Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q4 FY20 Earnings Presentation
65 slides from Bajaj Finance's earnings presentation, May 19, 2020
Slide 1: Exchange filing cover letter
BAJAJ FINANCE LIMITED 19 May 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: 500034
Slide 2: Q4 FY20 Investor Presentation
Bajaj Finance Limited Q4 FY20 Investor Presentation 19 May 2020
Slide 3: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary Financial performance Customer Franchise and Update on Q4 FY20 Q4 FY20 and FY20 distribution reach credit quality 3 30 41 47 Section 02 Section 04 Section 06 Bajaj Finance Limited Asset liability Business segment wise ov
Slide 4: Section 01 Executive summary Q4 FY20
1.1 Quarter gone by Executive summary on Covid-19 Section 01 1.2 Executive summary Q4 FY20 1.3 Executive summary on Q4 FY20 1.4 Executive summary FY20 Back 3
Slide 5: Quarter gone by
Quarter gone by Start of Q4 FY20 was quite promising aided by various fiscal measures implemented by the GOI in Q2-Q3 supported by good monsoon. Economy was clearly on the mend in Q4. However, due to sudden and unprecedented Covid-19 pandemic, India was under full lockdown and thus the company lost
Slide 6: Executive summary on Covid-19
Executive summary on Covid-19 In these unprecedented times, Company is focused on capital preservation, balance sheet protection and operating expenses management. Company has healthy capital adequacy, strong liquidity position, low gross and net NPA, access to retail deposits, large mass affluent c
Slide 7: Executive summary on Covid-19
Executive summary on Covid-19 Balance Sheet and Franchise: 1. Admist Covid-19, the Company has taken a cautious stance, and has tightened underwriting and LTV norms across all businesses till July 2020. It is currently open for business in 1,926 urban and rural locations. 2. There was no lending in
Slide 8: Executive summary on Covid-19
Executive summary on Covid-19 Liquidity Management 10. As on 15 May 2020, company had consolidated liquidity buffer of ₹ 20,900 crore and SLR investments of Rs. 3,310 crore. This represents 18.6% of its total borrowing. Given the environment, Company will continue to run high liquidity buffer, despi
Slide 9: Executive summary on Covid-19
Executive summary on Covid-19 19. Company has initiated a based exercise to reimagine its cost structure across businesses and functions in a post Covid-19 environment. Credit Costs 20. Most portfolios of the Company remained strong as of February 2020. Only 2 out of 13 portfolios are either yellow
Slide 10: Executive summary on Covid-19
Executive summary on Covid-19 25. Company has a rigorous and granular collections capacity planning model. Company has committed significant investments and is currently executing significant ramp up of its collections capacity to manage Covid-19 bounce portfolio. 26. Gross NPA & Net NPA stood at 1.
Slide 11: Executive summary Q4 FY20 - Consolidated
Executive summary Q4 FY20 - Consolidated Balance Sheet and Franchise: 1. AUM grew by 27% YoY to ₹ 1,47,153 crore as of 31 March 2020. Adjusted for lower acquisition due to lockdown, AUM would have grown by 31% to approximately ₹ 1,51,700 crore. 2. New loans booked increased by 3% to 6.03 MM in Q4 FY
Slide 12: Executive summary Q4 FY20 - Consolidated
Executive summary Q4 FY20 - Consolidated 9. Deposits book stood at ₹ 21,427 crore, a growth of 62% YoY. Its contribution to consolidated balance sheet was 17% as of 31 March 2020. Retail deposits contributed to ~63% to the deposits book. Operating Efficiencies 10. Overall NIM remained strong in Q4 F
