Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Bajaj Finance — Q2 FY22 Earnings Presentation
54 slides from Bajaj Finserv's earnings presentation, Oct 26, 2021
Slide 1: Q2 FY22 Investor Presentation 26 October 2021
Q2 FY22 Investor Presentation 26 October 2021
Slide 2: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary Financial performance Customer franchise and Update on Q2 FY22 Q2 FY22 distribution reach credit quality 4 28 35 46 Section 02 Section 04 Section 06 Bajaj Finance Limited Asset liability Business segment wise overview ma
Slide 3: Section 01 Executive summary Q2 FY22
1.1 Quarter gone by Section 01 Executive summary Q2 FY22 1.2 Lead financial indicators 3
Slide 4: Quarter gone by
Quarter gone by A quarter of strong revival across growth, risk, debt management and financial metrics. In absence of a third wave, quite confident about second half of the year on growth, risk and financial metrics. Business transformation go-live is behind schedule by 45 days due to delays in cert
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. AUM as of 30 September 2021 was at $22,559 MM as against $18,526 MM as of 30 September 2020. Core AUM growth* in Q2 FY22 was ~ $1,507 MM. In absence of a third wave, the Company e
Slide 6: Lead financial indicators
Lead financial indicators 8. Deposits book on a YOY basis grew by 33% to $3,881 MM as of 30 September 2021. Its contribution to consolidated borrowings was 20%. Retail : Corporate mix stood at 77 : 23 in Q2 FY22. 9. Opex to NII for Q2 FY22 was 38.1% vs 27.8% in Q2 FY21. The increase in operating exp
Slide 7: Lead financial indicators
Lead financial indicators 17. Non overdue one-time restructuring (OTR) book as of 30 September 2021 increased to $204 MM vs $174 MM as of 30 June 2021. In Q2 FY22 the Company offered OTR of $58 MM under OTR 2.0 framework. The Company has considered OTR as an indicator of significant increase in cred
Slide 8: Omnipresence strategy July AGM announcement
Omnipresence strategy July AGM announcement Omnipresent financial services Company. The Omnipresence strategy will enable our existing and new customers to engage, transact and be serviced online to offline and vice 8
Slide 9: Omnipresence strategy update
Omnipresence strategy update Geography 1. Total geographic footprint stood at 3,329 locations and 1,19,900+ distribution points. During the quarter, the Company expanded its presence by 216 new locations. The company is growing its geographic footprint in north and east as GDP contribution of North
Slide 10: Omnipresence strategy update
Omnipresence strategy update Consumer app upgrade 1. The current consumer app has 12.9 MM active customers as of 30 September 2021. 2. The upgrade of our new consumer app is delayed by 45 days on account of delays in certain tech deliveries and code freeze for festival season. 3. As part of our spri
Slide 11: Omnipresence strategy update
Omnipresence strategy update Productivity apps 1. The new Debt management services app has gone live for ~9 K employees and ~34 K+ agency resources. The app enables agency staff onboarding, cash receipting, training, communication, compliance features, dialer integration and call recording. The app
Slide 12: Lead Financial Indicators Subsidiary companies
Lead Financial Indicators Subsidiary companies Bajaj Housing Finance Limited (BHFL) 1. $6,004 MM as of 30 September 2021 from $4,522 MM as of 30 September 2020. 2. $54 MM from $34 MM in Q2 FY21. 3. opex to NII stood at 27.8% in Q2 FY22 as against 28.2% in Q2 FY21. 4. loan losses and provisions for Q
Slide 13: 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 14: 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 15: 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 15
Slide 16: 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% 16
Slide 17: 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 52.8 MM Strong focus on cross selling assets, payments, Centre of Excellence for each
Slide 18: Our shareholder profile
Our shareholder profile Top 20 investors & their holdings As on 30 As on 30 As on 30 S.No Name of Shareholder Sept 21 Jun 21 Sept 20 1 BAJAJ FINSERV LTD 52.65% 52.65% 52.74% 2 GOVERNMENT OF SINGAPORE 3.31% 4.09% 4.20% FII & FPI 3 MAHARASHTRA SCOOTERS LIMITED 3.14% 3.14% 3.15% 23.64% 4 NEW HORIZON OP
Slide 19: 14-years financial snapshot
14-years financial snapshot Values in MM USD 1 = 74 INR 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 335 343 545 1,023 1,771 2,367 3,251 4,380 5,977 8,135 11,138 15,661 19,886 20,
Slide 20: 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 21: 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 22: 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 23: 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 and financing against used car • Focused on affluent SMEs (average sales of $2 to 3 MM) with established
Slide 24: 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 • Strategic business unit organization design supported by horizontal common utility functions to drive domai
Slide 25: 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 • All lease rental discounting transactions are backed by rentals through escrow mechani
Slide 26: 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 27: Section 03 Financial performance Q2 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 27
Slide 28: Financial statement summary Consolidated
Financial statement summary Consolidated Values in MM USD 1 = 74 INR Financials snapshot Q2 FY22 Q2 FY21 Y-o-Y H1 FY22 H1 FY21 Y-o-Y FY21 Assets under management 22,559 18,526 22% 22,559 18,526 22% 20,669 Assets under finance 21,731 17,806 22% 21,731 17,806 22% 19,823 Interest income 904 779 16% 1,7
Slide 29: Financial statement summary Bajaj Finance Limited
Financial statement summary Bajaj Finance Limited Values in MM USD 1 = 74 INR Financials snapshot Q2 FY22 Q2 FY21 Y-o-Y H1 FY22 H1 FY21 Y-o-Y FY21 Assets under management 16,660 14,187 17% 16,660 14,187 17% 15,597 Assets under finance 16,384 13,855 18% 16,384 13,855 18% 15,282 Interest income 789 68
Slide 30: Financial statement summary Bajaj Housing Finance Ltd.
