Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q3 FY19 Earnings Presentation
52 slides from Bajaj Finance's earnings presentation, Jan 29, 2019
Slide 1: Exchange filing cover letter
BAJAJ FINANCE LIMITED SEC/BM/20 19/44 29 January 20 19 THE MANAGER, THE MANAGER, BSELIMITED 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 SCR
Slide 2: Q3 FY19 Investor Presentation
Bajaj Finance Limited Q3 FY19 Investor Presentation 29 January, 2019
Slide 3: Presentation Path
Presentation Path • Section 01 Bajaj Finance Limited overview 3 • Section 02 Ind AS financial performance Q3 FY19 14 • Section 03 Non financial commentary 18 • Section 04 Asset liability management 20 • Section 05 Customer Franchise and distribution reach 27 • Section 06 Business segment wise AUM 30
Slide 4: Section 01 Bajaj Finance Limited overview
Section 01 Bajaj Finance Limited overview 3
Slide 5: Bajaj group structure
Bajaj group structure Bajaj Holdings & Investment Limited (Listed) 1 31.54% 2 39.16% Bajaj Auto Limited Bajaj Finserv Limited (Listed) (Listed) Auto Business Arm Financial Services Arm 3 54.99% 74% 74% Bajaj Finance Limited Bajaj Allianz life Insurance Bajaj Allianz General Insurance (Listed) Compan
Slide 6: 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 31 year old non bank finance company 2nd largest private General insurer in Amongst top 5 private players as of India as of FY
Slide 7: What do we stand for
What do we stand for a sustainable ROA of 3% and ROE of 18-20% in the medium term 6
Slide 8: 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 Overall franchise of 32.57 MM and cross sell client base of 19.69 MM Strong focus on cross selling assets, insura
Slide 9: Bajaj Finance Shareholder profile
Bajaj Finance Shareholder profile Top 20 investors & their holdings As on 31 As on 30 As on 31 OTHERS S.No Name of Shareholder CORPORATES 1.68% 1 BAJAJ FINSERV LTD 54.99% 54.99% 55.13% 6.16% 2 GOVERNMENT OF SINGAPORE 3.70% 3.62% 3.94% MF 3 MAHARASHTRA SCOOTERS LTD. 3.28% 3.28% 3.29% 7.50% 4 STEADVIE
Slide 10: Financial snapshot
Financial snapshot ₹ in Crores FY18@ YoY CAGR Financials snapshot @ FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 (Consol.) FY17 FY18 (11 years) Assets under management 2,478 2,539 4,032 7,573 13,107 17,517 24,061 32,410 44,229 60,196 84,033 40% 42% Income from operations 503 599 916 1,406 2,172
Slide 11: Product suite
Product suite BAJAJ FINANCE LIMITED Consumer SME Commercial Rural Deposits Partnerships & Services • Consumer Durable Loans • Unsecured Working • Securities Lending • Consumer Durable • Retail Term • Life Insurance • Digital Product Loans (1) Capital Loans (1) • Large Value Lease Loans Deposits Dist
Slide 12: Executive summary Bajaj Finance Limited Consolidated
Executive summary Bajaj Finance Limited Consolidated Overview • 31 year old non bank with a demonstrated track record of profitable growth • Diversified financial services company focused on Consumer, Payments, Rural, SME, Commercial and Mortgages • Strong focus on deposits acceptance and fee produc
Slide 13: Executive summary Bajaj Finance Limited Standalone
Executive summary Bajaj Finance Limited Standalone Overview • Focused on Consumer, Rural, SME and Commercial lines of businesses • Strategic business unit organization design supported by horizontal common utility functions to drive domain expertise, scalability and operating leverage • Strategy is
Slide 14: Executive summary Bajaj Finance Limited Standalone
