Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q1 FY21 Earnings Presentation
48 slides from Bajaj Finserv's earnings presentation, Jul 21, 2020
Slide 1: Letter to stock exchanges on Q1 investor presentation
21 July 2020 To To Corporate Relations Department. Corporate Listing Department. SSE Limited National Stock Exchange of India Ltd 1 st Floor, New Trading Ring, Exchange Plaza, 5th Floor Rotunda Building, P J Tower, Plot No.C-1, G Block, Dalal Street, Mumbai 400 001 Bandra-Kurla Complex, Bandra (East
Slide 2: Bajaj Finserv Limited Investor Presentation – Q1 FY21
BAJAJ FINSERV LIMITED Investor Presentation – Q1 FY21* * Financial year 2020-21
Slide 3: Bajaj Group Structure
Bajaj Group Structure Bajaj Holdings & Investment Limited (BHIL) 51% 33.43%@ 39.16%@ Maharashtra Scooter Bajaj Auto Limited Bajaj Finserv Limited Limited 52.82%@ 74% 74% Bajaj Finance Limited Bajaj Allianz General Insurance Bajaj Allianz Life Insurance • Set up in 1987: BFL is a 33 year old Company
Slide 4: Bajaj Finserv's Vision – A diversified financial services group
Bajaj Finserv’s Vision – A diversified financial services group with a pan- India presence Life cycle needs Investment/ Asset Asset Family Income of Individual & Wealth acquisition protection Protection protection SME customers management Lending General Insurance Health Insurance Life Insurance Lif
Slide 5: Bajaj Finserv – A resilient diversified financial services business
Bajaj Finserv – A resilient diversified financial services business BFL’s robust liquidity management framework has ensured that it Bajaj Finance Limited has liquidity to meet its debt service obligations, despite it having to offer repayment moratoriums to its customers. BFL’s excellent risk manage
Slide 6: Bajaj Finserv performance highlights – Q1 FY21
Bajaj Finserv performance highlights – Q1 FY21 All Figures in Rs Million Performance Highlights of Q1 FY20 over Q1 FY20 (Ind AS) 141,920 12,152 329,571 35,859 CY 16% 44% 32% 13% PY 122,723 8,453 248,762 31,645 Total Revenue PAT* Net Worth Net Worth (Consolidated) (Consolidated) (Consolidated) (Stand
Slide 7: Consolidated profit components – Q1 FY21
Consolidated profit components – Q1 FY21 All Figures in Rs Million Consolidated profit components for Q1 FY21 (Ind AS) Unusual items ❑ MTM* Gains on BAGIC & BALIC investments Intercompany adjustments - Rs 3,300 Mn (post-tax) Bajaj Finserv- ❑ Impact of COVID - BFL Contingency Standalone 106 provision
Slide 8: Q1 FY21 Highlights
Q1 FY21 Highlights All Figures in Rs Million Highlights of Group Companies BAJAJ FINSERV# Q1 FY21 Q1 FY20 Growth BAJAJ FINANCE# Q1 FY21 Q1 FY20 Growth Total Revenue 141,920 122,723 16% AUM 1,380,546 1,288,976 7% Net worth 329,571 248,762 32% Total Income 66,497 58,078 14% PAT 12,152 8,453 44% PAT 9,
Slide 9: Bajaj Finance Limited
BAJA FINSERV Bajaj Finance Limited
Slide 10: BFL – Key Strategic Differentiators
BFL – KEY STRATEGIC DIFFERENTIATORS STRATEGY • Diversified financial services strategy seeking to optimise risk and profit, to deliver a sustainable business model and deliver a superior ROE and ROA • Focused on continuous innovation to transform customer experience to create growth opportunities. D
Slide 11: BFL: Business Segments
BFL : Business Segments BAJAJ FINANCE Consumer SME Commercial Rural • Largest consumer • Focused on affluent • Wholesale Lending • Unique hub-and-spoke electronics, digital products SMEs with an average products covering short, model in 1,359 locations & furniture lender in India annual sales of aro
Slide 12: BFL's – Summary on Covid-19
