Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q1 FY21 Earnings Presentation
50 slides from Bajaj Finance's earnings presentation, Jul 21, 2020
Slide 1: Bajaj Finance Limited cover letter to exchanges
BAJAJ FINANCE LIMITED 21 July 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: Bajaj Finance Limited Q1 FY21 Investor Presentation
Bajaj Finance Limited Q1 FY21 Investor Presentation 21 July 2020
Slide 3: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary Financial performance Customer franchise and Update on Q1 FY21 Q1 FY21 distribution reach credit quality 2 25 36 43 Section 02 Section 04 Section 06 Bajaj Finance Limited Asset liability Business segment wise overview ma
Slide 4: Section 01 Executive summary Q1 FY21
1.1 Quarter gone by Section 01 1.2 Executive summary on Q1 FY21 Executive summary Q1 FY21 1.3 Update on Moratorium Back 3
Slide 5: Quarter gone by
Quarter gone by Q1 was a pandemic quarter. The focus was on employee safety, capital preservation, liquidity management, business scenario planning, opex management, collections capacity augmentation, customer propositions, business transformation framework and lastly but most importantly calibrated
Slide 6: Executive summary Q1 FY21
Executive summary Q1 FY21 Balance Sheet and Franchise: 1. Business operations were closed till 10 May 2020 and gradually restarted as local administrations eased lockdown conditions. As r 2. AUM growth moderated to 7% YoY due to lockdown. It stood at ₹ 1,38,055 crore in Q1 FY21. 3. The Company resta
Slide 7: Executive summary Q1 FY21
Executive summary Q1 FY21 9. Given the lockdown, the Company decided to convert some of its existing customers with no overdue and good repayment track record from term loan to a flexi loan for a switch fee. The Company has been offering flexi loans to its customers for the last 5 years. As of March
Slide 8: Executive summary Q1 FY21
Executive summary Q1 FY21 15. During the quarter, S&P Global has downgraded the long-term issuer credit rating from BBB-/Negative to BB+/stable and short-term rating from A-3 to B. S&P global ascribes this downgrade, to weakening economic conditions due to COVID-19 which has also led to them revisin
Slide 9: Executive summary Q1 FY21
Executive summary Q1 FY21 22. During the quarter, the Company has taken an additional contingency provision for COVID-19 of ₹ 1,450 crore taking its contingency provision for COVID-19 to ₹ 2,350 crore as of 30 June 2020. The contingency provisioning for COVID-19 is now at 10.8% of moratorium book. T
Slide 10: Executive summary Q1 FY21
Executive summary Q1 FY21 Profitability 28. Consolidated PAT for the quarter contracted by 19% YoY to ₹ 962 crore after taking contingency provision of ₹ 1,450 crore and interest income reversal of ₹ 220 crore. Pre-provision profitability remained strong. 29. The Company has revised its margin profi
Slide 11: Executive summary Q1 FY21
Executive summary Q1 FY21 34. Over the last 5 years, the Company has made significant investments in broadening its presence in payments railroad through its EMI card, Credit Card and Wallet offerings. It will accelerate integration of its sales finance ecosystem on its payment railroad. 35. y veloc
Slide 12: Update on Moratorium
Update on Moratorium ₹ in crore As on 30 April 2020 As on 30 June 2020 % of % of AUM COVID COVID + ECL AUM COVID COVID + ECL Business AUM ECL AUM ECL AUM under Provision Provision as AUM under Provision Provision as Segment under Provision under Provision Morat Amt % of Morat Morat Amt % of Morat Mo
Slide 13: Section 02 Bajaj Finance Limited overview