Slide 13: Executive summary Q4 FY20 - Consolidated
Executive summary Q4 FY20 - Consolidated Profitability and Capital: 16. Consolidated profit after tax for the quarter contracted by 19% to ₹ 948 crore. Adjusted for ₹ 900 crore of contingency provision for Covid-19, profit after tax was up 38%. 17. Return on Assets for the quarter was 0.7% and Retur
Slide 14: Executive summary FY20 - Consolidated
Executive summary FY20 - Consolidated Balance Sheet and Franchise: 1. New loans booked increased by 17% to 27.44 MM from 23.50 MM in FY19. Adjusted for lower acquisition due to lockdown, new loans acquisition would have grown by 21% to approximately 28.44 million. 2. Customer franchise increased by
Slide 15: Executive summary FY20 - Consolidated
Executive summary FY20 - Consolidated 9. The Board of Directors has not recommended any final dividend. The interim dividend of ₹ 10 per equity share of the face value of ₹ 2 (500%) declared by Board of Directors, at its meeting held on 21 February 2020, shall be considered as the final dividend for
Slide 16: Section 02 Bajaj Finance Limited overview
2.1 Bajaj group structure 2.2 Bajaj Finserv group - Executive summary 2.3 What do we stand for Section 02 Bajaj Finance Limited overview 2.4 Our Shareholder profile 2.5 12 year financial snapshot 2.6 Product suite 2.7 Executive summary Back 15
Slide 17: 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% 52.82% 3 Bajaj Finance Limited Bajaj Allianz Life Bajaj Allianz General (Listed) Insurance Company
Slide 18: 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 33 year old non bank finance company 2nd largest private general insurer in India as of FY19 Amongst top 5 private players as
Slide 19: 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 Back 18
Slide 20: 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% Back 19
Slide 21: 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 42.60 MM and cross sell franchise Focus on mass affluent and above clients of 24.13 MM Strong focus on cross selling assets, p
Slide 22: Our Shareholder profile
Our Shareholder profile Top 20 investors & their holdings MF As on 31 As on 31 As on 31 8.08% S.No Name of Shareholder Mar 20 Dec 19 Mar 19 Others 1 BAJAJ FINSERV LTD 52.82% 52.82% 54.99% 2 GOVERNMENT OF SINGAPORE 4.46% 4.62% 3.68% 1.18% 3 MAHARASHTRA SCOOTERS LTD. 3.15% 3.15% 3.28% 4 STEADVIEW CAPI
Slide 23: Financial snapshot
Financial snapshot ₹ in Crores FY18@ FY19 @ FY20@ YoY CAGR Financials snapshot @ FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 (Consol.) (Consol.) (Consol.) (FY19 FY20) (12 yrs) Assets under management 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 27% 45% Income
Slide 24: 12-year financial snapshot
12-year financial snapshot 42.6 7,322 50.6% 12 Year CAGR : AUM 45% ; PBT 57% 34.5 47.0% 46.0% 44.8% 45.0% 6,179 44.4% 44.6% 5.50% 43.1% 26.2 41.4% 40.2% 20.1 35.3% 33.5% 16.1 12.9 3,843 10.1 8.1 6.4 2,818 4.9 2.9 3.7 1,965 2.20% 1,357 1,091 872 602 370 51 134 0.80% 0.63% 0.65% 0.45% 0.44% 0.43% 0.28
Slide 25: 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 26: Executive summary Consolidated
Executive summary Consolidated 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 • Strong f
Slide 27: Executive summary Bajaj Finance Limited
Executive summary Bajaj Finance Limited 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 cr