BFL’s – Summary on Covid-19 ❑ Business operations in Q1 FY21 were considerably impacted due to COVID-19 pandemic and the consequent lockdowns which remained for most of Q1 FY21. ❑ Restarted its sales finance, auto finance, LAS and Gold loan businesses with stringent loan to value (LTV) and underwrit
Slide 13: BFL's – Summary on Covid-19
BFL’s – Summary on Covid-19 ❑ Consolidated moratorium book has reduced sharply to Rs. 21,705 crore (15.7% of AUM) as of 30 June 2020 from Rs. 38,599 crore (27.1% of AUM) as of 30 April 2020 owing to reduction bounce / dishonor rates coupled with improved collection efficiencies. ❑ Company has made a
Slide 14: BFL – Key Highlights
BFL – Key Highlights Q1 2020-21 ❑ AUM growth moderated to 7% YoY to Rs. 138,055 crore from Rs. 128,898 crore as of 30 June 2020 ❑ New loans booked declined by 76% to 1.7 Mn in Q1 FY21 from 7.27 Mn in Q1 FY20. Company acquired 0.53 Mn new customers in Q1 FY21. ❑ Company through its Zero based budgeti
Slide 15: BFL – Key Highlights
BFL – Key Highlights Q1 2020-21 ❑ The Company is well capitalised with Capital adequacy ratio (including Tier-II capital) of 26.4% as at 30 June 2020. The Tier-I capital stood at 22.6%. The Company remains one of the best capitalised large NBFCs in India. Subsidiaries (included in BFL Consolidated P
Slide 16: BFL – Q1 FY21 highlights
BFL – Q1 FY21 highlights All Figures in Rs Million Performance Highlights of Q1 FY21 over Q1 FY20 (Ind AS) CY 1,380,546 66,497 9,623 7% 14% -19% PY 1,288,976 58,078 11,953 Book Size Total Income Profit After Tax CY 0.7% 2.9% • Borrowing mix is not excessively dependent on banks. (Mix of 39: 40 : 17
Slide 17: BFL: Growth Continues
BFL : Growth Continues All Figures in Rs Million FY20 Book Size Q1 FY21 FY20 Total Income Increase of 26% Increase of 6% Increase of 43% 2,63,857 14,13,760 12,51,130 13,23,678 11,25,128 1,85,002 Q1 FY21 Increase of 14% 58,078 66,497 FY19 FY20 Q1 FY20 Q1 FY21 FY19 FY20 Q1 FY20 Q1 FY21 Net Interest In
Slide 18: BFL: Growth aided by low NPA and control on Opex
BFL : Growth aided by low NPA and control on Opex All Figures in Rs Million • Loan losses and provisions (expected credit loss) for Q1 Loss Provision and Net NPA% FY21 was Rs. 1,686 Cr as against Rs. 551 Cr in Q1 FY20. 39,295 40,000 2.00% Adjusted for Covid-19 provision, loan losses and 35,000 provi
Slide 19: Bajaj Allianz General Insurance
Bajaj Allianz General Insurance 18
Slide 20: BAGIC – Key Strategic Differentiators
BAGIC – KEY STRATEGIC DIFFERENTIATORS STRATEGY Strive for market share growth in chosen segments through a well-diversified product portfolio and multi-channel distribution supported by prudent underwriting DIFFERENTIATORS ▪ Industry leading combined ratios consistently over Strong selection of Risk
Slide 21: BAGIC's – Summary on Covid-19
BAGIC’s – Summary on Covid-19 ❑ The lockdown during Q1 FY21 has adversely impacted new sales in few segments. Although there has been easing of lockdown since later half of May, volumes are still below pre-COVID levels. ❑ Motor insurance has seen a de growth of 32.6% YoY on the back of lower sales o
Slide 22: BAGIC – Key Highlights
BAGIC – Key Highlights Q1 2020-21 ❑ BAGIC GWP de-grew by 19 % in Q1 FY21 vs Industry de - growth of 6%; ❑ During Q1 FY21, BAGIC’s GWP ex-crop, GMC and Government health de - grew by 11.3% vs Industry de – growth of 7.1%. BAGIC has been cautious on Employer Employee Group health for some time due to
Slide 23: BAGIC: Q1 FY21 highlights
BAGIC : Q1 FY21 highlights All Figures in Rs Million Performance Highlights of Q1 FY21 over Q1 FY20 CY 22,891 13,737 18,178 3,949 -19% -20% -7% 88% PY 28,433 17,167 19,464 2,104 Gross Written Net Written Premium Net Earned Premium Profit After Tax Premium 6.6% ▪ Ex Crop GWP was Rs. 22,708 Mn in Q1 F
Slide 24: BAGIC: Combined Ratio