Financial statement summary Bajaj Housing Finance Ltd. Values in MM USD 1 = 74 INR Financials snapshot Q2 FY22 Q2 FY21 Y-o-Y H1 FY22 H1 FY21 Y-o-Y FY21 Assets under management 6,004 4,522 33% 6,004 4,522 33% 5,253 Assets under finance 5,288 3,946 34% 5,288 3,946 34% 4,516 Interest income 113 94 20%
Slide 31: 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 30 September Bajaj Finance Limited Asset liability management 4.4 Behaviouralized ALM as of 30 September Bajaj Housing Finance Limited 4.5 Disciplined ALM Mana
Slide 32: 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% 6.8 6.6 24.7% 25.0% 6.2 6.3 6.3 25.4% 24.9% 22.0% 25.1% 20.7% 21.3% 20.3% 5.4 5.3 19.1% 19.5% 5.1 18.0% 4.7 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% 3.7% 2.9% 3.2% 3
Slide 33: Resilient business model Consolidated
Resilient business model Consolidated 46.0% 45.0% 50.4% 44.6% 48.8% 43.1% 41.4% 41.8% 46.5% 38.1% 35.3% 33.5% 38.4% 36.0% 30.7% 30.6% 33.3% 35.4% 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% 4.1% 3.6% 3.3% 3.5% 3.7% 3.9% 4.1% 4.1% 3.1% 3.8% 2.7% Mar'13 Ma
Slide 34: Behaviouralized ALM as of 30 September 2021 BFL
Behaviouralized ALM as of 30 September 2021 BFL Values in MM USD 1 = 74 INR 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 1,391 2 1 74 214 124 120 284 124 794 3,127 Advances 887 308 351 880 867 1,906 2,934 5,739 1,969 984 16,826 Other infl
Slide 35: Behaviouralized ALM as of 30 Sept 2021 BHFL
Behaviouralized ALM as of 30 Sept 2021 BHFL Values in MM USD 1 = 74 INR 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 31 54 203 135 27 - 0 0 - - - - 450 Advances 38 31 68 104 102 291 525 1,477 945 636 571 499 5,288 Other in
Slide 36: Disciplined ALM Management
Disciplined ALM Management Cumulative gap upto 1 month Cumulative gap upto 12 months 220% 216% 192% 141% 160% 119% 120% 61% 96% 51% 80% 48% 76% 36% 71% 64% 57% 54% 50% 44% 16% 4% Sept -15% ALM mismatch for upto 1 Month and upto 1 year. From FY20 onwards, RBI has prescribed -20% ALM mismatch for upto
Slide 37: Consolidated Liability mix over last 10 years
Consolidated Liability mix over last 10 years 5% 5% 3% 4% 4% 4% 8% 10% 5% 13% 4% 3% 12% 13% 7% 6% 7% 4% 3% 7% 3% 3% 3% 3% 6% 4% 33% 38% 35% 25% 36% 35% 36% 37% 36% 40% 45% 36% 31% 30% 29% 58% 54% 48% 34% 53% 35% 25% 20% 21% 20% 17% 12% 13% 0% 1% 6% 8% 4% Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar
Slide 38: 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 38
Slide 39: Customer franchise
Customer franchise Q2 FY21 Q2 FY22 Q1 FY22 44.11 MM Total Franchise 52.80 MM 50.45 MM 34.72 MM Credit segment filter 41.68 MM 39.82 MM 33.48 MM Overall Cross sell franchise 40.12 MM 38.32 MM Non delinquent 29.63 MM customers 35.31 MM 33.15 MM Cross sell franchise 23.87 MM 29.37 MM 27.43 MM (54%)* (5
Slide 40: Geographic presence
Geographic presence 30 Jun 30 Sept 31 Dec 31 Mar 30 Jun 30 Sept Geographic Presence 2020 2020 2020 2021 2021 2021 Urban 1,049 1,134 1,210 1,298 1,368 1,368 Of which urban lending branches 1,049 1,137 1,148 1,179 1,179 Of which urban lending franchisee 73 150 189 189 Rural 1,359 1,507 1,604 1,690 1,7
Slide 41: Strong distribution reach
