Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q4 FY22 Earnings Presentation
67 slides from Bajaj Finance's earnings presentation, Apr 26, 2022
Slide 1: Bajaj Finance Limited – Exchange Filing Cover Letter
BAJAJ FINANCE LIMITED 26 April 2022 THE MANAGER, THE MANAGER, BSE LIMITED LISTING DEPARTMENT DCS - CRD NATIONAL STOCK EXCHANGE OF INDIA PHIROZE JEEJEEBHOY TOWERS LTD. EXCHANGE PLAZA, C-1. BLOCK G, DALAL STREET, BANDRA - KURLA COMPLEX, BANDRA MUMBAI - 400 001 (EAST) MUMBAI - 400 051 SCRIP CODE: 50003
Slide 2: Q4 FY22 Investor Presentation
Q4 FY22 Investor Presentation 26 April 2022
Slide 3: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive Financial Customer franchise Update on summary – Q4 performance – Q4 and distribution credit quality FY22 3 FY22 31 reach 42 48 Section 02 Section 04 Section 06 Bajaj Finance Asset liability Business segment wise Limited overvie
Slide 4: Section 01: Executive summary – Q4 FY22
1.1 Quarter gone by 1.2 Lead financial indicators Section 01 Executive summary – Q4 FY22 1.3 Business Transformation Update 1.4 Consolidated financial performance – FY22 3
Slide 5: Quarter gone by
Quarter gone by An excellent quarter for the Company across balance sheet growth, portfolio quality and profitability. Omnipresence agenda continued to accelerate in Q4. Overall, excited about FY23 prospects. Core AUM Opex to NII PAT ROE* Net NPA ₹ 1,92,087 34.6% ₹ 2,420 Cr 5.7% 0.68% Q4 FY22 Cr Q4
Slide 6: Lead financial indicators
Lead financial indicators 1. Strong Core AUM growth* of ₹ 10,837 crore in Q4. In Q4, AUM growth was secular across all lines of businesses. In FY22, the Company added ₹ 39,305 crore of core AUM. 2. AUM as of 31 March 2022 was up 29% at ₹ 1,97,452 crore as against ₹ 1,52,947 crore as of 31 March 2021
Slide 7: Lead financial indicators
Lead financial indicators 10. Deposits book grew by 19% YOY to ₹ 30,800 crore as of 31 March 2022. Its contribution to consolidated borrowings stood at 19% as of 31 March 2022. The Company has created a deposits V2 plan to grow deposits book significantly over the next 3 years. 11. In Q4, Opex to NI
Slide 8: Lead financial indicators
Lead financial indicators 18. On portfolio credit quality, 10 portfolios are green and 1 is yellow (two and three-wheeler). 19. Consolidated post tax profit grew by 80% to ₹ 2,420 crore in Q4 FY22 as compared to ₹ 1,347 crore in Q4 FY21. 20. Capital adequacy remained strong at 27.22% as of 31 March
Slide 9: Lead financial indicators
Lead financial indicators 28. In Q4, BHFL delivered post tax profit of ₹ 198 crore as against ₹ 179 crore in Q4 FY21, a growth of 11%. 29. Capital adequacy of BHFL was 19.72% as of 31 March 2022. On 7 April 2022, BFL infused capital of ₹ 2,500 crore in BHFL to support its capital needs for next 24 m
Slide 10: Business Transformation update
Business Transformation update
Slide 11: Omnipresence strategy update
Omnipresence strategy update In FY23, Omnipresence strategy will expand from geography and digital app platform to also include creation of a digital web platform. 1. Web remains an extremely important driver of traffic, volumes and service to customers in the digital space. As part of its Omnichann
Slide 12: Omnipresence strategy update
Omnipresence strategy update Digital app platform 5. Insurance marketplace went live in March 2022 offering 4 motor insurance products, 9 health insurance products, 8 asset insurance products and 345 pocket insurance products. Its key features include compare, review, buy policies, service section i
Slide 13: Omnipresence strategy update
Omnipresence strategy update 11. In Q4, the Company booked 455K new EMI card customers digitally. Cards In Force (CIF) of EMI cards acquired digitally now stands at 1.8 MM. In Q4, this CIF delivered 234K loans. 12. In Q4, EMI store visits were 36.9 MM as against 44.7 MM in Q3 FY22 which had festival
