Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q4 FY2018 Earnings Presentation
39 slides from Bajaj Finserv's earnings presentation, May 17, 2018
Slide 1: Filing letter to BSE and NSE
BAJA FINSERV 17 May 2018 To To Corporate Relations Department. Corporate Listing Department. BSE Limited National Stock Exchange of India Ltd 1st Floor, New Trading Ring, Exchange Plaza, 5" Floor Rotunda Building, P J Tower, Plot No.C-1, G Block, Dalal Street, Mumbai 400 001 Bandra-Kurla Complex, Ba
Slide 2: Investor Presentation – Q4 FY18
BAJAJ FINSERV LIMITED Investor Presentation – Q4 FY18* * Financial year 2017-18
Slide 3: Bajaj Finserv – A diversified financial services group
Bajaj Finserv – A diversified financial services group 54.99%* 74% 74% Bajaj Finance Limited Bajaj Allianz General Bajaj Allianz Life Insurance # Insurance # • Diversified NBFC present in consumer finance, SME, • Highest PAT among private • Among the top 5 private sector commercial and rural lending
Slide 4: Bajaj Finserv performance highlights
Bajaj Finserv performance highlights All Figures in Rs Million Performance Highlights of Q4 FY18 over Q4 FY17 CY 88,293 16,149 6,854 28,797 25% 38% 28% 4% PY 70,401 11,705 5,348 27,660 Total Revenue Profit before Tax PAT Net Worth (Consolidated) (Consolidated) (Consolidated) (Standalone) • Bajaj Fin
Slide 5: Consolidated profit components
Consolidated profit components All Figures in Rs Million Consolidated profit components for Q4 FY18 Intercompany adjustments Bajaj Finserv- Standalone - Others 104 Life 6,854 Insurance 6 Bajaj Finserv General - Insurance 1,266 Consolidated Bajaj Finance 1,381 4,097 Consolidated profit components for
Slide 6: FY18 Highlights
FY18 Highlights All Figures in Rs Million Highlights of Group Companies BAJAJ FINSERV FY18 FY17 Growth BAJAJ FINANCE# FY18 FY17 Growth Total Revenue 305,994 245,077 25% AUM 840,329 601,956 40% Net worth (Cons) 207,471 158,288 31% Total Income 134,659 99,922 35% PAT 27,414 22,619 21% PAT 26,741 18,36
Slide 7: Bajaj Finance Limited
Bajaj Finance Limited # # Standalone 6
Slide 8: Bajaj Finance - Overview
Bajaj Finance - Overview Business Construct Non-bank with strategy & structure of a bank with consistent track record of profitability Focused on mass affluent & above clients with strong cross sell orientation Diversified financial services strategy seeks to optimise risk and profit to delive
Slide 9: Bajaj Finance – Overview: Differentiators
Bajaj Finance – Overview DIFFERENTIATORS Part of the Bajaj Group – one A trusted brand with strong brand equity of the oldest & most respected business houses Focus on mass affluent and Overall franchise of 26.22 Mn. and Cross sell client base above customers of 15.43 Mn. Strong focus on cross s
Slide 10: Bajaj Finance's businesses
Bajaj Finance’s businesses BAJAJ FINANCE Consumer SME Commercial Rural • Largest consumer • Focused on affluent • Wholesale Lending • Unique hub-and-spoke electronics, digital SMEs with an average products covering short, model in 602 locations products & furniture annual sales of around medium and
Slide 11: Bajaj Finance has clocked healthy growth in revenues
Bajaj Finance has clocked healthy growth in revenues All Figures in Rs Million Book Size Total Income 133,292 FY18 771,250 Increase by 36% 99,890 568,341 Q4 FY18 73,334 Increase by 427,558 33% 311,994 54,182 229,710 40,744 35,572 26,697 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 Q4 FY17Q4 FY1
Slide 12: Portfolio quality continues to be good, operating costs under control
Portfolio quality continues to be good, operating costs remain under control with profitability All Figures in Rs Million Loss Provision and Net NPA% 11,000 10,302 2.0% 10,000 9,000 8,039 8,000 7,000 6,000 5,429 5,000 3,846 4,000 2,865 2,739 3,000 2,588 2,000 1,000 0.28% 0.45% 0.44% 0.38% 0 0.28% 0.
