customers every quarter. It is imperative for the Company to de
Slide 12: Executive summary - Subsidiaries
Executive summary - Q4 FY21 BAJAJ FINANCE LIMITED USD 1= 74 INR Subsidiaries 23. 24. 25. 26. 27. 28. 29. Bajaj Housing Finance Ltd (BHFL) profit after tax increased by 97% to $24 MM in Q4 FY21 against $12 MM in Q4 FY20. BHFL's AUM increased by 19% to $5,253 MM as of 31 March 2021 from $4,420 MM as o
Slide 13: Bajaj Finance Limited overview
BAJAJ FINANCE LIMITED more 6 Bajaj group structure a t 2] What do we stand for Our general long-term guidance on Financial metrics shareholder profile ® Section 02 el Vl en ts] Key strategic differentiators Bajaj Finance Limited overview ace 6: shareholder profile a Que financial snapshot a 6 Produc
Slide 14: Bajaj group structure
Bajaj group structure BAJA) FINANCE LIMITED Bajaj Holdings & Investment Limited (BHIL) (Listed) Bajaj Finserv Limited (Listed) Financial services arm Bajaj Auto Limited (Listed) Auto business arm Bajaj Finance Limited (Listed) Lending business arm Bajaj Allianz Life Insurance Company Ltd Protection
Slide 15: What do we stand for
What do we stand for BAJA) FINANCE LIMITED “Non-bank with strategy & structure of a bank” “Focused on mass affluent & above clients with a strategy to cross sell” “Diversified financial services strategy with an optimal mix of risk and profit to deliver a sustainable business model” “Business constr
Slide 16: Our general long-term guidance on financial metrics
Our general long-term guidance on financial metrics BAJA) FINANCE LIMITED = AUM growth in corridor of 25 %-27% @Q NNPA in corridor of 0.4%-0.7% — Ce) Profit growth in corridor of 23%-24% ss Return on assets in corridor of 3.3% -3.5% = GNPA in corridor of 1.4%-1.7% al Return on equity in corridor of
Slide 17: Key strategic differentiators
Key strategic differentiators Part of the Bajaj group - one of the oldest & most respected business houses BAJA) FINANCE LIMITED A trusted brand with strong brand equity Focus on mass affluent and above clients Total customer franchise of 48.57 MM Strong focus on cross selling assets, payments, insu
Slide 18: Our shareholder profile
Our shareholder profile Others 0.41% Resident & non resident individuals 9.25% Shareholding profile Corporates ™ Above shareholding is as of 31 March 2021 Promoters & Promoter Group CoN anu sa WnNna BAJA) FINANCE LIMITED Top 20 investors & their holdings Name of Shareholder BAJA) FINSERV LTD GOVERNM
Slide 19: 10-year financial snapshot
10-year financial snapshot BAJA) FINANCE LIMITED Values in MM USD 1=74 INR inanci: @ Fy18®—s FY19®°.—s FY20®—s«#FY21® =~ YoY CAGR Financials snapshot FY12 FY13 FY14 FY15 FY16 FY17 (Consol) (Consol) (Consol) (Consol) (FY20-FY21) (10 yrs) Income from operations 294 420 550 732 991 1,350 1,724 2,500 3,
Slide 20: Product suite
Product suite BAJA) FINANCE LIMITED Consumer SME Commercial Rural Deposits Partnerships & Services 1. Consumer Durable Loans 1. Unsecured Working 1. Loan against securities 1. Consumer Durable 1. Retail Term 1. Life Insurance 2. Digital Product Loans ©) Capital Loans 2. IPO financing Loans Deposits
Slide 21: Executive summary - Consolidated
Executive summary - Consolidated BAJA) FINANCE LIMITED Overview USD 1= 74 INR 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 s
Slide 22: Executive summary - Bajaj Finance Limited