Slide 14: Omnipresence strategy update
Omnipresence strategy update 19. In Q4, the Company added 1.7 MM wallets as against 2.5 MM in Q3 FY22. The Company has 6.5 MM customers on its wallet as of 31 March 2022. In Q4, ~ 1 MM transactions were done by these customers. In FY23, as a result of rewards management system launch, all cashback p
Slide 15: Consolidated financial performance - FY22
Consolidated financial performance - FY22
Slide 16: Executive summary FY22 - Consolidated
Executive summary FY22 - Consolidated Balance Sheet and Franchise: 1. New loans booked increased by 46% to 24.68 MM as of 31 March 2022 as against 16.88 MM as of 31 March 2021. 2. Customer franchise increased by 19% to 57.57 MM as of 31 March 2022 as against 48.57 MM as of 31 March 2021. Operating E
Slide 17: Executive summary FY22 - Consolidated
Executive summary FY22 - Consolidated 8. The Board of Directors has recommended a dividend of ₹ 20 per equity share of the face value of ₹ 2 (1000%) for FY22. This amounts to 19.07% of the Company’s standalone profit for FY22 and is in line with the Company’s dividend distribution policy. 9. ROA for
Slide 18: 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 Our shareholder profile overview 2.5 2.6 15-years financial snapshot 2.7 Product suite 2.8 Executive summa
Slide 19: Bajaj group structure
Bajaj group structure Bajaj Holdings & Investment Ltd (BHIL) (Listed) 1 2 39.16% 33.43% Bajaj Auto Ltd Bajaj Finserv Ltd 2 (Listed) (Listed) Auto business arm Financial services arm 80.13% 100% 74% 74% 52.49% 3 Bajaj Finance Ltd Bajaj Allianz Life Bajaj Allianz Bajaj Finserv Direct Bajaj Finserv Hea
Slide 20: What do we stand for
What do we stand for “Non-bank with strategy & structure of a bank” “Focused on mass affluent & above clients with a strategy to cross sell” “Diversified financial services strategy with an optimal mix of risk and profit to deliver a sustainable business model” “Business construct to deliver a susta
Slide 21: General long-term guidance on financial metrics
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% 20
Slide 22: 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 57.57 MM Centre of Excellence for each business vertical to bring Strong focus on c
Slide 23: Our shareholder profile
Our shareholder profile Top 20 investors & their holdings As on 31 As on 31 As on 31 S.No Name of Shareholder Mar 22 Dec 21 Mar 21 1 BAJAJ FINSERV LTD 52.49% 52.65% 52.74% 2 GOVERNMENT OF SINGAPORE 3.19% 3.13% 4.20% FII & FPI 3 MAHARASHTRA SCOOTERS LIMITED 3.13% 3.14% 3.15% AXIS MUTUAL FUND TRUSTEE
Slide 24: 15-years financial snapshot
15-years financial snapshot ₹ in crore CAGR Financials snapshot @ FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 (15 yrs.) AUM 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 1,47,153 152,947 1,97,452 37% Income from operations 503 599 91
Slide 25: Product suite
Product suite BAJAJ FINANCE LIMITED Partnerships Consumer SME Commercial Rural Deposits Payments & Services 1. Consumer Durable Loans 1. Unsecured 1. Loan against securities 1. Consumer Durable 1. Retail Term 1. PPI 1. Life Insurance Working Capital Loans Deposits 2. UPI Distribution 2. Digital Prod
Slide 26: Executive summary – Consolidated
Executive summary – Consolidated Overview • 35-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
Slide 27: 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 sel
Slide 28: 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 • Focused on accelerating used car financing business (average ticket size of ~ ₹ 7 lakhs) • Focused on
Slide 29: Executive summary – Bajaj Housing Finance Ltd.