BAGIC : Combined Ratio Combined Ratios (CoR) 100.8% 103.1% 96.7% 97.6% 92.3% FY18 FY19 FY20 Q1 FY20 Q1 FY21 1. Combined Ratios are in accordance with the Master Circular on ‘Preparation of Financial statements of General Insurance Business’ issued by IRDA effective from 1st April, 2013. (Net claims
Slide 25: BAGIC: Profit after tax and capital efficiency
BAGIC : Profit after tax and capital efficiency All Figures in Rs Million PAT Q1 FY21 PAT growth of 88% 9,988 9,212 7,799 Rs. Million 3,949 2,104 FY18 FY19 FY20 Q1 FY20 Q1 FY21 Total Capital infused is Rs.2,768 Mn BAGIC - Capital Invested - Networth Accumulated profit* 96% of Net worth as on 30 Jun
Slide 26: BAGIC: Consistently amongst top private insurers in terms of Gross Premium
BAGIC : Consistently amongst top 2 private insurers in terms of Gross Premium Industry GDPI Trend (Rs. Bn.) Q1 FY21 GDPI de growth of 4% 1,787 1,617 1,415 1,056 930 737 407 389 678 687 730 234 218 173 171 FY18 FY19 FY20 Q1 FY20 Q1 FY21 PSU Private Insurers* Industry BAGIC Premium Trend Q1 FY21 Premi
Slide 27: BAGIC: Balanced product mix
BAGIC : Balanced product mix Business Mix 8% 8% 10% 11% 10% 1% 13% 4% 20% 19% 19% 33% 15% 15% 13% 14% 18% 9% 11% 6% 5% 13% 5% 5% 7% 44% 44% 41% 43% 36% FY18 FY19 FY20 Q1 FY20 Q1 FY21 Motor (Retail) Health (Retail) Group Health Prop, Liability, Engg Agri (Crop Insurance) Others ▪ BAGIC’s GWP ex-crop,
Slide 28: BAGIC: Diversified Channel Mix
BAGIC: Diversified Channel Mix Channel Mix 23% 24% 20% 31% 27% 37% 40% 37% 39% 32% 7% 4% 6% 9% 4% 12% 12% 13% 13% 8% 20% 21% 20% 20% 21% FY18 FY19 FY20 Q1 FY20 Q1 FY21 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business ▪ BAGIC has the largest network of banc
Slide 29: BAGIC: Assets Under Management
BAGIC : Assets Under Management AUM (cash and investments) Q1 FY21 Increase of 12% BAGIC 1,96,115 continues to 1,87,458 grow its AUM 1,72,367 1,74,656 strongly 1,48,229 Rs. Million Investments are largely in fixed income securities Investment Leverage of 3.13x as on 30 Jun 2020 FY18 FY19 FY20 Q1 FY2
Slide 30: Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance 29
Slide 31: BALIC – Key Strategic Differentiators
BALIC - KEY STRATEGIC DIFFERENTIATORS STRATEGY • Continued focus on sustainable and profitable growth by maintaining balanced product mix and investment in retail growth engines • Business construct is to maximize customer benefits while gaining market share in retail space, maintaining shareholder
Slide 32: BALIC's – Summary on Covid-19
BALIC’s – Summary on Covid-19 ❑ New business is challenged for the Life insurance sector although June was better than April and May. ❑ Preference for protection and guarantees: Higher customer orientation to cover risk and a corresponding drop in Fixed deposits rates has led to increased preference
Slide 33: BALIC – Key Highlights
BALIC – Key Highlights Q1 2020-21 ❑ Despite Covid-19 related lockdown, BALIC Individual Rated premium growth was flat in Q1 FY21 vs Industry de growth of 18% (Private sector de-grew by 23%) ❑ Excluding fund business, Group Protection business de – grew by 78% primarily on account of low loan disburs
Slide 34: BALIC – Q1 FY21 highlights
BALIC – Q1 FY21 highlights All Figures in Rs. Million Performance Highlights of Q1 FY21 over Q1 FY20 CY 3,306 3,974 9,579 16,997 0% -40% 16% -7% PY 3,322 6,678 8,227 18,367 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 1,300 760% Solvency Ratio 111% as on 30 Jun 2020 PY 617 P
Slide 35: BALIC: Ticket Size
BALIC : Ticket Size All Figures in Rs. Regular Premium Ticket Size Regular Premium Ticket Size (Agency) FY20 Q1 FY21 FY20 Increase of Q1 FY21 Decrease of increase of 10% decrease of 40% 14% 52% 61,716 60,823 87,305 85,211 56,128 74,714 36,465 42,167 FY19 FY20 Q1 FY20 Q1 FY21 FY19 FY20 Q1 FY20 Q1 FY2
