Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q3 FY20 Earnings Presentation
55 slides from Bajaj Finance's earnings presentation, Jan 29, 2020
Slide 1: Exchange filing cover letter
BAJAJ FINANCE LIMITED 29 January 2020 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: 500
Slide 2: Q3 FY20 Investor Presentation
Bajaj Finance Limited Q3 FY20 Investor Presentation 29 January 2020
Slide 3: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary Financial performance Customer Franchise and Update on Q3 FY20 Q3 FY20 distribution reach credit quality 3 21 29 35 Section 02 Section 04 Section 06 Section 08 Bajaj Finance Limited Asset liability Business segment wise
Slide 4: Executive summary Q3 FY20
Section 01 Executive summary Q3 FY20 3
Slide 5: A good quarter, despite slowing demand environment
Quarter gone by A good quarter, despite slowing demand environment, an episodic provision on a broker account and higher credit costs. Portfolio granularity strategy continued in Q3 FY20 across products and locations. Return on assets sustained its momentum due to better operating efficiencies (Opex
Slide 6: Demand environment
Demand environment Search trends on our large keyword portfolios across loan and consumption categories (electronics, mobile, furniture, apparel) reflected a significant demand slowdown in Q3. However, there is some uptick in our consumption categories since December, which has continued in January
Slide 7: Executive summary Q3 FY20
Executive summary Q3 FY20 Balance Sheet and Franchise: 1. AUM grew by 35% YoY to ₹ 1,45,092 crore as of 31 December 2019. New loans booked grew by 13% YoY to 7.67 MM. 2. AUM growth was granular for most lines of businesses in the company (YoY growth for Consumer B2B sales finance 7%, Consumer B2C 43
Slide 8: Executive summary Q3 FY20
Executive summary Q3 FY20 8. Consolidated liquidity buffer (free cash and cash equivalents) was ₹ 11,642 crore as of 31 December 2019. We remain very comfortably placed on liquidity. 9. During the quarter, the Company raised $575 MM (equivalent to ₹ 4,083 Cr) under the ECB facility agreement with va
Slide 9: Executive summary Q3 FY20
Executive summary Q3 FY20 16. Gross NPA & Net NPA stood at 1.61% and 0.70% as of 31 December 2019. Sequentially, GNPA is flat & NNPA has moved up by 5 bps. 17. From management assurance standpoint, the only portfolio that turned red in Q3 from our disclosures (Page 39) is auto finance portfolio. We
Slide 10: Bajaj Finance Limited overview
Section 02 Bajaj Finance Limited overview 9
Slide 11: Bajaj group structure
Bajaj group structure Bajaj Holdings & Investment Limited (BHIL) (Listed) *35.87% 1 @41.50% 2 Bajaj Auto Limited Bajaj Finserv Limited (Listed) (Listed) Auto business arm Financial services arm 74% 74% 52.82% 3 Bajaj Finance Limited Bajaj Allianz Life Bajaj Allianz General (Listed) Insurance Company
Slide 12: 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 a
Slide 13: 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 medium term 12
Slide 14: 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% 13
Slide 15: 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 Total customer franchise of 40.38 MM and cross sell franchise Focus on mass affluent and above clients of 23.48 MM Strong focus on cross selling assets, p
Slide 16: Our Shareholder profile
Our Shareholder profile Top 20 investors & their holdings MF As on 31 As on 30 As on 31 7.85% S.No Name of Shareholder Dec 19 Sep 19 Dec 18 Others 1 BAJAJ FINSERV LTD 52.82% 54.81% 54.99% 2 GOVERNMENT OF SINGAPORE 4.62% 3.71% 3.70% 1.63% 3 MAHARASHTRA SCOOTERS LTD. 3.15% 3.27% 3.28% 4 STEADVIEW CAPI
Slide 17: 12 year financial snapshot
12 year financial snapshot 58.1% 34.5 7.05% 12 Year CAGR : AUM 42% ; PBT 62% 6,179 26.2 50.6% 5.50% 20.1 47.0% 46.0% 44.8% 44.4% 44.6% 45.0% 16.1 3,843 12.9 43.1% 41.4% 10.1 2,818 40.2% 8.1 6.4 4.9 1,965 35.3% 3.7 2.5 2.9 2.20% 1,357 1,091 872 602 370 30 51 134 0.80% 0.63% 0.45% 0.44% 0.43% 0.19% 0.