Executive summary Bajaj Finance Limited Standalone SME Business • Focused on affluent SMEs with an average annual sales of ₹ 10-12 Crores with established financials & demonstrated borrowing track records • Offer a range of working capital products to SME & self employed professionals • Offer full r
Slide 15: Section 02 Ind AS financial performance Q3 FY19
Section 02 Ind AS financial performance Q3 FY19 14
Slide 16: Consolidated key performance highlights for Q3 FY19
Consolidated key performance highlights for Q3 FY19 • Customer franchise as of 31 Dec 2018 31% to 32.57 MM from 24.81 MM as of 31 Dec 2017. During the quarter, the company acquired 2.5 MM new customers • New loans booked during Q3 FY19 49% to 6.77 MM from 4.54 MM in Q3 FY18 • AUM as of 31 Dec 20
Slide 17: Financial Statement Summary Consolidated
Financial Statement Summary Consolidated ₹ in crore Financials snapshot Q3 FY19 Q3 FY18 YoY 9m FY19 9m FY18 YoY FY18 Assets under management 1,09,930 78,033 41% 1,09,930 78,033 41% 84,135 Total Interest & fee income 4,995 3,374 48% 13,233 9,274 43% 12,772 Interest expenses 1,786 1,179 51% 4,717 3,39
Slide 18: Reconciliation of consolidated profit with previous GAAP
Reconciliation of consolidated profit with previous GAAP ₹ in crore Particulars Q3 FY19 Q3 FY18 YoY 9m FY19 9m FY18 YoY FY18 Profit before tax as per previous GAAP 1,832 1,178 56% 4,966 2,962 68% 4,096 Ind AS adjustments increasing / (decreasing) profit : Adoption of Effective Interest Rate (EIR) fo
Slide 19: Section 03 Non financial commentary
Section 03 Non financial commentary 18
Slide 20: Non financial commentary
Non financial commentary • Bajaj Financial Securities Limited (BFinsec) a 100% subsidiary of Bajaj Finance Limited is set to start its business. Its strategy is to offer a full product suite (demat & broking) to Loan Against Securities (LAS) clients and grow the profit pool of LAS business • Bajaj H
Slide 21: Section 04 Asset liability management
Section 04 Asset liability management 20
Slide 22: Behaviouralized ALM snapshot as on 31 Dec 2018
Behaviouralized ALM snapshot as on 31 Dec 2018 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 yr Total Cash & Investments 5,189 1 1 4 6 320 88 3,181 8,790 Advances 7,888 5,416 5,523 12,466 16,736 30,075 10,380 5,311 93,796 Trade Receivable & Others 1,939 28 67 634 5
Slide 23: Disciplined ALM Management over the last 8 years
Disciplined ALM Management over the last 8 years 0% 141% -2% 119% 120% 106% -4% 96% 83% -6% 71% 64% 55% -8% 48% 61% 50% 38% 36% 44% -10% 36% 16% -12% 4% -14% -15% -15% -15% -15% -15% -15% -15% -15% -15% -16% Cumulative gap upto 1m Cumulative gap upto 12m Regulatory Requirement 22
Slide 24: Liability mix over the last 8 years
Liability mix over the last 8 years.. 8% 5% 5% 8% 12% 9% 10% 11% 13% 4% 3% 3% 4% 6% 3% 7% 5% 5% 31% 33% 38% 35% 25% 43% 35% 40% 36% 54% 34% 32% 58% 58% 48% 53% 31% 35% 12% 15% 14% 6% 8% 0% 0% 1% 4% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Sep'18 Dec'18* Deposits Bank Loans (incl. CC/OD/WCDL)
Slide 25: Conservative leverage standards
Conservative leverage standards 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 6.8 24.7% 6.6 6.4 6.3 22.0% 6.2 22.1% 6.2 * 20.3% 19.1% 19.5% 19.7% 5.9 21.4% 5.3 17.5% 18.0% 17.2% 18.7% 16.2% 16.1% 5.1 16.8% 15.0% 14.6% 14.2% 5.7% 5.0% 4.9% 4.6% 3.3% 3.8% 3.4% 2.5% 3.0% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar
Slide 26: Key takeaways on liquidity
