Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q1 FY20 Earnings Presentation
53 slides from Bajaj Finance's earnings presentation, Jul 25, 2019
Slide 1: Cover letter to stock exchanges
BAJAJ FINANCE LIMITED 25 July 2019 THE MANAGER, THE MANAGER, BSE LIMITED LISTING DEPARTMENT DCS - CRD NATIONAL STOCK EXCHANGE OF INDIA LTD. PHIROZE JEEJEEBHOY TOWERS EXCHANGE PLAZA, C-1. BLOCK G, DALAL STREET, BANDRA - KURLA COMPLEX, BANDRA (EAST) MUMBAI - 400 001 MUMBAI - 400 051 SCRIP CODE: 500034
Slide 2: Bajaj Finance Limited Q1 FY20 Investor Presentation
Bajaj Finance Limited Q1 FY20 Investor Presentation 25 July 2019
Slide 3: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary - Financial performance Customer Franchise and Bajaj Housing Finance Q1 FY20 Q1 FY20 distribution reach Limited overview 3 18 26 32 Section 02 Section 04 Section 06 Section 08 Bajaj Finance Limited Asset liability Busine
Slide 4: Executive summary - Q1 FY20
Section 01 Executive summary - Q1 FY20 3
Slide 5: Executive summary - Q1 FY20
Executive summary - Q1 FY20 1. We continued to remain focused on growth, profitability & sustainability. We continued to strengthen our business model in Q1 FY20 as well. 2. AUM grew by 41% to ₹ 1,28,898 crore as of 30 June 2019. Adjusted for IPO financing book, AUM grew by 38% to ₹ 1,26,340 YoY. Ne
Slide 6: Executive summary - Q1 FY20
Executive summary - Q1 FY20 12. Loan loss and provisions grew by 69% in Q1 FY20. Loan losses are in line with last 3 quarters of loan losses and provisions trajectory (Q1 FY19 7%, Q2 FY19 43%, Q3 FY19 63%, Q4 FY19 80%). 13. Consolidated total opex to Net interest Income improved to 35% in Q1 FY20 as
Slide 7: Bajaj Finance Limited overview
Section 02 Bajaj Finance Limited overview 6
Slide 8: Bajaj group structure
Bajaj group structure Bajaj Holdings & Investment Limited (Listed) 35.77% 1 41.63% 2 Bajaj Auto Limited Bajaj Finserv Limited (Listed) (Listed) Auto business arm Financial services arm 74% 74% 54.81% 3 Bajaj Finance Limited Bajaj Allianz Life Bajaj Allianz General (Listed) Insurance Company Ltd Insu
Slide 9: Bajaj Finserv group - Executive summary
Bajaj Finserv group - Executive summary through its various subsidiaries Bajaj Finance Limited Bajaj Allianz General Insurance Limited Bajaj Allianz Life Insurance Limited A 32 year old non bank finance company 2nd largest private general insurer in India as of FY19 Amongst top 5 private players as
Slide 10: What do we stand for
What do we stand for a sustainable ROA of 3% and ROE of 18-20% in the medium term 9
Slide 11: 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% 22%-23% 1.4%-1.7% NNPA Return on assets Return on equity in corridor of in corridor of in corridor of 0.4%-0.7% 3.3%-3.5% 18%-20% 10
Slide 12: 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 Overall franchise of 36.94 MM and cross sell client base of Focus on mass affluent and above clients 21.85 MM Centre of Excellence for each business verti
Slide 13: Our Shareholder profile
Our Shareholder profile Top 20 investors & their holdings MF As on 30 As on 31 As on 30 6.99% S.No Name of Shareholder Jun 19 Mar 19 Jun 18 Others 1 BAJAJ FINSERV LTD 54.81% 54.99% 54.99% 2 GOVERNMENT OF SINGAPORE 3.74% 3.68% 3.54% 1.88% 3 MAHARASHTRA SCOOTERS LTD. 3.27% 3.28% 3.28% Resident 4 STEAD
Slide 14: 12 year financial snapshot
12 year financial snapshot 58.1% 34.5 PBT 6,179 CAGR 62% 26.2 7.05% 50.6% 20.1 5.50% 16.1 47.0% 3,843 46.0% 12.9 44.8% 44.4% 44.6% 10.1 8.1 45.0% 43.1% 2,818 6.4 4.9 3.7 40.2% 2.5 2.9 1,965 41.4% 2.20% 1,357 1,091 872 35.3% 602 370 30 51 134 0.80% 0.63% 0.45% 0.44% 0.43% 0.19% 0.28% 0.28% 0.12% ^ AU
Slide 15: Product suite
Product suite BAJAJ FINANCE LIMITED Consumer SME Commercial Rural Deposits Partnerships & Services • Consumer Durable Loans • Unsecured Working • Securities Lending • Consumer Durable • Retail Term • Life Insurance Capital Loans (E) Loans Deposits Distribution • Digital Product Loans (E) • Large Val