Slide 18: Product suite
Product suite BAJAJ FINANCE LIMITED Consumer SME Commercial Rural Deposits Partnerships & Services • Consumer Durable Loans • Unsecured Working • Loan against securities • Consumer Durable • Retail Term • Life Insurance Capital Loans (E) Loans Deposits Distribution • Digital Product Loans (E) • Larg
Slide 19: 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, Rural, SME, Commercial, Mortgages and Payments • Focused on mass affluent client with a strategy to cross sell • Strong f
Slide 20: Executive summary Standalone
Executive summary Standalone 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 • Focused on cross sell, c
Slide 21: Executive summary Standalone
Executive summary Standalone 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 ₹15 to 17 crore) with established financ
Slide 22: Financial performance Q3 FY20
Section 03 Financial performance Q3 FY20 21
Slide 23: Financial statement summary Consolidated
Financial statement summary Consolidated ₹ in crore Financials snapshot Q3 FY20 Q3 FY19 Y-o-Y 9M FY20 9M FY19 Y-o-Y FY19 Assets under management 1,45,092 1,07,507 35% 1,45,092 1,07,507 35% 1,15,888 Assets under finance 1,39,561 1,04,127 34% 1,39,561 1,04,127 34% 1,12,513 Interest income 6,105 4,387
Slide 24: Asset liability management
Section 04 Asset liability management 23
Slide 25: Behaviouralized ALM snapshot as on 31 December 2019
Behaviouralized ALM snapshot as on 31 December 2019 ₹ Cr 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 8,412 1 1 4 8 1,265 696 4,061 14,449 Advances 9,562 6,819 6,254 14,344 20,610 41,192 13,409 3,849 1,16,038 Other inflo
Slide 26: Disciplined ALM Management over the last years
Disciplined ALM Management over the last 8 years 300% 0% Cumulative gap upto 1m Cumulative gap upto 12m Permissible limit -2 214% -4 -6 141% -8 119% 120% -1 71% 96% 64% 57% 48% 50% -1 61% 39% 44% 38% 36% 51% 44% 36% 16% 29% -1 4% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -1 Dec 25
Slide 27: Liability mix over the last 8 years
Liability mix over the last 8 years.. 5% 5% 4% 9% 8% 10% 8% 8% 11% 8% 2% 13% 4% 3% 3% 4% 5% 4% 4% 6% 3% 7% 4% 31% 33% 38% 35% 25% 35% 37% 38% 35% 40% 43% 35% 32% 34% 34% 58% 54% 48% 58% 31% 53% 35% 16% 18% 21% 12% 15% 0% 1% 4% 6% 8% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Jun'19 Sep'
Slide 28: 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 26.9% 6.6 24.7% 6.6 6.6 % 6.4 6.3 6.3 6.2 22.0% 23.2% 20.3% 20.7% 5.3 19.5% 5.4 19.5% 19.7% % 19.1% 17.5% 18.0% 19.7% 4.9 * 18.7% 16.2% 16.1% 16.3% 15.9% 15.0% 15.5% 14.2% 14.6% % % 5.7% 5.0% 3.8% 4.4% 4.0% 3.8% % 3.3%
Slide 29: Resilient business model
Resilient business model 47.0% 46.0% 44.6% 45.0% 43.1% 41.4% 41.8% 38.4% 36.0% 35.3% 35.0% 34.8% 33.3% 33.9% 32.9% 30.9% 31.4% 31.7% 29.9% 28.4% 26.4% 27.2% 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.49% 8.38% 8.29% 4.2% 4.1% 3.6% 3.5% 3.7% 3.9% 4.1% 4.0% 4.7% 4.8% 3.3% @ @ @ @ Mar'12 Mar'13
Slide 30: Customer franchise and distribution reach
Section 05 Customer franchise and distribution reach 29
Slide 31: Customer franchise
Customer franchise Q3 FY19 Q3 FY20 Q2 FY20 32.57 MM Total Franchise 40.38 MM* 38.70 MM 25.30 MM Credit segment filter 31.86 MM 30.55 MM 24.29 MM Overall Cross sell franchise 30.76 MM 29.45 MM Non delinquent 22.07 MM customers 27.41 MM 26.30 MM Cross sell franchise 19.69 MM 23.48 MM 22.78 MM New to B
Slide 32: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 30 Sep 31 Dec Geographic Presence 2016 2017 2018 2019 2019 2019 Urban 262 377 730 927 956 986 Rural 397 538 602 903 1,041 1,193 Of which rural lending branches 105 177 219 347 427 445 Of which rural lending franchise 292 361 383 556 614 748 Total Bajaj
Slide 33: Strong distribution reach
Strong distribution reach Active distribution points of sale 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Mar 2019 30 Sep 2019 31 Dec 2019 Consumer durable stores Urban 9,400+ 14,000+ 15,500+ 20,400+ 22,900+ 23,300+ Consumer durable stores Rural 3,200+ 5,500+ 8,200+ 14,500+ 16,400+ 17,900+ Digital product
Slide 34: Business segment wise AUM
Section 06 Business segment wise AUM 33
Slide 35: Business segment wise AUM as of 31 December 2019
Business segment wise AUM as of 31 December 2019 ₹ crore Standalone as of BHFL as of Consolidated Consolidated Composition as Assets Under Management Growth 31 Dec 2019 30 Sep 2019 as of 31 Dec 2019 as of 31 Dec 2018 of 31 Dec 2019 Consumer B2B Auto Finance Business 13,176 - 13,176 8,741 51% 9% Cons