Key takeaways on liquidity • The Company and its housing finance subsidiary (BHFL) have continued to maintain a strong ALM profile as of 31 Dec 2018. • The Company delivered highest ever addition to its loan receivables book by 9,867 cr in Q3 FY19, despite tough liquidity environment in first 45 day
Slide 27: Resilient business model
Resilient business model 55.00% 47.0% 46.0% 44.6% 45.0% 43.1% 45.00% 41.4% 41.8% 38.7% 38.4% 37.9% * 36.0% 32.9% 33.3% 35.00% 36.4% 35.9% 29.9% 28.4% 26.4% 25.00% 15.00% 9.1% 9.7% 9.9% 9.9% 9.5% 9.0% 8.2% 8.2% 8.2% 4.2% 4.1% 3.6% 3.5% 3.7% 3.9% 4.0% 4.0% 3.3% 5.00% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Slide 28: Section 05 Customer franchise and distribution reach
Section 05 Customer franchise and distribution reach 27
Slide 29: Customer franchise
Customer franchise Q3 FY18 Q3 FY19 Q2 FY19 24.81 MM Total Franchise 32.57 MM 30.05 MM 18.56 MM Credit segment filter 25.30 MM 23.13 MM 17.69 MM Overall Cross sell franchise 24.29 MM 22.17 MM Non delinquent 16.12 MM customers 22.07 MM 20.08 MM Cross sell franchise 14.37 MM 19.69 MM Addition of 1.87 M
Slide 30: Strong distribution reach
Strong distribution reach Geographic Presence 31 Mar 2015 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Dec 2018 Urban 161 262 377 730 867 Rural 232 397 538 602 869 Of which Rural Lending branches 50 105 177 219 341 Of which Rural Lending franchisees 182 292 361 383 528 Total Bajaj Finance presence 393 659
Slide 31: Section 06 Business segment wise AUM
Section 06 Business segment wise AUM 30
Slide 32: Business segment wise AUM as of 31 Dec 2018
Business segment wise AUM as of 31 Dec 2018 ₹ crore Standalone as of BHFL as of Consolidated Consolidated Composition as Assets Under Management Growth 31 Dec 2018 31 Dec 2018 as of 31 Dec 2018 as of 31 Dec 2017 of 31 Dec 2018 Consumer B2B -Auto Finance Business 9,034 - 9,034 6,080 49% 8% Consumer B
Slide 33: Section 07 Bajaj Housing Finance Limited Overview
Section 07 Bajaj Housing Finance Limited Overview 32
Slide 34: Executive summary - BHFL
Executive summary - BHFL Bajaj Housing • Bajaj Housing Finance Limited is a 100% subsidiary of Bajaj Finance Limited, registered with National Housing Banks as a Housing Finance Limited Finance Company • It offers a full range of mortgage products such as home loans, loan against property and lease
Slide 35: Executive summary - BHFL
Executive summary - BHFL • Offers construction finance and inventory finance mainly to Category A and A+ developers in India Developer Finance • Currently present in 8 locations (Mumbai, Bangalore, Pune, Ahmedabad, Chennai, Kolkata, Hyderabad, Surat) • Average ticket size ranges between 15 crore 20
Slide 36: Portfolio Composition as at 31 Dec 2018 - BHFL
Portfolio Composition as at 31 Dec 2018 - BHFL ₹ in crore Customer Category Product Category Others DF 418 573, 4% 3% Self Employed LRD 2,246, 16% 1,211, 9% LAP 2,115, 15% Salaried Home Loan 11,794, 84% 9,723, 69% Salaried focused acquisition strategy, comprising 91% of the Q3 acquisition 35
Slide 37: Customer Profile - BHFL
Customer Profile - BHFL Home Loan Loan Against Property Average Loan Size Overall 37 Lacs 27 Lacs Average Loan Size Urban 38 Lacs 44 Lacs Average Loan Size Rural 17 Lacs 11 Lacs LTV (at origination) 70% 50% Average Loan Term Overall 18 years 11 years Average Customer Age 40 years 43 years Primary Se
Slide 38: Financial Statement Summary BHFL
Financial Statement Summary BHFL ₹ in crore Financials snapshot Q3 FY19 Q3 FY18 9m FY19 9m FY18 FY18 Assets under management 14,040 1,579 14,040 1,579 3,589 Total Interest & fee income 339 25 727 40 106 Interest expenses 207 13 416 13 47 Net Interest Income (NII) 132 12 311 27 59 Operating Expenses
