Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q3 FY21 Earnings Presentation
53 slides from Bajaj Finance's earnings presentation, Jan 20, 2021
Slide 1: Bajaj Finance Limited Q3 FY21 Investor Presentation
Bajaj Finance Limited Q3 FY21 Investor Presentation 20 January 2021
Slide 2: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary Financial performance Customer franchise and Update on Q3 FY21 Q3 FY21 distribution reach credit quality 3 25 36 43 Section 02 Section 04 Section 06 Bajaj Finance Limited Asset liability Business segment wise overview ma
Slide 3: Section 01 Executive summary Q3 FY21
1.1 Quarter gone by Section 01 Executive summary Q3 FY21 1.2 Executive summary on Q3 FY21 3
Slide 4: Quarter gone by
Quarter gone by USD 1 = 74 A quarter marked by granular business recovery, significant improvement in risk metrics, tracking implementation of business transformation plan and putting into motion a plan for pre-COVID growth and financial performance from Q1 FY22. AUM Opex to NII PAT ROE Net NPA* $ 1
Slide 5: Executive summary Q3 FY21
Executive summary Q3 FY21 Balance Sheet and Franchise: USD 1 = 74 1. Q3 AUM was at $ 19,399 MM as against $ 19,607 MM last year. Core AUM growth in Q3 FY21 was approximately $ 1,081 MM (adjusted for IPO receivable of $ 133 MM and higher ECL of $ 70 MM) as compared to $ 1,292 MM in Q3 FY20. The Compa
Slide 6: Executive summary Q3 FY21
Executive summary Q3 FY21 NIM Metrics USD 1 = 74 11. Margin profile in all lines of businesses was steady at pre-COVID levels other than mortgages. 12. Net Interest Income (NII) for Q3 FY21 was $ 581 MM as against $ 613 MM in Q3 FY20. NII for the quarter was lower by $ 32 MM compare to Q3 FY20. This
Slide 7: Executive summary Q3 FY21
Executive summary Q3 FY21 USD 1 = 74 Operating expense management 17. Operating expenses for Q3 FY21 were $ 188 MM, lower by 9% YoY despite $ 8 MM increase in recovery costs. It was lower due to marginally lower business volumes and the measures taken to reduce operating expenses. Some of the opex m
Slide 8: Executive summary Q3 FY21
Executive summary Q3 FY21 USD 1 = 74 23. The Company last provided an update on its credit cost scenario model as part of Q2 earnings call. It expected the residual loan loss and provision in second half at $ 351-392 MM with a downward bias. Post $ 183 MM of provisioning in current quarter, the Comp
Slide 9: Executive summary Q3 FY21
Executive summary Q3 FY21 Capital 28. The Company continues to remain very well capitalized with CRAR of 28.18% as of 31 Dec 2020. Tier-1 capital was 24.73%. The Company has adequate capital to meet its next 3 years growth aspiration. Update on Business transformation: 29. The Company has accelerate
Slide 10: Executive summary Q3 FY21
Executive summary Q3 FY21 35. The Company also plans to partner with 25+ adjunct app ecosystem which have relevant product/services for its customers. These 36. fully delivered will drive significant velocity gains, reduction in operating costs and significant improvement in customer experience. Cus
Slide 11: Executive summary Q3 FY21
Executive summary Q3 FY21 Subsidiaries USD 1 = 74 42. Bajaj Housing Finance Ltd (BHFL) profit after tax contracted by 24% to $ 13 MM in Q3 FY21 against $ 18 MM in Q3 FY20 due to higher provisioning. 43. AUM increased by 18% to $ 4,796 MM as of 31 Dec 2020 from $ 4059 MM as of 31 Dec 2019. 44. 45. 46
Slide 12: Section 02 Bajaj Finance Limited overview
2.1 Bajaj group structure 2.2 What do we stand for Section 02 2.3 Our shareholder profile Bajaj Finance Limited overview 2.4 10-year financial snapshot 2.5 Product suite 2.6 Executive summary 12