Slide 13: Bajaj Finance – Q4 highlights
Bajaj Finance – Q4 highlights All Figures in Rs Million Performance Highlights of Q4 FY18 over Q4 FY17 CY 771,250 35,572 7,210 36% 33% 61% PY 568,341 26,697 4,491 Book Size Total Income Profit After Tax CY 0.96% 4.5% • Borrowing mix is not excessively dependent on banks. (Mix of 31 : 57 : 12 between
Slide 14: Bajaj Allianz General Insurance
Bajaj Allianz General Insurance 13
Slide 15: General Insurance – Overview: Strategy
General Insurance – Overview STRATEGY Grow faster than market in chosen segments Presence across retail and commercial lines, with a focus on retail business Emphasise profitability through superior underwriting, & strong cash flow generation, in order to deliver superior Combined Ratio and Ro
Slide 16: General Insurance – Overview: Differentiators
General Insurance – Overview DIFFERENTIATORS Industry leading combined ratios over the last several years with superior ROE Strong selection of Risk Highest PAT in private sector in FY17 Trend-setter in the industry for cash-less claims. First to insource health insurance administration Disrup
Slide 17: BAGIC – Key Highlights
BAGIC – Key Highlights FY 2017-18 Industry beating GDPI growth of 23% in FY18 vs the Industry growth of 17% FY18. Market share on GDPI improved to 7.1% in FY18 versus 6.7% in FY17 Profit after tax (PAT) increased by 27% to Rs. 9,212 Mn. in FY18 Policy issuance crosses 10 Mn. mark to reach ar
Slide 18: BAGIC has maintained combined ratio below 100%
BAGIC has maintained Combined ratio, below 100% on a sustained basis Combined Ratios (Including Motor TP Pool Losses) 98.1% 96.7% 99.3% 96.8% 92.3% 92.7% 93.4% FY14 FY15 FY16 FY17 FY18 Q4 FY17 Q4 FY18 1. Combined Ratios are in accordance with the Master Circular on ‘Preparation of Financial statemen
Slide 19: Consistently delivering industry leading profitability
Consistently delivering industry leading profitability Combined Ratio : BAGIC vs Top 5 Pvt. Players 105.0% 106.0% 99.5% 102.2% 98.1% 101.0% 96.7% 101.5% 99.3% 96.8% 101.7% 99.6% 99.5% 92.1% FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18 BAGIC Top 5 Private Players ROE (for the period non-annulized) 28.0%
Slide 20: Strong profit growth resulting into high efficiency of capital
Strong profit growth resulting into high efficiency of capital All Figures in Rs Million PAT CAGR of 23% between FY14 – FY18 PAT FY18 Increase by 27% 9,212 7,278 5,623 5,642 Q4 FY18 4,090 Increase by 13% 1,648 1,866 FY14 FY15 FY16 FY17 FY18 Q4 FY17 Q4 FY18 No Capital infusion since FY08 BAGIC – Net
Slide 21: BAGIC retains its position among top private insurers
BAGIC retains its position among top 2 private insurers in terms of Gross Premium Industry GDPI Trends FY18 growth 17% Q4 FY18 growth 17% (Ex Specialized) 1,332 1,140 874 Rs. Billion 776 538 654 706 397 320 351 369 314 153 180 386 425 477 602 678 161 189 FY14 FY15 FY16 FY17 FY18 Q4 FY17 Q4 FY18 PSU
Slide 22: BAGIC has a balanced business mix
BAGIC has a balanced business mix Business Mix 9% 9% 10% 9% 8% 8% 7% 8% 6% 18% 19% 20% 21% 21% 16% 16% 9% 6% 6% 13% 14% 14% 14% 5% 6% 6% 7% 9% 5% 9% 6% 6% 5% 7% 59% 55% 56% 46% 44% 46% 42% FY14 FY15 FY16 FY17 FY18 Q4 FY17 Q4 FY18 Motor (Retail) Health (Retail) Group Health Prop, Liability, Engg Agri
Slide 23: BAGIC's AUM continues to grow
BAGIC’s AUM continues to grow AUM(cash and investments) - Rs Billion (as of end of period) 148 FY18 Increase by 37% BAGIC 108 continues to grow its AUM 92 strongly 79 70 Investments are largely in fixed income securities FY14 FY15 FY16 FY17 FY18 22
Slide 24: Bajaj Allianz General – Q4 highlights
Bajaj Allianz General – Q4 highlights All Figures in Rs Million Performance Highlights of Q4 FY18 over Q4 FY17 CY 27,641 19,553 16,499 1,866 22% 27% 27% 13% PY 22,595 15,384 13,000 1,648 Gross Written Net Written Premium Net Earned Premium Profit After Tax Premium Ex Crop GWP was Rs. 21,838 Mn in
Slide 25: Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance 24
Slide 26: Life Insurance - Overview: Strategy