Executive summary – Bajaj Housing Finance Ltd. Bajaj Housing • A 100% subsidiary of Bajaj Finance Limited, registered with National Housing Bank as a Housing Finance Company Finance • Independent organization design having all dedicated functions and units to drive domain expertise, scalability and
Slide 30: Executive summary – Bajaj Housing Finance Ltd.
Executive summary – Bajaj Housing Finance Ltd. Lease Rental • Offers loan against lease rentals to high-net-worth individuals and developers on commercial property leased mainly to Discounting corporate tenants • Offers construction finance for commercial properties to existing LRD customers • All l
Slide 31: Executive summary – BFSL
Executive summary – BFSL 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 Funds • Offers Capital Mar
Slide 32: Section 03: Financial performance
Financial statement summary – 3.1 Consolidated Section 03 Financial statement summary – Financial performance 3.2 Bajaj Finance Limited Financial statement summary – 3.3 Bajaj Housing Finance Limited 31
Slide 33: Financial statement summary – Consolidated
Financial statement summary – Consolidated ₹ in Crore Financials snapshot Q4 FY22 Q4 FY21 Y-o-Y FY22 FY21 Y-o-Y Assets under management 197,452 152,947 29% 197,452 152,947 29% Assets under finance 191,423 146,687 30% 191,423 146,687 30% Interest income 7,366 6,034 22% 27,270 23,304 17% Fee and other
Slide 34: Financial statement summary – Bajaj Finance Ltd.
Financial statement summary – Bajaj Finance Ltd. ₹ in Crore Financials snapshot Q4 FY22 Q4 FY21 Y-o-Y FY22 FY21 Y-o-Y Assets under management 1,46,743 1,15,418 27% 1,46,743 1,15,418 27% Assets under finance 1,44,276 1,13,090 28% 1,44,276 1,13,090 28% Interest income 6,381 5,288 21% 23,729 20,419 16%
Slide 35: Financial statement summary – BHFL
Financial statement summary – BHFL ₹ in Crore Financials snapshot Q4 FY22 Q4 FY21 YoY FY22 FY21 YoY Assets under management 53,322 38,871 37% 53,322 38,871 37% Assets under finance 46,482 33,419 39% 46,482 33,419 39% Interest income 961 743 29% 3,482 2,877 21% Fee and other income 81 88 (8%) 226 218
Slide 36: Section 04: Asset liability management
4.1 Conservative leverage standards – Bajaj Finance Limited 4.2 Resilient business model – Consolidated Section 04 Behaviouralized ALM – Bajaj Finance 4.3 Limited Asset liability management Behaviouralized ALM – Bajaj Housing 4.4 Finance Limited 4.5 Disciplined ALM Management – Bajaj Finance Limited
Slide 37: 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 6.8 28.34% 28.56% 6.6 27.70% 6.3 26.96% 27.22% 6.2 6.3 25.0% 25.10% 25.40% 24.90% 24.7% 24.44% 24.75% 5.4 5.1 20.7% 4.8 4.8 4.9 * 20.3% 21.3% 4.7 4.6 19.5% 19.7% 19.1% 18.0% 16.2% 16.1% 16.3% 14.2% 14.6% 5.7% 5.0% 4.4% 3.8%
Slide 38: Resilient business model – Consolidated
Resilient business model – Consolidated 46.0% 45.0% 43.1% 48.8% 41.8% 46.5% 47.5% 41.4% 42.3% 38.1% 35.3% 33.5% 35.6% 38.4% 35.4% 34.7% 36.0% 30.7% 34.6% 33.3% 27.8% 29.9% 28.4% 27.2% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 7.84% 7.11% 6.77% 6.72% 6.71% 3.6% 3.3% 3.5% 3.7% 3.9% 4.1% 4.1% 3.1% 5.1%
Slide 39: Behaviouralized ALM as of 31 March 2022 – BFL
Behaviouralized ALM as of 31 March 2022 – BFL ₹ in Crore 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 641 1,266 1,704 1,112 205 4,948 3 2,387 641 8,863 21,771 Advances 10,145 1,593 4,031 6,773 6,632 16,296 24,253 46,580 18,731 12,652 1,47