Slide 36: BALIC: Persistency
BALIC : Persistency Persistency 13th Month Persistency 25th Month 80% 71% 79% 68% 69% 77% 77% 67% Persistency - 13th Month Persistency - 25th Month FY19 FY20 Q1 FY20 Q1 FY21 FY19 FY20 Q1 FY20 Q1 FY21 Persistency 37th Month Persistency 49th Month Persistency 61st Month 58% 51% 40% 40% 57% 49% 39% 55%
Slide 37: BALIC: Individual Rated New Business
BALIC : Individual Rated New Business All Figures in Rs Million Individual Rated NB Individual Rated NB Agency FY20 Increase of 11% FY20 decrease of 10% Q1 FY21 growth is 12,039 19,271 10,826 Q1 FY21 decrease 17,420 flat of 16% 3,322 3,306 1,845 1,554 FY19 FY20 Q1 FY20 Q1 FY21 FY19 FY20 Q1 FY20 Q1 F
Slide 38: BALIC: Balanced product mix
BALIC : Balanced product mix Individual Rated Mix Share of Non-ULIP business in individual business increasing 37% 51% Individual - Unit Linked 60% 61% Individual - Non Par Protection 1% 17% 1% Individual - Non Par Savings 20% 0% 9% 17% Individual - Par 33% 30% 28% 22% 13% FY19 FY20 Q1 FY20 Q1 FY21
Slide 39: BALIC: Assets Under Management
BALIC : Assets Under Management AUM (Mix) • AUM as on 30 Jun 2020 grew by 5%; Growth is UL AUM stunted primarily due to Covid-19 impact 579 610 on stock market; Traditional 566 561 382 AUM grew by 9% 336 365 351 230 196 228 228 • Of the UL Funds of Rs.228 Bn., 58% is equity as on 30 Jun 2020 (61% as
Slide 40: Update on Covid-19 – Bajaj Finserv
Update on Covid-19 – Bajaj Finserv 39
Slide 41: Bajaj Finserv – Update on Covid-19
Bajaj Finserv – Update on Covid-19 Activated Business Continuity Plan ❑ Emergency response teams monitoring the situation; Implementing actions on real time 1 ❑ Board and Committee meetings being held through video conferencing ❑ Swiftly moved the IT infrastructure to ensure availability of adequate
Slide 42: Bajaj Finserv – Update on Covid-19
Bajaj Finserv – Update on Covid-19 Partners / Distribution ❑ Continuous engagement with partners 4 ❑ Provided virtual product & process trainings; understanding the needs of different partners ❑ Mapping of partner capabilities and integration of new processes at priority, ensuring smooth transition
Slide 43: Bajaj Finserv – Summary on Covid-19
Bajaj Finserv – Summary on Covid-19 ❑ Overall, all our companies are very well capitalized and have sufficient liquidity. Hence, we are confident to see through this crisis. ❑ At this stage all the estimates are based on best judgements – all one can do is to focus on the right drivers ❑ To accurate
Slide 44: Annexure
Annexure
Slide 45: BAGIC: LOB wise Net Claim ratio (Major LOBs)
BAGIC : LOB wise Net Claim ratio (Major LOBs) Net Claim Ratio Line of Business Q1 FY21 Q1 FY20 FY20 FY19 Fire** 118.1% 93.8% 68.0% 74.4% Marine Cargo 77.3% 79.6% 67.3% 94.0% Motor OD 50.7% 67.0% 67.7% 60.0% Motor TP 79.8% 66.2% 64.5% 64.5% Motor Total 68.0% 66.5% 65.8% 62.4% Engineering 102.3% 30.4%
Slide 46: Exposure to Downgraded Investments (Debt): BALIC & BAGIC
Exposure to Downgraded Investments (Debt) : BALIC & BAGIC THERE WERE NO ADDITIONAL IMPAIRMENTS IN Q1 FY21 BALIC Type of Fund (BALIC) Total exposure as of Of which Impairment Sr. No. Of which performing (Amt in Rs. Mn) 30 June 2020 (non performing) Provided for 1 PAR 2,992 1,042 1,950 2,108 2 N-PAR 4
Slide 47: Disclaimer
Disclaimer This presentation has been prepared by Bajaj Finserv Limited (the “Company”) solely for your information and for your use. This presentation is for information purposes only and should not be deemed to constitute or form part of any offer or invitation or inducement to sell or issue any s
Slide 48: Thank You
BAJA FINSERV Thank You