2.1 Bajaj group structure 2.2 What do we stand for Section 02 2.3 Our shareholder profile Bajaj Finance Limited overview 2.4 10-year financial snapshot 2.5 Product suite 2.6 Executive summary Back 12
Slide 14: 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 15: 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 14
Slide 16: 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 15
Slide 17: 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 42.95 MM Strong focus on cross selling assets, payments, Centre of Excellence for eac
Slide 18: Our shareholder profile
Our shareholder profile Top 20 investors & their holdings MF As on 30 As on 31 As on 30 S.No Name of Shareholder 7.26% Jun 20 March 20 Jun 19 Others 1 BAJAJ FINSERV LTD 52.82% 52.82% 54.81% 2 GOVERNMENT OF SINGAPORE 4.30% 4.46% 3.74% 1.08% 3 MAHARASHTRA SCOOTERS LTD. 3.15% 3.15% 3.27% 4 AXIS LONG TE
Slide 19: 10-year financial snapshot
10-year financial snapshot ₹ in crore FY18@ FY19 @ FY20@ YoY CAGR Financials snapshot @ FY11 FY12 FY13 FY14 FY15 FY16 FY17 (Consol.) (Consol.) (Consol.) (FY19 FY20) (10 yrs) Assets under management 7,573 13,107 17,517 24,061 32,410 44,229 60,196 82,422 1,15,888 1,47,153 27% 39% Income from operation
Slide 20: 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 21: 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 22: 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 23: 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 24: 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 25: 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 26: Section 03 Financial performance Q1 FY21
3.1 Financial statement summary Consolidated Section 03 Financial statement summary Financial performance 3.2 Bajaj Finance Limited Q1 FY21 3.3 Financial statement summary Bajaj Housing Finance Limited Back 25
Slide 27: Financial statement summary Consolidated
Financial statement summary Consolidated ₹ in crore Financials snapshot Q1 FY21 Q1 FY20 YoY FY20 FY19 YoY Assets under management 1,38,055 1,28,893 7% 1,47,153 1,15,888 27% Assets under finance 1,32,368 1,25,113 6% 1,41,376 1,12,513 26% Interest income 5,793 5,101 14% 22,970 16,349 40% Fee and other
Slide 28: Financial statement summary Bajaj Finance Limited
Financial statement summary Bajaj Finance Limited ₹ in Crore Financials snapshot Q1 FY21 Q1 FY20 YoY FY20 FY19 YoY Assets under management 1,06,584 1,07,949 -1% 1,16,102 98,671 18% Assets under finance 1,03,950 1,04,664 -1% 1,13,417 95,181 19% Interest income 5,101 4,642 10% 20,668 15,089 37% Fee an
Slide 29: Financial statement summary Bajaj Housing Finance Limited
Financial statement summary Bajaj Housing Finance Limited ₹ in Crore Financials snapshot Q1 FY21 Q1 FY20 YoY FY20 FY19 YoY Assets under management 32,982 21,745 52% 32,705 17,562 86% Assets under finance 28,423 20,449 39% 27,975 17,332 61% Interest income 691 457 51% 2,303 998 131% Fee and other inc
Slide 30: Section 04 Asset liability management
4.1 Conservative leverage standards Bajaj Finance Limited 4.2 Resilient business model Consolidated Behaviouralized ALM as of 30 June Section 04 4.3 Bajaj Finance Limited Asset liability management 4.4 Behaviouralized ALM as of 30 June Bajaj Housing Finance Limited 4.4 Disciplined ALM Management Baj
Slide 31: Conservative leverage standards
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 6.8 6.6 24.7% 25.0% 26.4% 6.4 6.3 6.3 6.2 22.6% 22.0% 21.3% 20.3% 20.7% 5.3 19.5% 5.4 19.1% 5.1 17.5% 18.0% 19.7% 4.7 * 18.7% 16.2% 16.1% 16.3% 15.0% 14.6% 14.2% 5.7% 5.0% 3.8% 4.4% 3.8% 3.3% 3.4% 3.7% 2.5%
Slide 32: Resilient business model Consolidated