Executive summary - Bajaj Finance Limited BAJA) FINANCE LIMITED Overview USD 1= 74 INR Focused on Consumer, Rural, SME, Commercial and Payments lines of businesses Strategic business unit organization design supported by horizontal common utility functions to drive domain expertise, scalability and
Slide 23: Executive summary - SME, Commercial, Treasury
Executive summary - Bajaj Finance Limited BAJAJ FINANCE LIMITED SME Business USD 1=74 INR Offers unsecured working capital loans to SME and self-employed professionals Secured offerings include enterprise loans against property and financing against used car Focused on affluent SMEs (average sales o
Slide 24: Executive summary - Bajaj Housing Finance Limited
Executive summary - Bajaj Housing Finance Limited BAJAJ FINANCE LIMITED Bajaj Housing Finance Limited USD 1= 74 INR A 100% subsidiary of Bajaj Finance Limited, registered with National Housing Bank as a Housing Finance Company Strategic business unit organization design supported by horizontal commo
Slide 25: Executive summary - Bajaj Housing Finance Limited
Executive summary - Bajaj Housing Finance Limited BAJA) 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 + Alllease rental discounting transactions are backed by rentals t
Slide 26: Executive summary - Bajaj Financial Securities Limited
Executive summary - Bajaj Financial Securities Limited Bajaj Financial Securities Limited A 100% subsidiary of Bajaj Finance Limited, registered with Securities and Exchange Board of India (SEBI) Having membership of Stock Exchanges (NSE and BSE), Depositaries (NSDL & CDSL) and AMFI for distribution
Slide 27: Financial performance - Q4 FY21
BAJA) FINANCE LIMITED i Financial statement summary - po Consolidated lal Section 03 Financial statement summar' ° . ! 1 i] = Financial performance —@ casitinancetmtes Financial statement summary - Bajaj Housing Finance Limited 27
Slide 28: Financial statement summary - Consolidated
Financial statement summary - Consolidated BAJA) FINANCE LIMITED Values in MM USD 1=74 INR Financials snapshot Q4 FY21 Q4 FY20 Interest income 815 Fee and other income 104 Net gain on fair value changes on investment Interest expenses Operating Expenses ECL stage 1& 2 ECL stage 3 & write off 166 1 R
Slide 29: Financial statement summary - Bajaj Finance Ltd.
Financial statement summary - Bajaj Finance Ltd. | BAJAJ FINANCE LIMITED Values in MM USD 1=74 INR Financials snapshot 4 FY21 4 FY20 Interest income 759 (6%) Fee and other income 92 102 (10%) Net gain on fair value changes on investment 6 20 (72%) Interest expenses 1,062 Operating Expenses 725 29 16
Slide 30: Financial statement summary - Bajaj Housing Finance Ltd.
Financial statement summary - Bajaj Housing Finance Ltd. BAJAJ FINANCE LIMITED Values in MM USD 1=74 INR Financials snapshot Q4 FY21 Q4 FY20 Interest income Fee and other income Net gain on fair value changes on Investments Interest expenses Operating Expenses ECL stage 1& 2 ECL stage 3 & write off
Slide 31: Asset liability management
BAJA) FINANCE LIMITED 6 Conservative leverage standards - Bajaj Finance Limited bo 3} Resilient business model - Consolidated Behaviouralized ALM as of 31 March- Bajaj Finance Limited Section 04 Asset liability management | Behaviouralized ALM as of 31 March - Bajaj Housing Finance Limited bn fs) Di
Slide 32: Conservative leverage standards
Conservative leverage standards 7.0 7.0 7.0 7.0 BAJA) FINANCE LIMITED 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 28.2% 28.34% 24.7% 25.10% 23.0% 17.5% 47 4.6 47 15.0% 14.2% 14.6% 5.7% 5.0% 4.4% 2.5% 3.3% 2.9% 3.8% 3.4% - Sieh 3.8% 3.6% 3.5% 3.24% Mar'12 Mar'13 Mar'14 Mar'15 Mar'l6 Mar'17 Mar'18 Mar'19 Mar'20 J