Slide 16: Executive summary Consolidated
Executive summary Consolidated Overview • 32 year old non bank with a demonstrated track record of profitable growth • Diversified financial services company focused on Consumer, Payments, Rural, SME, Commercial and Mortgages • Focused on mass affluent client with a strategy to cross sell • Strong f
Slide 17: Executive summary Standalone
Executive summary Standalone Overview • Focused on Consumer, Payments, Rural, SME and Commercial lines of businesses • Strategic business unit organization design supported by horizontal common utility functions to drive domain expertise, scalability and operating leverage • Focused on cross sell, c
Slide 18: Executive summary Standalone
Executive summary Standalone SME Business • Offers unsecured working capital loans to SME & self employed professionals • Secured offerings include enterprise loans against property and financing against used car • Focused on affluent SMEs (average sales of ₹ 10-12 crore) with established financials
Slide 19: Financial performance Q1 FY20
Section 03 Financial performance Q1 FY20 18
Slide 20: Financial Statement Summary Consolidated
Financial Statement Summary Consolidated ₹ in crore Financials snapshot Q1 FY20 Q1 FY19 Y-o-Y FY19 FY18 Y-o-Y Assets under management 1,28,898 91,287 41% 1,15,888 82,422 41% Assets under finance 1,25,113 87,877 42% 1,12,513 79,103 42% Interest income 5,101 3,510 45% 16,349 11,586 41% Fee and other i
Slide 21: Asset liability management
Section 04 Asset liability management 20
Slide 22: Behaviouralized ALM snapshot as on 30 June 2019 - BFL
Behaviouralized ALM snapshot as on 30 June 2019 - BFL Particulars 1m >1 to 2m >2 to 3m >3 to 6m >6m to 1 yr >1 to 3 yr >3 to 5 yr >5 yr Total Cash, Cash Equivalents & Investments 5,586 2 2 5 84 208 1,108 4,175 11,171 Advances 10,134 5,845 5,586 13,967 18,288 35,013 13,328 4,694 1,06,854 Other inflow
Slide 23: Disciplined ALM Management over the last years
Disciplined ALM Management over the last 8 years Cumulative gap upto 1m Cumulative gap upto 12m Permissable limit 141% 0 119% 120% - - 96% - 71% 57% - 48% 61% 50% 38% 36% 51% 39% - 44% 36% 29% 16% - 4% - -15% -15% -15% -15% -15% -15% -15% -15% -15% - 22
Slide 24: Liability mix over the last 8 years
Liability mix over the last 8 years.. 8% 5% 5% 8% 8% 11% 9% 10% 13% 4% 3% 3% 4% 6% 5% 3% 7% 4% 31% 33% 38% 35% 25% 38% 35% 40% 43% 34% 54% 34% 58% 58% 48% 53% 31% 35% 12% 15% 16% 0% 0% 6% 8% 1% 4% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Jun'19 Deposits Bank Loans (incl. CC/OD/WCDL) N
Slide 25: Conservative leverage standards
Conservative leverage standards 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 6.8 6.6 24.7% 6.6* 6.4 6.3 6.3 6.2 22.0% 20.3% 5.4 20.7% 5.3 19.5% 19.5% 19.1% 17.5% 18.0% 19.7% 18.7% 16.2% 16.1% 16.3% 15.0% 15.5% 14.2% 14.6% 5.7% 5.0% 3.8% 4.4% 4.0% 3.3% 3.0% 3.4% 2.5% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17
Slide 26: Resilient business model
Resilient business model 47.0% 43.1% 46.0% 45.0% 41.4% 41.8% 44.6% 38.4% 38.6% 38.2%* 36.0% 35.3% 35.0% 32.9% 33.3% 29.9% 28.4% 26.4% 9.1% 9.7% 9.9% 9.9% 9.5% 9.0% 8.2% 8.3% 8.5% 4.2% 4.1% 3.6% 3.3% 3.5% 3.7% 3.9% 4.1% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% @ @ Benchmark ROA ROA COF Fee I
Slide 27: Customer franchise and distribution reach
Section 05 Customer franchise and distribution reach 26
Slide 28: Customer franchise
Customer franchise Q1 FY19 Q1 FY20 Q4 FY19 28.28 MM Total Franchise 36.94 MM 34.48 MM 21.61 MM Credit segment filter 29.09 MM 26.93 MM 20.68 MM Overall Cross sell franchise 28.00 MM 25.89 MM Non delinquent 18.77 MM customers 25.18 MM 23.26 MM Cross sell franchise 16.55 MM 21.85 MM Addition of 1.18 M