Slide 40: Behaviouralized ALM as of 31 March 2022 – BHFL
Behaviouralized ALM as of 31 March 2022 – BHFL ₹ in Crore 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 687 451 - - - 518 - - - - - - 1,655 Advances 467 325 419 932 891 2,653 4,469 12,851 8,146 5,570 5,118 4,641 46,482 Othe
Slide 41: Disciplined ALM Management - BFL
Disciplined ALM Management - BFL Cumulative gap upto 1 month Cumulative gap upto 12 month 220% 216% 192% 178% 160% 141% 119% 120% 96% 61% 80% 76% 71% 51% 48% 64% 57% 54% 50% 31% 44% 38% 32% 4% Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Mar'20 Mar'21 Jun'21 Sept'21 Dec'21 Mar'22 40
Slide 42: Consolidated Liability mix over last 10 years
Consolidated Liability mix over last 10 years 0% 0% 3% 0% 0% 5% 0% 0% 0% 4% 5% 5% 4% 4% 8% 5% 4% 3% 10% 8% 8% 3% 8% 13% 4% 6% 4% 7% 7% 4% 6% 5% 4% 7% 4% 3% 2% 2% 3% 33% 38% 35% 25% 38% 38% 37% 40% 37% 38% 40% 40% 43% 30% 22% 20% 29% 29% 28% 54% 34% 58% 48% 53% 31% 35% 26% 28% 21% 20% 20% 19% 12% 15%
Slide 43: Section 05: Customer franchise and distribution reach
5.1 Customer franchise Section 05 Geographic presence Customer franchise and 5.2 distribution reach 5.3 Strong distribution reach 42
Slide 44: Customer franchise
Customer franchise Q4 FY21 Q4 FY22 Q3 FY22 48.57 MM 57.57 MM 55.36 MM 38.50 MM 45.21 MM 43.45 MM 37.10 MM 43.62 MM 41.87 MM 32.63 MM 38.60 MM 37.23 MM 26.89 MM 32.77 MM 31.26 MM (55.3%)* (56.9%)* (56.5%)* Customer Franchise addition Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 2.19 MM 2.26 MM 1.8
Slide 45: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 31 Dec 31 Mar Geographic Presence 2018 2019 2020 2021 2021 2022 Urban lending branches 730 927 1,035 1,298 1,368 1,368 Rural lending branches 602 903 1,357 1,690 2,055 2,136 Total Bajaj Finance presence 1,332 1,830 2,392 2,988 3,423 3,504 Map not to sc
Slide 46: Strong distribution reach
Strong distribution reach Active distribution 31 Mar 2018 31 Mar 2019 31 Mar 2020 31 Mar 2021 31 Dec 2021 31 Mar 2022 Consumer durable stores – Urban 15,500+ 20,400+ 24,200+ 26,400+ 29,500+ 30,600+ Consumer durable stores – Rural 8,200+ 14,500+ 19,600+ 24,000+ 27,900+ 29,800+ Digital product stores
Slide 47: Section 06: Business segment wise AUM
Section 06 Business segment wise AUM 46
Slide 48: Business segment wise AUM - Consolidated
Business segment wise AUM - Consolidated ₹ in Crore Consolidated BHFL as of Consolidated Composition as Composition BFL as of Growth Assets Under Management as of 31 March as of of as of 31 March 2022 YoY 31 March 2021 2022 31 March 2022 31 March 2021 31 March 2022 Auto Finance Business 12,112 10,19
Slide 49: Section 07: Update on credit quality
7.1 Provisioning Coverage - Consolidated 7.2 ECL summary – Consolidated Section 07 7.3 ECL summary – Bajaj Housing Finance Update on credit quality Limited 7.4 Stagewise ECL provisioning 7.5 Portfolio credit quality - Consolidated 48
Slide 50: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated ₹ in Crore AUM PCR GNPA % NNPA % Particulars 31 Mar 22 GNPA NNPA (%) 30 Sep 21 31 Dec 21 31 Mar 22 30 Sep 21 31 Dec 21 31 Mar 22 Auto Finance Business 10,194 1,238 620 50% 16.00% 11.04% 11.01% 9.25% 5.84% 5.83% Sales Finance Business 14,977 432 200 54% 0.64% 0.30
Slide 51: ECL summary – Consolidated