Slide 36: Update on credit quality
Section 07 Update on credit quality 35
Slide 37: Credit Quality Provisioning Coverage
Credit Quality Provisioning Coverage Values in ₹ Cr Consolidated GNPA % NNPA % PCR Assets Under Management AUM GNPA NNPA (%) 31 Dec 18 30 Sep 19 31 Dec 19 31 Dec 18 30 Sep 19 31 Dec 19 31 Dec 2019 Auto Finance Business 13,176 798 355 55% 5.42% 5.57% 5.68% 2.11% 2.36% 2.61% Sales Finance Business 13,
Slide 38: NPA movement - consolidated
NPA movement - consolidated Values in ₹ Cr Particulars Assets Under Management 1,07,507 1,15,888 1,28,898 1,35,533 1,45,092 Opening GNPA (A) 1,471 1,691 1,804 2,094 2,213 Roll Forward into NPA (i) 702 593 697 779 924 Restructuring (ii) 13 14 5 7 12 Total Slippages (B = i + ii) 715 607 702 786 936 Ro
Slide 39: ECL summary - consolidated
ECL summary - consolidated Assets categorization Stage 1 & 2 (represents standard assets) 98.45% 98.46% 98.40% 98.39% 98.39% Stage 3 (represents GNPA) 1.55% 1.54% 1.60% 1.61% 1.61% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Gross Stage 1 & 2 a
Slide 40: 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 98.83% 98.91% 99.04% 98.91% 98.96% 98.69% 98.54% 98.52% 98.59% Bkt 0 87.85% 88.76% 87.60% 88.32% 89.
Slide 41: 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 97.46% 97.62% 97.64% 97.69% 97.81% 97.76% 97.46% 97.21% 97.02% Bkt 0 99.63% 99.70% 99.66% 99.68% 99.
Slide 42: 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 98.96% 99.48% 99.49% 99.40% 99.54% 99.52% 99.42% 99.61% 99.63% Bkt 0 99.56% 99.46% 99.49% 99.44% 99.54% 9
Slide 43: Bajaj Housing Finance Limited Overview
Section 08 Bajaj Housing Finance Limited Overview 42
Slide 44: 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 • Offers full range of mortgage products such as home loans, loan against property and lease rental discounti
Slide 45: 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 LRD transactions are backed by rentals through escrow mechanism • Ticket size of l
Slide 46: Portfolio Composition - Bajaj Housing Finance Limited
Portfolio Composition - Bajaj Housing Finance Limited ₹ in Crore Product Category Home Loan Portfolio Customer Categorisation HL to Others Rural Professionals 875 HL to Self 1,009 1,486 3% DF Employed 5% 5% 1,665 1,298 5% 6% LRD 2,879 10% LAP 3,561 12% Home Loan 19,570 65% HL to Salaried 17,870 89%
Slide 47: Customer Profile Bajaj Housing Finance Limited
Customer Profile Bajaj Housing Finance Limited Home Loan Loan Against Property Average Loan Size Overall 39 lakhs 28 lakhs Average Loan Size Urban 41 lakhs 46 lakhs Average Loan Size Rural 18 lakhs 12 lakhs LTV (at origination) 71% 46% Average Loan Term Overall 18 years 11 years Average Customer Age
Slide 48: Financial statement summary Bajaj Housing Finance Limited
Financial statement summary Bajaj Housing Finance Limited ₹ in Crore Financials snapshot Q3 FY20 Q3 FY19 9M FY20 9M FY19 FY19 Assets under management 30,035 13,963 30,035 13,963 17,562 Assets under finance 25,961 13,963 25,961 13,963 17,332 Interest income 620 297 1,616 616 998 Fee and other income
Slide 49: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited ECL categorization Stage 1 & 2 (represents standard assets) 99.97% 99.95% 99.94% 99.94% 99.93% Stage 3 (represents GNPA) 0.03% 0.05% 0.06% 0.06% 0.07% Summary of stage wise assets and ECL provisioning ₹ in Crore Financial Assets & ECL provision Gross Stage 1
Slide 50: Behaviouralized ALM snapshot as on 31 December 2019
Behaviouralized ALM snapshot as on 31 December 2019 ₹ Cr 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 2,929 - - - - - - - - - 2,929 Advances 465 276 279 818 1,592 5,581 4,280 3,389 3,866 5,575 26,121 Other inflow
Slide 51: Thank You
BAJAJ FINANCE LIMITED Q3 FY20 Investor Presentation Thank You
Slide 52: 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 53: Annexures
BAJAJ FINSERV Annexures 52
Slide 54: 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 55: Glossary
Glossary 2W Two Wheeler HL Home Loan 3W Three Wheeler IFA Independent Financial Advisor ACMF Auto Components Manufacturer Financing IRR Internal Rate of Return ALM Asset & Liability Management LAP Loan Against Property AR Assets Receivable LAS Loan Against Securities ARU Activation, Retention & Usag