Slide 29: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 30 Jun Geographic Presence 2016 2017 2018 2019 2019 Urban 262 377 730 927 944 Rural 397 538 602 903 951 Of which Rural Lending branches 105 177 219 347 385 Of which Rural Lending franchisees 292 361 383 556 566 Total Bajaj Finance presence 659 915 1,33
Slide 30: Strong distribution reach
Strong distribution reach Active distribution point of sale 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Mar 2019 30 Jun 2019 Consumer durable stores Urban 9,400+ 14,000+ 15,500+ 20,400+ 22,000+ Consumer durable stores Rural 3,200+ 5,500+ 8,200+ 14,500+ 15,200+ Digital product stores 5,200+ 5,900+ 15,900+
Slide 31: Business segment wise AUM
Section 06 Business segment wise AUM 30
Slide 32: Business segment wise AUM as of 30 June 2019
Business segment wise AUM as of 30 June 2019 ₹ crore Standalone as of BHFL as of Consolidated Consolidated Composition as Assets Under Management Growth 30 Jun 2019 30 Jun 2019 as of 30 Jun 2019 as of 30 Jun 2018 of 30 Jun 2019 Consumer B2B -Auto Finance Business 10,908 - 10,908 6,749 62% 8% Consume
Slide 33: Bajaj Housing Finance Limited Overview
Section 07 Bajaj Housing Finance Limited Overview 32
Slide 34: Executive summary Bajaj Housing Finance Limited
Executive summary Bajaj Housing Finance Limited Bajaj Housing • Bajaj Housing Finance Limited is a 100% subsidiary of Bajaj Finance Limited, registered with National Housing Bank as a Housing Finance Limited Finance Company • It offers full range of mortgage products such as home loans, loan against
Slide 35: Executive summary Bajaj Housing Finance Limited
Executive summary Bajaj Housing Finance Limited • Offers construction finance and inventory finance mainly to category A and A+ developers in India Developer Finance • Average ticket size ranges between 15 35 crore • Currently present in 8 locations (Mumbai, Bangalore, Pune, Ahmedabad, Chennai, Kolk
Slide 36: Portfolio Composition Bajaj Housing Finance Limited
Portfolio Composition Bajaj Housing Finance Limited ₹ in Crore Product Category Home Loan Portfolio Customer Categorisation Others Rural 690 1,083 3% Self-Employed DF 5% 1,030 1,739 5% 12% LRD 2,272 10% LAP 2,518 Home Loan 12% 14,152 65% Salaried 12,413 88% Salaried focused Home Loans acquisition st
Slide 37: Customer Profile Bajaj Housing Finance Limited
Customer Profile Bajaj Housing Finance Limited Home Loan Loan Against Property Average Loan Size Overall 37 lakhs 27 lakhs Average Loan Size Urban 39 lakhs 45 lakhs Average Loan Size Rural 18 lakhs 11 lakhs LTV (at origination) 69% 49% Average Loan Term Overall 18 years 11 years Average Customer Age
Slide 38: Financial statement summary Bajaj Housing Finance Limited
Financial statement summary Bajaj Housing Finance Limited ₹ in Crore Financials snapshot Q1 FY20 Q1 FY19 FY19 FY18 Asset under management 21,745 7,232 17,562 3,570 Asset under financing 20,449 7,232 17,332 3,570 Interest income 457 115 998 74 Fees and other income 57 31 158 32 Total Income 514 146 1
Slide 39: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited ECL categorization Stage 1 & 2 (represents standard assets) 100.00% 99.98% 99.97% 99.95% 99.94% Stage 3 (represents GNPA) 0.00% 0.02% 0.03% 0.05% 0.06% Summary of stage wise assets and ECL provisioning ₹ in Crore Assets & ECL provision Gross Stage 1 & 2 asse
Slide 40: Behaviouralized ALM snapshot as on 30 June 2019 - BHFL
Behaviouralized ALM snapshot as on 30 June 2019 - BHFL Particulars 1m >1 to 2 m >2 to 3 m >3 to 6m >6m to 1 yr >1 to 3 yr >3 to 5 yr >5 to 7 yr >7 to 10 yr >10 yr Total Cash & Investments 1,396 - - - - - - - - - 1,396 Advances 350 208 204 603 1,140 4,107 2,854 2,092 2,595 6,411 20,565 Trade Receivab
Slide 41: Update on credit quality
Section 08 Update on credit quality 40
Slide 42: Credit quality Portfolio composition
Credit quality Portfolio composition Consumer durable Two & three wheeler 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket Bkt 0 98.38% 98.58% 98.83% 98.91% 99.04% 98.91% 98.96% 98.69% 98.54% Bkt 0 85.88% 85.82% 87.85% 88.76% 87.