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 and financing against used car • Focused on affluent SMEs (average sales of ₹15 to 17 crore) with establi
Slide 29: 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 30: 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 lease rental discounting transactions are backed by rentals through escrow mechani
Slide 31: Section 03 Financial performance Q4 FY20 and FY20
3.1 Financial statement summary Consolidated Section 03 Financial performance 3.2 Financial statement summary Bajaj Finance Limited Q4 FY20 and FY20 3.3 Financial statement summary Bajaj Housing Finance Limited Back 30
Slide 32: Financial statement summary Consolidated
Financial statement summary Consolidated ₹ in crore Financials snapshot Q4 FY20 Q4 FY19 YoY FY20 FY19 YoY Assets under management 1,47,153 1,15,888 27% 1,47,153 1,15,888 27% Assets under finance 1,41,376 1,12,513 26% 1,41,376 1,12,513 26% Interest income 6,302 4,656 35% 22,970 16,349 40% Fee and oth
Slide 33: Financial statement summary Bajaj Finance Limited
Financial statement summary Bajaj Finance Limited ₹ in Crore Financials snapshot Q4 FY20 Q4 FY19 YoY FY20 FY19 YoY Assets under management 1,16,102 98,671 18% 1,16,102 98,671 18% Assets under finance 1,13,417 95,181 19% 1,13,417 95,181 19% Interest income 5,616 4,273 31% 20,668 15,346 35% Fee and ot
Slide 34: Financial statement summary Bajaj Housing Finance Limited
Financial statement summary Bajaj Housing Finance Limited ₹ in Crore Financials snapshot Q4 FY20 Q4 FY19 YoY FY20 FY19 YoY Assets under management 32,705 17,562 86% 32,705 17,562 86% Assets under finance 27,975 17,332 61% 27,975 17,332 61% Interest income 687 382 80% 2,303 998 131% Fee and other inc
Slide 35: Section 04 Asset liability management
4.1 Conservative leverage standards Bajaj Finance Limited 4.2 Resilient business model Consolidated Behaviouralized ALM as of March 31st Section 04 4.3 Bajaj Finance Limited Asset liability management 4.4 Behaviouralized ALM as of March 31st Bajaj Housing Finance Limited 4.4 Disciplined ALM Manageme
Slide 36: 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 6.8 26.9% 25.0% 6.6 24.7% 6.6 6.6 6.4 6.3 6.3 6.2 22.0% 23.2% 21.3% 20.3% 20.7% 5.3 19.5% 5.4 19.5% 19.7% 19.1% 18.0% 4.9 5.1 * 17.5% 19.7% 18.7% 16.2% 16.1% 16.3% 15.9% 15.0% 15.5% 14.2% 14.6% 5.7%
Slide 37: Resilient business model Consolidated
Resilient business model Consolidated 54.52% 47.0% 46.0% 44.6% 45.0% 43.1% 41.4% 41.8% 38.4% 36.0% 35.3% 35.0% 34.8% 33.9% 32.9% 33.3% 29.9% 30.9% 31.4% 31.7% 28.4% 26.4% 27.2% 31.0% 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.49% 8.38% 8.29% 8.37% 4.2% 4.1% 3.9% 4.1% 4.0% 4.7% 4.8% 4.1% 3.6%
Slide 38: Behaviouralized ALM as of March 2020 BFL
Behaviouralized ALM as of 31 March 2020 BFL ₹ 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 12,517 1 1 4 120 2,115 437 5,561 20,755 Advances 6,583 4,115 6,262 13,863 19,566 42,699 16,116 7,851 1,17,057 Other inflows 4,
Slide 39: Behaviouralized ALM as of March 2020 BHFL
Behaviouralized ALM as of 31 March 2020 BHFL ₹ 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 1,659 500 1,000 - - - - - - - 3,159 Advances 527 384 387 1,114 2,067 6,422 4,506 3,433 3,742 5,640 28,222 Other inflo
Slide 40: Disciplined ALM Management Bajaj Finance Limited
Disciplined ALM Management Bajaj Finance Limited 300% Cumulative gap upto 1m Cumulative gap upto 12m Permissible limit 220% 214% 141% 119% 120% 96% 61% 51% 44% 71% 39% 36% 36% 64% 57% 54% 48% 50% 44% 38% 16% 4% 29% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% Dec Back 39