Strong distribution reach Active distribution 30-Sep-19 30-Sep-20 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 Consumer durable stores Urban 22,000+ 24,200+ 24,700+ 26,400+ 26,900+ 28,000+ Consumer durable stores Rural 15,200+ 19,600+ 22,500+ 24,000+ 24,000+ 25,600+ Digital product stores 23,100+ 26,400+
Slide 42: Section 06 Business segment wise AUM
Section 06 6.1 Business segment wise AUM as of 30 September - Consolidated Business segment wise AUM 6.2 Business segment wise AUM as of 30 September Mortgages 42
Slide 43: Business segment wise AUM - Consolidated
Business segment wise AUM - Consolidated Values in MM USD 1 = 74 INR Consolidated BFL as of BHFL as of Consolidated Composition as Composition as Assets Under Management as of 30 30 September 30 September as of 30 Growth of 30 September of 30 September September 2020 2021 2021 September 2021 YoY 202
Slide 44: Business segment wise AUM - Mortgages
Business segment wise AUM - Mortgages Values in MM USD 1 = 74 INR Bajaj Housing Finance Limited Mortgage All Composition as of Assets Under Management 30 Sep 2020 30 Sep 2021 Growth 30 Sep 2020 30 Sep 2021 Growth 30 Sep 2021 Home Loans 2,900 3,740 29% 3,536 4,166 18% 57% Loan against property 568 68
Slide 45: 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 45
Slide 46: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated Values in MM USD 1 = 74 INR AUM PCR GNPA % NNPA % Particulars GNPA NNPA 30 Sept 2021 (%) 31 Mar 21 30 Jun 21 30 Sept 21 31 Mar 21 30 Jun 21 30 Sept 21 Auto Finance Business 1,451 259 139 46% 9.31% 19.15% 16.00% 4.84% 12.18% 9.25% Sales Finance Business 1,697 12 2
Slide 47: ECL summary Consolidated
ECL summary Consolidated Assets categorization Stage 1 & 2 (represents standard assets) 98.66% 97.14% 98.21% 97.04% 97.55% Stage 3 (classified as NPA) 1.03% 0.55% 1.79% 2.96% 2.45% Stage 3 (not classified as NPA) 0.31% 2.32% - - - Summary of stage wise assets and provision for impairment allowance A
Slide 48: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited Asset categorization Stage 1 & 2 (represents standard assets) 99.91% 99.65% 99.65% 99.72% 99.65% Stage 3 (classified as NPA) 0.08% 0.06% 0.35% 0.28% 0.35% Stage 3 (not classified as NPA) 0.01% 0.29% Summary of stage wise assets and provision for impairment a
Slide 49: Stagewise receivables & provisioning as of 30 Sep 2021
Stagewise receivables & provisioning as of 30 Sep 2021 Values in MM USD 1 = 74 INR 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 1,144 3 215 259 19 - 31 121 1.6% 6.5% 14.3%
Slide 50: 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 Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket 1 98.60% 98.47% 98.55% 98.65% 92.10% 98.92% 99.52% 99.05% 99.58% 1 88.70% 87.63%
Slide 51: 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 98.59% 98.42% 98.35% 98.27% 93.43% 97.19% 98.50% 97.30% 98.51% 1 98.93% 98.87% 99.21% 99.3
Slide 52: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Home loans Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket 1 99.42% 99.61% 99.63% 99.60% 98.31% 98.67% 99.56% 98.31% 99.05% 2 0.27% 0.13% 0.15% 0.11% 1.40% 1.03% 0.24% 1.36% 0.69% 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% -0.2% Jun
Slide 53: Thank You
BAJAJ FINANCE LIMITED Q2 FY22 Investor Presentation Thank You
Slide 54: 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