Life Insurance - Overview STRATEGY Grow regular premium Diversified distribution channels with an emphasis on individual agents Maintain a balanced product mix Maintain leadership amongst private companies in the financial inclusion segment 25
Slide 27: Life Insurance - Overview: Differentiators
Life Insurance - Overview DIFFERENTIATORS Large Proprietary Agency Large pan proprietary agency force Wide distribution reach of offices and agents Force Lean support structure In terms of lives covered in group schemes, BALIC leads Financial Inclusion the private sector, with about 34% shar
Slide 28: BALIC – Key Highlights
BALIC – Key Highlights FY 2017-18 Industry beating Individual Rated Premium growth for FY18 at 38% to reach Rs.13,972 Mn. vs Industry growth of 19% in FY18 Total New Business (NB) premium for FY18 grew at 29% to reach Rs. 42,911 Mn. in a subdued industry which grew at 11% in FY18 BALIC’s Indiv
Slide 29: Strong growth in Individual Rated premiums
Strong growth in Individual Rated premiums All Figures in Rs Million Individual Rated NB Agency Individual Rated NB FY18 Increase by 38% FY18 Increase by 31% Q4 FY18 Increase 13,972 Q4 FY18 Increase by 23% 11,065 by 16% 10,101 8,476 3,865 4,742 3,076 3,558 FY17 FY18 Q4 FY17 Q4 FY18 FY17 FY18 Q4 FY17
Slide 30: Productivity has improved strongly
Productivity has improved strongly All Figures in Rs. Individual Regular Premium Ticket Individual Regular Premium Ticket Size Size (Agency) FY18 Increase by 45,449 62,858 FY18 Increase by 23% 25% 37,062 50,165 28,177 29,142 FY16 FY17 FY18 FY16 FY17 FY18 Focus on Individual Premium Business from mas
Slide 31: Efforts to improve Persistency paying off
Efforts to improve Persistency paying off Persistency 13th Month Persistency 25th Month 77% 58% 63% 68% 51% 51% Persistency - 13th Month Persistency - 25th Month FY16 FY17 FY18 FY16 FY17 FY18 Persistency 37th Month 49% 42% 44% Persistency - 37th Month FY16 FY17 FY18 30
Slide 32: Diversified product mix with greater mix of traditional business
Diversified product mix with greater mix of traditional business Individual Rated NB Product Mix (Annual) Individual Rated NB Product Mix (Quarterly) 5% 5% 7% 5% 4% 21% 27% 25% 24% 42% 70% 72% 74% 68% 51% FY16 FY17 FY18 Q4 FY17 Q4 FY18 Individual - Unit Linked Individual - Par Individual - Non Par I
Slide 33: Assets Under Management are significant
Assets Under Management are significant AUM as of end of period in Rs Billion AUM FY18 Increase by 5% 520 493 436 441 388 FY14 FY15 FY16 FY17 FY18 AUM (Mix) 306 279 249 213 216 219 214 214 175 192 FY14 FY15 FY16 FY17 FY18 Unit Linked Other than Unit Linked Of the UL Funds of Rs 214 Billion, 61% is e
Slide 34: BALIC is amongst the most capital efficient private insurers
BALIC is amongst the most capital efficient private insurers All Figures in Rs Million PAT Includes net transfer from Policyholders’ account to P&L – 10,246 8,762 8,790 8,363 • Rs. 644 Mn in Q4 FY18 (Q4 FY17 7,161 Rs. 687 Mn) 1,982 1,712 • Rs.1,921 Mn FY18 (FY17 Rs.2,271 Mn) FY14 FY15 FY16 FY17 FY18
Slide 35: Bajaj Allianz Life – Q4 highlights
Bajaj Allianz Life – Q4 highlights All Figures in Rs. Million Performance Highlights of Q4 FY18 over Q4 FY17 CY 4,742 9,002 12,760 26,700 23% 19% 17% 19% PY 3,865 7,545 10,868 22,478 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 1,712 519,701 592% Solvency Ratio as on -14% 31
Slide 36: MCEV Update
MCEV Update All Figures in Rs. Million Parameter FY 17 FY 18 Annualized Premium** (ANP) 12,876 17,820 New Business Value* (NBV) 1,671 2,223 Implied Margins on ANP 12.98% 12.47% Embedded Value++ (EV) 112,651 118,583 • One-year forward rates derived from the risk free yield curve are used for discount
Slide 37: MCEV Movement
MCEV Movement Figures in Rs Million 3,347 627 2,223 2,402 1,108 7,724 118,583 112,651 As at 31st Unwinding Investment Operational Assumption NBV at POS Expense As at 31st March 2017 Variance Variance Change Overrun March 2018 Par Business Overruns are considered at 10% of Overrun; FY2018 Rs. 2,402 M
Slide 38: 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 39: Thank You
BAJAJ FINSERV Thank You 38