Slide 13: 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% 52.74% 3 Bajaj Finance Limited Bajaj Allianz Life Bajaj Allianz General (Listed) Insurance Company L
Slide 14: What do we stand for
What do we stand for - a sustainable ROA of 3.3-3.5% and ROE of 19-21% in the long term 14
Slide 15: 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% 3.3%-3.5% 19%-21% 15
Slide 16: 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 46.31 MM Strong focus on cross selling assets, payments, Centre of Excellence for eac
Slide 17: Our shareholder profile
Our shareholder profile Top 20 investors & their holdings As on 31 As on 30 As on 31 MF S.No Name of Shareholder Dec 20 Sep 20 Dec 19 6.25% 1 BAJAJ FINSERV LTD 52.74% 52.74% 52.82% Others 2 GOVERNMENT OF SINGAPORE 4.28% 4.20% 4.62% 3 MAHARASHTRA SCOOTERS LIMITED 3.15% 3.15% 3.15% 0.87% 4 AXIS LONG T
Slide 18: 10-year financial snapshot
10-year financial snapshot Values in MM USD 1 = 74 INR FY18@ FY19 @ FY20@ YoY CAGR Financials snapshot @ FY11 FY12 FY13 FY14 FY15 FY16 FY17 (Consol.) (Consol.) (Consol.) (FY19 FY20) (10 yrs) Assets under management 1,023 1,771 2,367 3,251 4,380 5,977 8,135 11,138 15,661 19,886 27% 39% Income from op
Slide 19: Product suite
Product suite BAJAJ 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 (E) Capital Loans (E) 2. IPO financing Loans Depo
Slide 20: Executive summary Consolidated
Executive summary Consolidated USD 1 = 74 Overview • 33-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
Slide 21: Executive summary Bajaj Finance Limited
Executive summary Bajaj Finance Limited USD 1 = 74 Overview • 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 operating leverage • Fo
Slide 22: Executive summary Bajaj Finance Limited
Executive summary Bajaj Finance Limited USD 1 = 74 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 2.3 MM) wit
Slide 23: Executive summary Bajaj Housing Finance Limited
Executive summary Bajaj Housing Finance Limited USD 1 = 74 Bajaj Housing • A 100% subsidiary of Bajaj Finance Limited, registered with National Housing Bank as a Housing Finance Company Finance Limited • Offers full range of mortgage products such as home loans, loan against property and lease renta
Slide 24: Executive summary Bajaj Housing Finance Limited
Executive summary Bajaj Housing Finance Limited USD 1 = 74 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 esc
Slide 25: Section 03 Financial performance Q3 FY21
Financial statement summary 3.1 Consolidated Section 03 Financial statement summary Financial performance 3.2 Bajaj Finance Limited Q3 FY21 3.3 Financial statement summary Bajaj Housing Finance Limited 25
Slide 26: Financial statement summary Consolidated
Financial statement summary Consolidated Values in MM USD 1 = 74 Financials snapshot Q3 FY21 Q3 FY20 Y-o-Y 9M FY21 9M FY20 Y-o-Y FY20 Assets under management 19,399 19,607 (1%) 19,399 19,607 (1%) 19,886 Assets under finance 18,638 18,860 (1%) 18,638 18,860 (1%) 19,105 Interest income 773 825 (6%) 2,
Slide 27: Financial statement summary Bajaj Finance Limited
Financial statement summary Bajaj Finance Limited Values in MM USD 1 = 74 Financials snapshot Q3 FY21 Q3 FY20 Y-o-Y 9M FY21 9M FY20 Y-o-Y FY20 Assets under management 14,811 15,738 (6%) 14,811 15,738 (6%) 15,689 Assets under finance 14,467 15,351 (6%) 14,467 15,351 (6%) 15,327 Interest income 672 74
Slide 28: Financial statement summary Bajaj Housing Finance Limited
Financial statement summary Bajaj Housing Finance Limited Values in MM USD 1 = 74 Financials snapshot Q3 FY21 Q3 FY20 YoY 9M FY21 9M FY20 YoY FY20 Assets under management 4,796 4,059 18% 4,796 4,059 18% 4,420 Assets under finance 4,158 3,508 19% 4,158 3,508 19% 3,780 Interest income 101 84 20% 288 2