Slide 43: Portfolio Credit quality Including BHFL
Portfolio Credit quality Including BHFL Personal loans cross sell Salaried personal loans 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Bkt 0 97.18% 97.26% 97.46% 97.62% 97.64% 97.69% 97.81% 97.76% 97.46% Bkt 0 99.50% 99.57% 99.63% 99.7
Slide 44: Portfolio Credit quality Including BHFL
Portfolio Credit quality Including BHFL Home loans Rural Lending B2B 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Bkt 0 98.91% 98.82% 98.96% 99.48% 99.49% 99.40% 99.54% 99.52% 99.42% Bkt 0 99.25% 99.49% 99.56% 99.46% 99.49% 9
Slide 45: Credit Quality Provisioning Coverage
Credit Quality Provisioning Coverage Consolidated GNPA NNPA PCR Assets Under Management AUM GNPA NNPA 30 Jun 18 31 Mar 19 30 Jun 19 30 Jun 18 31 Mar 19 30 Jun 19 (%) 30 Jun 2019 % % % % % % Auto Finance Business 10,908 602 241 60% 5.70% 5.12% 5.19% 2.27% 2.06% 2.14% Sale Finance Business 14,086 196
Slide 46: NPA movement - consolidated
NPA movement - consolidated Values in ₹ Cr Particulars Assets Under Management 91,287 98,013 1,07,508 1,15,888 1,28,898 Opening GNPA (A) 1,164 1,280 1,471 1,691 1,804 Roll Forward into NPA (i) 378 480 702 593 697 Restructuring (ii) 1 3 13 14 5 Total Slippages (B = i + ii) 379 483 715 607 702 Roll ba
Slide 47: ECL summary - consolidated
ECL summary - consolidated Assets categorization Stage 1 & 2 (represents standard assets) 98.61% 98.51% 98.45% 98.46% 98.40% Stage 3 (represents GNPA) 1.39% 1.49% 1.55% 1.54% 1.60% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Gross stage 1 & 2 a
Slide 48: Thank You
BAJAJ FINANCE LIMITED Q1 FY20 Investor Presentation Thank You
Slide 49: 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 50: Annexures
BAJAJ FINSERV Annexures 49
Slide 51: ALM strategy (standalone)
ALM strategy (standalone) Borrowings ₹ 94,462 Crs) Borrowings ₹ 86,352 Crs) 415, 995, 1% 9,588, 1% 6,355, 7% 10% Banks Banks 13,193, 15% 29,556, 31,556, NCDs 15,084, 16% NCDs 34% 34% Subordinate Debts Subordinate Debts 4,139, 5% Deposits Deposits 4,159, 4% CP CP CBLO CBLO 33,080, 32,693, 35% 38% Beh
Slide 52: Financial snapshot
Financial snapshot ₹ in Crores FY18@ FY19 @ YoY CAGR Financials snapshot @ FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 (Consol.) (Consol.) (FY18 FY19) (12 yrs) Assets under management 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 41% 42% Income from operatio
Slide 53: Glossary
Glossary 2W Two Wheeler IFA Independent Financial Advisor 3W Three Wheeler IRR Internal Rate of Return ACMF Auto Components Manufacturer Financing LAP Loan Against Property ALM Asset & Liability Management LAS Loan Against Securities AR Assets Receivable MF Mutual Fund ARU Activation, Retention & Us