Slide 41: Liability mix over the last 9 years
Liability mix over the last 9 years Bajaj Finance Limited 5% 5% 4% 4% 9% 8% 10% 8% 8% 11% 8% 2% 13% 4% 3% 4% 3% 3% 4% 6% 5% 4% 4% 3% 7% 4% 31% 33% 38% 35% 25% 35% 37% 38% 38% 35% 40% 43% 35% 32% 30% 34% 34% 58% 54% 48% 58% 31% 53% 35% 18% 21% 21% 15% 16% 12% 0% 0% 1% 6% 8% 4% Mar'12 Mar'13 Mar'14 Ma
Slide 42: Section 05 Customer franchise and distribution reach
5.1 Customer franchise Section 05 5.2 Geographic presence Customer franchise and distribution reach 5.3 Geographic presence Covid Zones 5.4 Strong distribution reach Back 41
Slide 43: Customer franchise
Customer franchise Q4 FY19 Q4 FY20 Q3 FY20 34.48 MM Total Franchise 42.60 MM* 40.38 MM 26.93 MM Credit segment filter 33.47 MM 31.86 MM 25.89 MM Overall Cross sell franchise 32.32 MM 30.76 MM Non delinquent 23.26 MM customers 28.48 MM 27.41 MM Cross sell franchise 20.67 MM 24.13 MM Addition of 0.65
Slide 44: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 31 Mar Geographic Presence 2016 2017 2018 2019 2020 Urban 262 377 730 927 1,035 Rural 397 538 602 903 1,357 Of which rural lending branches 105 177 219 347 527 Of which rural lending franchise 292 361 383 556 830 Total Bajaj Finance presence 659 915 1,
Slide 45: Geographic presence Covid-19 locations as of May 2020
Geographic presence Covid-19 locations as of 15 May 2020 Geographic Presence 31 Mar 2020 Green Orange Red Urban 1,035 201 504 330 Rural 1,357 345 679 333 Of which rural lending branches 527 139 270 119 Of which rural lending franchise 830 207 409 214 Total Bajaj Finance presence 2,392 546 1,183 663
Slide 46: Strong distribution reach
Strong distribution reach Active distribution points of sale 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Mar 2019 31 Mar 2020 Consumer durable stores Urban 9,400+ 14,000+ 15,500+ 20,400+ 24,200+ Consumer durable stores Rural 3,200+ 5,500+ 8,200+ 14,500+ 19,600+ Digital product stores 5,200+ 5,900+ 15,900
Slide 47: Section 06 Business segment wise AUM
Section 06 6.1 Business segment wise AUM as of March 31st - Consolidated Business segment wise AUM 6.2 Business wise AUM as of March 31st Bajaj Housing Finance Ltd Back 46
Slide 48: Business segment wise AUM as of March 2020 - Consolidated
Business segment wise AUM as of 31 March 2020 - Consolidated ₹ crore Standalone as of BHFL as of Consolidated Consolidated as Composition as Assets Under Management Growth 31 Mar 2020 31 Mar 2020 as of 31 Mar 2020 of 31 Mar 2019 of 31 Mar 2020 Consumer B2B Auto Finance Business 13,085 - 13,085 9,726
Slide 49: Break-up of Mortgages AUM as of March 2020
Break-up of Mortgages AUM as of 31 March 2020 ₹ crore Bajaj Housing Finance Limited Consolidated Composition as Assets Under Management 31 Mar 2020 31 Mar 2019 Growth 31 Mar 2020 31 Mar 2019 Growth of 31 Mar 2020 Home Loans 21,435 11,584 85% 26,724 18,100 48% 58% Loan against property 3,996 2,177 84
Slide 50: Section 07 Update on credit quality
2.1 Provisioning Coverage - consolidated 2.2 NPA movement - consolidated 2.3 ECL summary consolidated Section 07 Update on credit quality 2.4 ECL summary Bajaj Housing Finance Limited 2.5 Portfolio credit metrics 2.6 Covid-19 Moratorium portfolio bounce performance 2.7 FY20 Leverage risk update Back
Slide 51: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated Values in ₹ Cr Consol AUM PCR GNPA % NNPA % Assets Under Management 31 Mar 2020 GNPA NNPA (%) 31 Mar 19 31 Dec 19 31 Mar 20 31 Mar 19 31 Dec 19 31 Mar 20 * Auto Finance Business 13,085 912 419 54% 5.12% 5.68% 6.47% 2.06% 2.61% 3.08% Sales Finance Business 12,657