Slide 39: ECL summary - BHFL
ECL summary - BHFL ECL categorization Stage 1 & 2 100.00% 99.98% 99.97% Stage 3 0.00% 0.02% 0.03% Summary of stage wise assets and ECL provisioning Assets & ECL provision Gross Stage 1 & 2 assets 7,272 10,710 14,037 ECL Provision Stage 1 & 2 10 14 20 Net Stage 1 & 2 assets 7,262 10,696 14,017 ECL Pr
Slide 40: Behaviouralized ALM snapshot as on 31 Dec 2018 - BHFL
Behaviouralized ALM snapshot as on 31 Dec 2018 - BHFL 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 yr Total Cash & Investments 809 - - - - - - - 809 Advances 280 196 193 558 1,031 3,322 2,133 6,328 14,041 Trade Receivable & Others 2,069 - - 1 - 19 - 23 2,112 Total
Slide 41: Section 08 Update on credit quality
Section 08 Update on credit quality 40
Slide 42: Credit quality Portfolio composition
Credit quality Portfolio composition Consumer Durable loan portfolio Two & Three wheeler loan portfolio 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket Bkt 0 98.07% 97.83% 98.38% 98.58% 98.83% 98.91% 99.04% 98.91% 98.96% Bkt 0 8
Slide 43: Portfolio Credit quality Including BHFL
Portfolio Credit quality Including BHFL Personal Loans Cross Sell portfolio Salaried Personal Loans portfolio 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Bkt 0 97.81% 97.29% 97.18% 97.26% 97.46% 97.62% 97.64% 97.69% 97.81% Bkt 0 99.47
Slide 44: Portfolio Credit quality Including BHFL
Portfolio Credit quality Including BHFL Home Loans portfolio Rural Lending portfolio 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Bkt 0 99.38% 99.02% 98.91% 98.82% 98.96% 99.48% 99.49% 99.40% 99.54% Bkt 0 98.82% 99.15% 99.17%
Slide 45: Credit Quality Provisioning Coverage
Credit Quality Provisioning Coverage 31 Dec 18 31 Dec 17 31 Dec 18 31 Dec 17 Consolidated AUM PCR Assets Under Management GNPA NNPA GNPA GNPA NNPA NNPA 31 Dec 18 (%) (%) (%) (%) (%) Consumer B2B -Auto Finance Business 9,034 506 190 62% 5.42% 6.14% 2.11% 2.63% Consumer B2B - Sales Finance Businesses
Slide 46: NPA movement - Consolidated
NPA movement - Consolidated (Values in ₹ Cr) Particulars Assets Under Management 77,970 84,033 93,314 1,00,217 1,09,930 Opening GNPA (A) 1,187 1,254 1,164 1,280 1,471 Roll Forward into NPA (i) 348 298 378 480 702 Restructuring (ii) 3 4 1 3 13 Total Slippages (B = i + ii) 351 302 379 483 715 Roll bac
Slide 47: ECL summary - Consolidated
ECL summary - Consolidated ECL categorization Stage 1 & 2 98.37% 98.59% 98.61% 98.51% 98.45% Stage 3 1.63% 1.41% 1.39% 1.49% 1.55% Summary of stage wise assets and ECL provisioning Assets & ECL provision Gross Stage 1 & 2 assets 75,615 81,292 90,601 97,395 1,07,094 ECL Provision Stage 1 & 2 708 721
Slide 48: 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 49: Thank You
BAJAJ FINANCE LIMITED Q3 FY19 Investor Presentation Thank You
Slide 50: Annexures
BAJAJ FINSERV Annexures 49
Slide 51: Glossary
Glossary 2W Two Wheeler IFA Independent Financial Advisor 3W Three Wheeler IRR Internal Rate of Return ACMF Auto Components Manufacturer Financing LAP Loan Against Property ALM Asset & Liability Management LAS Loan Against Securities AR Assets Receivable MF Mutual Fund ARU Activation, Retention & Us
Slide 52: ALM Strategy (Standalone)
ALM Strategy (Standalone) Borrowings ₹ 80,862 Crs) Borrowings ₹ 73,822 Crs) 740 , 1,425, 1% 2% Banks 6,497, Banks 9,295 , 9% 11% NCDs 24,912, NCDs 11,489 , 11,014, 26,103 , 34% 14% Subordinate Debt 15% Subordinate Debt 32% Deposits 3,921, Deposits 4,057 , 5% 5% CPs CPs 29,178 , 36% 26,053, CBLO CBLO