Slide 29: Section 04 Asset liability management
4.1 Conservative leverage standards Bajaj Finance Limited 4.2 Resilient business model Consolidated Behaviouralized ALM as of 31 Dec Section 04 4.3 Bajaj Finance Limited Asset liability management 4.4 Behaviouralized ALM as of 31 Dec Bajaj Housing Finance Limited 4.5 Disciplined ALM Management Bajaj
Slide 30: Conservative leverage standards Bajaj Finance Limited
Conservative leverage standards Bajaj Finance Limited 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 28.2% 26.4% 26.6% 6.8 24.7% 25.0% 6.6 6.4 6.3 6.3 22.0% 6.2 24.7% 22.6% 23.0% 5.3 20.3% 5.4 21.3% 20.7% 19.1% 19.5% 19.7% 5.1 17.5% 18.7% 18.0% 4.7 4.7 4.6* 16.2% 16.1% 16.3% 15.0% 14.6% 14.2% 5.7%
Slide 31: Resilient business model Consolidated
Resilient business model Consolidated 47.0% 46.0% 44.6% 45.0% 43.7% 44.0% 43.8% 43.1% 41.4% 41.8% 38.4% 36.0% 35.3% 35.4% 32.9% 33.3% 32.3% 29.9% 33.5% 28.4% 27.9% 27.8% 27.2% 26.4% 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 8.17% 8.02% 7.78% 4.2% 4.1% 3.6% 3.5% 3.7% 3.9% 4.1% 4.1% 3.3% 2
Slide 32: Behaviouralized ALM as of 31 Dec 2020 BFL
Behaviouralized ALM as of 31 Dec 2020 BFL * As per previous GAAP Values in MM USD 1 = 74 Particulars 1-7D 8 - 14 D 15 - 30 D >1-2M >2-3M > 3 - 6 M > 6M - 1Y > 1 - 3Y >3- 5Y >5Y Total Cash & Investments 1663 0 15 0 0 94 144 232 0 754 2903 Advances 476 171 312 721 674 1566 2597 4978 2482 900 14875 Oth
Slide 33: Behaviouralized ALM as of 31 Dec 2020 BHFL
Behaviouralized ALM as of 31 Dec 2020 BHFL * As per previous GAAP Values in MM USD 1 = 74 Particulars 1 -7 D 7-14 D 15-30 D >1 - 2 M >2 - 3 M >3 - 6 M >6M- 1 Y >1 - 3 Y > 3 - 5 Y > 5 - 7 Y > 7- 10 Y > 10 Y Total Cash, Cash Equivalents & Investments 69 34 - - - - - - - - - - 204 Advances 45 21 38 79
Slide 34: Disciplined ALM Management Bajaj Finance Limited
Disciplined ALM Management Bajaj Finance Limited Cumulative gap upto 1 month Cumulative gap upto 12 month Permissible limit 300% 220% 182% 141% 119% 120% 75% 61% 96% 88% 48% 51% 71% 70% 73% 36% 36% 57% 54% 44% 50% 38% 16% 4% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15%
Slide 35: Liability mix over the last 9 years
Liability mix over the last 9 years Bajaj Finance Limited 5% 5% 4% 5% 5% 6% 9% 8% 10% 8% 8% 3% 13% 4% 3% 4% 6% 4% 4% 5% 3% 6% 5% 4% 3% 7% 4% 4% 33% 38% 31% 25% 35% 38% 35% 38% 35% 35% 40% 43% 30% 31% 28% 26% 54% 34% 58% 58% 48% 53% 31% 35% 21% 21% 22% 24% 12% 15% 6% 8% 0% 1% 4% 0% Mar'12 Mar'13 Mar'
Slide 36: 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 36
Slide 37: Customer franchise
Customer franchise Q3 FY20 Q3 FY21 Q2 FY21 40.38 MM Total Franchise 46.31 MM 44.11 MM 31.86 MM Credit segment filter 36.60 MM 34.72 MM 30.76 MM Overall Cross sell franchise 35.32 MM 33.48 MM Non delinquent 27.41 MM customers 30.80 MM 29.63 MM Cross sell franchise 23.48 MM 25.25 MM 23.87 MM (58%) * (
Slide 38: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 30 Sep 31 Dec Geographic Presence 2017 2018 2019 2020 2020 2020 Urban 377 730 927 1,035 1,134 1,210 Of which urban lending branches 377 730 927 1,035 1,134 1,137 Of which urban lending franchise 73 Rural 538 602 903 1,357 1,507 1,604 Of which rural len
Slide 39: Strong distribution reach
Strong distribution reach Active distribution points of sale 31 Mar 2017 31 Mar 2018 31 Mar 2019 31 Mar 2020 30 Sept 2020 31 Dec 2020 Consumer durable stores Urban 14,000+ 15,500+ 20,400+ 24,200+ 24,200+ 24,700+ Consumer durable stores Rural 5,500+ 8,200+ 14,500+ 19,600+ 19,600+ 22,500+ Digital prod
Slide 40: Section 06 Business segment wise AUM