Slide 52: NPA movement - Consolidated
NPA movement - Consolidated Values in ₹ Cr Particulars Assets Under Management 1,15,888 1,28,898 1,35,533 1,45,092 1,47,153 Opening GNPA (A) 1,691 1,804 2,094 2,213 2,354 Roll Forward into NPA (i) 593 697 779 924 994 Restructuring (ii) 14 5 7 12 43 Total Slippages (B = i + ii) 607 702 786 936 1,037
Slide 53: ECL summary Consolidated
ECL summary Consolidated Assets categorization Stage 1 & 2 (represents standard assets) 98.46% 98.40% 98.39% 98.39% 98.39% Stage 3 (represents GNPA) 1.54% 1.60% 1.61% 1.61% 1.61% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Gross Stage 1 & 2 ass
Slide 54: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited ECL categorization Stage 1 & 2 (represents standard assets) 99.95% 99.94% 99.94% 99.93% 99.92% Stage 3 (represents GNPA) 0.05% 0.06% 0.06% 0.07% 0.08% Summary of stage wise assets and ECL provisioning ₹ in Crore Financial Assets & ECL provision Gross Stage 1
Slide 55: Portfolio credit metrics - Consolidated
Portfolio credit metrics - Consolidated th previous data. 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 98.91% 99.04% 98.91% 98.96% 98.96% 98.69% 98.69% 98.54% 98.52% 98.59% 98.69% Bk
Slide 56: Portfolio credit metrics - Consolidated
Portfolio credit metrics - Consolidated th previous data. 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 97.62% 97.64% 97.69% 97.81% 97.76% 97.46% 97.21% 97.02% 97.00% Bkt 0 99.70% 99.66%
Slide 57: Portfolio credit metrics - Consolidated
Portfolio credit metrics - Consolidated th previous data. 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 99.48% 99.49% 99.40% 99.54% 99.52% 99.42% 99.61% 99.63% 99.60% Bkt 0 99.46% 99.49% 99.4
Slide 58: Covid-19 portfolio bounce performance
Covid-19 portfolio bounce performance Back 57
Slide 59: Covid-19 portfolio bounce performance
Covid-19 portfolio bounce performance Rs in Cr Average Bounce % of loans Covid Provision as AUM as of AUM under % of AUM Bounce rate Business Segment bounce rate rate of with no recent Provision % of Morat 30 Apr Moratorium under Morat of JFM bounce amount book Auto Finance * 13,726 9,611 70% 24.2%
Slide 60: FY20 Leverage risk update
FY20 Leverage risk update Back 59
Slide 61: Leverage risk methodology
Leverage risk methodology • Methodology used to calculate leverage risk of unsecured portfolios (Personal loan cross sell, Salaried personal loans, Business loans, Professional loans, Rural lending unsecured loans) • X axis represents the vintage of portfolio basis quarter of origination. For exampl
Slide 62: Leverage risk assessment of unsecured portfolios
Leverage risk assessment of unsecured portfolios Personal Loans cross sell Salaried Personal Loans 130% 125% 130% 125% 125% 120% 120% 125% 115% 112% 115% 110% 110% 105% 112% 105% 100% 100% 95% 95% 90% 90% 0M 3M 6M 9M 12M 15M 18M 21M 24M 0M 3M 6M 9M 12M 15M 18M 21M 24M Rural Personal Loans cross sell
Slide 63: Leverage risk assessment of unsecured portfolios
Leverage risk assessment of unsecured portfolios Professional Loans 125% Business loans 150% 140% 140% 135% 112% 130% 130% 125% 125% 120% 120% 115% 112% 110% 110% 105% 100% 100% 95% 90% 90% 0M 3M 6M 9M 12M 15M 18M 21M 24M 0M 3M 6M 9M 12M 15M 18M 21M 24M Rural Professional Loans • Personal loan cross
Slide 64: Thank You
BAJAJ FINANCE LIMITED Q4 FY20 Investor Presentation Thank You Back
Slide 65: 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