Slide 33: Resilient business model - Consolidated
Resilient business model - Consolidated BAJA) FINANCE LIMITED 47.0% 46.0% 45.0% : 43.69% 44.00% 43.80% 42.24% 34.45% 32.9% 32.30% 27.90% 9/ 9 9 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 8.17% 8.02% 178% 739% 4.2% 41% 3.6% = 3.3% = 3.5% = 3.7% 3.9% AMA, 90% 3.40% © 3.10% Mar'12 Mar'13 Mar
Slide 34: Behaviouralized ALM as of March 2021 - BFL
Behaviouralized ALM as of 31 March 2021 - BFL BAJAJ FINANCE LIMITED Values in MM : 1=74 INR Cash & Investments 1,575 766 2,913 Advances 480 155 385 704 733 1,819 2,656 5,262 2,335 801 Other inflows 6 10 646 3 101 7 169 183 31 640 Borrowings 178 24 175 755 469 756 2,334 6,656 1,733 1,319 = 14,399 Cap
Slide 35: Behaviouralized ALM as of March 2021 - BHFL
Behaviouralized ALM as of 31 March 2021 - BHFL BAJAJ FINANCE LIMITED lues in MM USD 1 = 74 INR Cash & Investments 34 - - Advances 54 23 502 822 267 Other inflows 10 10 32 107 Borrowings Capital Reserves and Surplus Other Outflows Mismatch (E = A- C)
Slide 36: Disciplined ALM Management
Disciplined ALM Management BAJAJ FINANCE LIMITED —Cumulative gap upto 1 month —Cumulative gap upto 12 month —Permissible limit 300% 16% 4% “15% “15% “15% “15% “15% “15% “15% “15% -20% -20% -20% -20% -20% Mar‘12—— Mar‘13 Mar ‘14 Mar ‘15 Mar ‘16 Mar ‘17 Mar‘18 ~—-Mar‘19 Mar’20 —‘Jun’20 Sept’20 Dec’20
Slide 37: Liability mix over the last years
Liability mix over the last 9 years BAJA) FINANCE LIMITED 5% 5% 4% 3% Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Mar'20 Jun'20 Sept'20 Dec'20 Mar'21 = Deposits ™ Bank Loans (incl. CC/OD/WCDL) = NCD Subordinate Debt mShort term Borrowings m= ECB Standalone borrowing mix
Slide 38: Customer franchise and distribution reach
BAJA) FINANCE LIMITED | een © csiomer franchise i Section 05 | Customer franchise and — @ <cossaotic presence distribution reach omen Om distribution reach 38
Slide 39: Customer franchise
Customer franchise BAJA) FINANCE LIMITED Q4 FY20 Q4 FY21 : 3 FY21 42.60 MM 48.57 MM : 46.31MM 33.47 MM 38.50 MM ' 36.60 MM 32.32 MM 37.10 MM : 35.32 MM Non delinquent 28.48 MM customers 32.63 MM ' 30.80 MM Cross sell 24.13 MM franchise 96 39 mm ; 25.25 MM (56.6%) * (55.3%)* (54.5%) * New to Bajaj Fi
Slide 40: Geographic presence
Geographic presence BAJA) FINANCE LIMITED . 31Mar31Mar ~—-31Mar~=«-31Mar_~—«31Dec._=£ 31Mar Geographic Presence 2017 = 2018 ~=—S—«2019~=S—«2020»S«2020 «2021 Of which urban lending branches 377 730 927 1,035 1370: 1148 Of which urban lending franchisee B i 150 Of which rural lending branches 7 219 34
Slide 41: Strong distribution reach
Strong distribution reach Active distribution Consumer durable stores - Urban Consumer durable stores - Rural Digital product stores Lifestyle retail stores EMI card - retail spends stores Bajaj Auto dealers, sub-dealerships and ASSC Direct Sales Agents Overall active distribution network 31 Mar 201
Slide 42: Business segment wise AUM
BAJA) FINANCE LIMITED S e C t i O n 0 6 | a 6 Business segment wise AUM as of 31 March - Business segment wise AUM | boo 36 Business segment wise AUM as of 31 March - ! Mortgages 42
Slide 43: Business segment wise AUM - Consolidated
Business segment wise AUM - Consolidated BAJA) FINANCE LIMITED Values in MM USD 1=74 INR BFL as of BHFL as of Consolidated as Consolidated as Composition as feset Under iienegsame 31March 2021 31.March 2021 of 31 March 2021 of 31March 2020 © th ot 34 arch 2021 Auto Finance Business 1,637 - 1,637 1,7