Section 06 6.1 Business segment wise AUM as of 31 Dec - Consolidated Business segment wise AUM 6.2 Business segment wise AUM as of 31 Dec Mortgages 40
Slide 41: Business segment wise AUM as of 31 Dec 2020 Consolidated
Business segment wise AUM as of 31 Dec 2020 Consolidated Values in MM USD 1 = 74 Standalone as BHFL as of Consolidated Consolidated Composition as Assets Under Management Growth of 31 Dec 2020 31 Dec 2020 as of 31 Dec 2020 as of 31 Dec 2019 of 31 Dec 2020 Auto Finance Business 1717 - 1717 1781 -4% 9
Slide 42: Break-up of AUM as of 31 Dec 2020 - Mortgages
Break-up of AUM as of 31 Dec 2020 - Mortgages Values in MM Bajaj Housing Finance Limited Mortgage - All USD 1 = 74 Composition as Assets Under Management 31 Dec 2020 31 Dec 2019 Growth 31 Dec 2020 31 Dec 2019 Growth of 31 Dec 2020 Home Loans 3,002 2,645 14% 3,530 3,401 4% 56% Loan against property 5
Slide 43: Section 07 Update on credit quality
7.1 Provisioning Coverage - Consolidated 7.2 Provisioning Coverage Consolidated (Performa) Section 07 7.3 ECL summary Consolidated Update on credit quality ECL summary Bajaj Housing 7.4 Finance Limited 7.5 Portfolio stagewise provisioning 7.6 Portfolio credit quality - Consolidated 43
Slide 44: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated Values in MM USD 1 = 74 Consol AUM PCR GNPA % NNPA % Assets Under Management GNPA NNPA 31 Dec 2020 (%) 31 Dec 19 31 Dec 20 31 Dec 19 31 Dec 20 Auto Finance Business 1717 60 20 67% 5.68% 3.16% 2.61% 1.07% Sales Finance Business 1376 1 0 85% 0.92% 0.05% 0.18% 0.01%
Slide 45: Provisioning Coverage Consolidated (Proforma)
Provisioning Coverage Consolidated (Proforma) Values in MM USD 1 = 74 Consol AUM PCR GNPA % NNPA % Assets Under Management GNPA, NNPA 31 Dec 2020 (%) 31 Dec 19 31 Dec 20 31 Dec 19 31 Dec 20 Auto Finance Business 1717 219 109 50% 5.68% 11.54% 2.61% 6.09% Sales Finance Business 1376 36 4 88% 0.92% 1.9
Slide 46: ECL summary Consolidated
ECL summary Consolidated Values in MM USD 1 = 74 Assets categorization Stage 1 & 2 (represents standard assets) 98.39% 98.39% 98.60% 98.66% 97.14% Stage 3 (classified as NPA) 1.61% 1.61% 1.40% 1.03% 0.55% Stage 3 (not classified as NPA) - - - 0.31% 2.32% Summary of stage wise assets and provision fo
Slide 47: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited Values in MM USD 1 = 74 ECL categorization Stage 1 & 2 (represents standard assets) 99.93% 99.92% 99.92% 99.91% 99.65% Stage 3 (represents GNPA) 0.07% 0.08% 0.08% 0.08% 0.06% Stage 3 (not classified as NPA) 0.01% 0.29% Summary of stage wise assets and ECL pr
Slide 48: Portfolio stagewise provisioning Q3 FY21
Portfolio stagewise provisioning Q3 FY21 Values in MM USD 1 = 74 Gross Assets Receivable Stagewise Provision PCR % Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Auto Finance Business 1,321 356 219 16 51 110 1.2% 14.3% 50.3% Sales Finance Business 1,381 30 36 21 15 31 1.5% 5
Slide 49: 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 1 99.04% 98.90% 98.96% 98.73% 98.60% 98.47% 98.55% 98.65% 92.10% 98.92% 1 88.32% 89.68% 90.
Slide 50: 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 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 1 98.76% 98.82% 98.75% 98.59% 98.42% 98.35% 98.27% 93.43% 97.19% 1 99.44% 99.54% 99.26% 98.9
Slide 51: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Home loans 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 1 99.40% 99.54% 99.52% 99.42% 99.61% 99.63% 99.60% 98.31% 98.67% 2 0.21% 0.20% 0.22% 0.27% 0.13% 0.15% 0.11% 1.40% 1.03% 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% Sep'18 Dec'18 Mar'1
Slide 52: Thank You
BAJAJ FINANCE LIMITED Q3 FY21 Investor Presentation Thank You
Slide 53: 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