ECL summary – Consolidated Asset categorization 31 Mar 2021 30 Jun 2021 30 Sep 2021 31 Dec 2021 31 Mar 2022 Stage 1 & 2 (represents standard assets) 98.21% 97.04% 97.55% 98.27% 98.40% Stage 3 (classified as NPA) 1.79% 2.96% 2.45% 1.73% 1.60% Stage 3 (not classified as NPA) - - - - - Summary of stage
Slide 52: ECL summary – Bajaj Housing Finance Limited
ECL summary – Bajaj Housing Finance Limited Asset categorization 31 Mar 2021 30 Jun 2021 30 Sep 2021 31 Dec 2021 31 Mar 2022 Stage 1 & 2 (represents standard assets) 99.65% 99.72% 99.65% 99.65% 99.69% Stage 3 (represents GNPA) 0.35% 0.28% 0.35% 0.35% 0.31% Summary of stage wise assets and provision
Slide 53: Stagewise ECL provisioning as of 31 March 2022
Stagewise ECL provisioning as of 31 March 2022 ₹ in crore 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 8,825 - 1,187 1,238 141 - 297 619 1.6% - 25.0% 50.0% Sales Finance B
Slide 54: 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 98.55% 98.65% 92.10% 98.92% 99.52% 99.05% 99.58% 99.72% 97.89% 1 85.81% 86.00
Slide 55: 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 98.35% 98.27% 93.43% 97.19% 98.50% 97.30% 98.51% 98.73% 98.93% 1 99.21% 99.33% 92.84% 99
Slide 56: Portfolio credit quality – Consolidated
Portfolio credit quality – Consolidated Home loans Commercial lending Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket • Commercial lending business portfolio is 99.82% current. There 1 99.63% 99.60% 98.31% 98.67% 99.56% 98.31% 99.05% 99.07% 99.45% are two NPA accounts of ₹ 44
Slide 57: Thank You
BAJA) FINANCE LIMITED BAJA) FINANCE LIMITED Q4 FY22 Investor Presentation Thank You
Slide 58: Annexure
BAJA) FINANCE LIMITED Annexure
Slide 59: Purpose of business transformation
BAJA) FINANCE LIMITED As a Company, we believe that the purpose of any business transformation is a means to an end. It should result in stronger growth momentum, superior customer experience, better cross sell, lower risk and/or improved operating efficiencies. We are pursuing business transformati
Slide 60: Business transformation takes time, team and technology
At the outset, “All business transformation takes time, team and technology.” It’s been 15 months since we started phase 1 of business transformation project. Due to wave 2, it got delayed by 3 months. Phase 1 of the digital platform has now gone live with a staggered release methodology. The Compan
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Slide 63: Phase 1 and Phase 2 of transformation journey
Previous 2 slides have covered the phase 1 of transformation journey. Phase 1 was focused on creating a strong, stable and scalable foundation. Phase 2 will focus on new to Bajaj customer journeys, introducing new features and functionalities, augmenting current feature sets and nuanced journeys for
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Slide 66: Phase 2 delivery timeline
BAJA) FINANCE LIMITED The Company plans to deliver Phase 2 in 8 to 9 months subject to no major disruption as a result of current & new Covid waves. Unlike phase 1, phase 2 will get delivered in 3- 4 sprints. The first update on phase 2 will be provided in July quarter results. During this period, t
Slide 67: Disclaimer
Disclaimer BAJA) FINANCE LIMITED 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 “Bajaj Finance”. By accessing this presentation, you are agreeing to be bound by the trailing restrictions.