Slide 44: Break-up of AUM as of 31 March 2021 - Mortgages
Break-up of AUM as of 31March 2021 - Mortgages —_ BAJAJ FINANCE LIMITED Values in MM USD 1=74 INR Bajaj Housing Finance Limited i Mortgage - All Composition as of 31 March 2021 Home Loans 3,236 2,897 12% H 3,720 3,611 3% 56% Assets Under Management 31 March 2021 31. March 2020 ~=—- Growth 331 March
Slide 45: Update on credit quality
BAJA) FINANCE LIMITED ee 6 Provisioning Coverage - Consolidated acc f 2) ECL summary - Consolidated a ts ] ECL summary - Bajaj Housing Finance Limited Sn eo Portfolio stagewise provisioning cece ts) Portfolio credit quality - Consolidated =| Section 07 Update on credit quality 45
Slide 46: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated Assets Under Management consol son GNPA NNPA (%) : i 31 Mar 20 Auto Finance Business 1,637 166 82 50% 6.47% Sales Finance Business 1,558 20 4 77% 1.33% Consumer B2C Business 4,115 68 7 75% 1.62% Rural Sales Finance Business 390 4 1 77% 0.55% Rural B2C Business 1,
Slide 47: ECL summary - Consolidated
ECL summary - Consolidated BAJAJ FINANCE LIMITED Assets categorization Mar’20 Jun’20 Sep’20 Dec’20 po Mar’21 i i Stage 1 & 2 (represents standard assets) 98.39% 98.60% 98.66% 9714% i 98.21% Stage 3 (classified as NPA) 1.61% 1.40% 1.03% 0.55% i 1.79% Stage 3 (not classified as NPA) - - 0.31% 2.32% i
Slide 48: ECL summary - Bajaj Housing Finance Limited
ECL summary - Bajaj Housing Finance Limited BAJA) FINANCE LIMITED ECL categorization Mar’20 Jun’20 Sept’20 Dec’20 Mar’21 Stage 1 & 2 (represents standard assets) 99.92% 99.92% 99.91% 99.65% 99.65% Stage 3 (represents GNPA) 0.08% 0.08% 0.08% 0.06% Stage 3 (not classified as NPA) 0.01% 0.29% Summary o
Slide 49: Portfolio stagewise provisioning as of March 2021
Portfolio stagewise provisioning as of 31 March 2021 BAJA) FINANCE L Auto Finance Business Sales Finance Business Consumer B2C Business Rural Sales Finance Business Rural B2C Business SME Lending Business Securities Lending Business Commercial Lending Business Mortgages Total as of 31 March 2021 Tot
Slide 50: Portfolio credit quality - Consolidated
Portfolio credit quality - Consolidated BAJA) FINANCE LIMITED Consumer Durable & Lifestyle @ | Two & three-wheeler e@ Stage Stage Tst Bucket — m2nd Bucket —_ 3rd Bucket ath Bucket msth Bucket 9 1st Bucket_ m2nd Bucket m3rdBucket 4th Bucket. mSth Bucket m5+ Bucket 1 2 30% 259% 20% 15% 10% = —— ee ~~
Slide 51: Portfolio credit quality - Consolidated
Portfolio credit quality - Consolidated @ m5th Bucket Business & professional loans Stage 1st Bucket ™ 2nd Bucket m3rd Bucket 4th Bucket Rural Lending B2B 1st Bucket BAJA) FINANCE LIMITED @ ™ 2nd Bucket m 3rd Bucket 4th Bucket m5th Bucket 1% — — yz p= = Hf = ee = 0% 0% Dect8 Mar'l9.- June'I9. Sep'19
Slide 52: Portfolio credit quality - Consolidated
Portfolio credit quality - Consolidated Home loans Stage 1st Bucket m 2nd Bucket = 3rd Bucket | 4th Bucket mSth Bucket m5+ Bucket Dec'18 Mar'19 Jun'19 Sep'19 Dec'19 Feb'20.~— Sep'20 Dec'20 Mar'21 BAJA) FINANCE LIMITED 52
Slide 53: Thank You
BAJA) FINANCE LIMITED BAJA) FINANCE LIMITED Q4 FY21 Investor Presentation Thank You
Slide 54: Disclaimer
Disclaimer BAJA) FINANCE LIMITED 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 “Bajaj Finance”. By accessing this presentation, you are agreeing to be bound by the trailing restrictions.