Resilient business model Consolidated 47.0% 46.0% 44.6% 45.0% 43.1% 43.69% 41.4% 41.8% 38.4% 36.0% 35.3% 35.39% 32.9% 33.3% 29.9% 33.50% 28.4% 27.90% 26.4% 27.2% 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 8.17% 4.2% 4.1% 3.6% 3.3% 3.5% 3.7% 3.9% 4.1% 4.10% 2.80% @ @ @ Mar'12 Mar'13 Mar'14
Slide 33: Behaviouralized ALM as of 30 June 2020 BFL
Behaviouralized ALM as of 30 June 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 14,843 501 1 4 312 1,741 438 5,571 23,411 Advances 6,068 4,925 4,738 11,498 17,334 39,140 18,286 6,594 1,08,581 Other inflows 3
Slide 34: Behaviouralized ALM as of 30 June 2020 BHFL
Behaviouralized ALM as of 30 June 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 2,306 150 150 2,606 Advances 618 453 456 1,322 2,428 7,100 4,181 2,972 3,303 5,881 28,714 Other inflows 594 18 23 30 2
Slide 35: Disciplined ALM Management
Disciplined ALM Management Bajaj Finance Limited 300% Cumulative gap upto 1 month Cumulative gap upto 12 month Permissible limit 220% 141% 119% 120% 96% 70% 61% 48% 50% 51% 54% 71% 36% 36% 57% 38% 16% 4% 44% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% * *RBI has changed permissible limit for c
Slide 36: Liability mix over the last 9 years
Liability mix over the last 9 years Bajaj Finance Limited 5% 5% 4% 5% 9% 8% 10% 8% 8% 3% 13% 4% 3% 4% 3% 4% 5% 4% 6% 4% 3% 7% 31% 33% 38% 35% 25% 35% 38% 38% 40% 43% 30% 31% 54% 34% 58% 58% 48% 53% 31% 35% 21% 21% 12% 15% 0% 0% 1% 6% 8% 4% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Mar'
Slide 37: Section 05 Customer franchise and distribution reach
5.1 Customer franchise Section 05 5.2 Geographic presence Customer franchise and distribution reach 5.3 Strong distribution reach Back 36
Slide 38: Customer franchise
Customer franchise Q1 FY20 Q4 FY20* 36.94 MM Total Franchise 42.60 MM 29.09 MM Credit segment filter 33.47 MM 28.00 MM Overall Cross sell franchise 32.32 MM Non delinquent 25.18 MM customers 28.48 MM Cross sell 21.85 MM franchise 24.13 MM *The customer franchise waterfall has been kept static due to
Slide 39: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 30 Jun Geographic Presence 2017 2018 2019 2020 2020 Urban 377 730 927 1,035 1,049 Rural 538 602 903 1,357 1,359 Of which rural lending branches 177 219 347 527 527 Of which rural lending franchise 361 383 556 830 832 Total Bajaj Finance presence 915 1,
Slide 40: Strong distribution reach
Strong distribution reach Active distribution points of sale 31 Mar 2017 31 Mar 2018 31 Mar 2019 31 Mar 2020 30 Jun 2020 Consumer durable stores Urban 14,000+ 15,500+ 20,400+ 24,200+ 24,200+ Consumer durable stores Rural 5,500+ 8,200+ 14,500+ 19,600+ 19,600+ Digital product stores 5,900+ 15,900+ 22,
Slide 41: Section 06 Business segment wise AUM
Section 06 6.1 Business segment wise AUM as of 30 June - Consolidated Business segment wise AUM 6.2 Business segment wise AUM as of 30 June Bajaj Housing Finance Ltd Back 40
Slide 42: Business segment wise AUM as of 30 June 2020 - Consolidated
Business segment wise AUM as of 30 June 2020 - Consolidated ₹ crore Standalone as of BHFL as of Consolidated Consolidated as Composition as Assets Under Management Growth 30 Jun 2020 30 Jun 2020 as of 30 Jun 2020 of 30 Jun 2019 of 30 Jun 2020 Auto Finance Business 12,802 - 12,802 10,908 17% 9% Sales
Slide 43: Break-up of Mortgages AUM as of 30 June 2020
Break-up of Mortgages AUM as of 30 June 2020 ₹ crore Bajaj Housing Finance Limited Consolidated Composition as Assets Under Management 30 June 2020 30 June 2019 Growth 30 June 2020 30 June 2019 Growth of 30 June 2020 Home Loans 21,553 14,151 52% 26,637 20,358 31% 58% Loan against property 3,989 2,51
Slide 44: Section 07 Update on credit quality
2.1 Provisioning Coverage - consolidated 2.2 NPA movement - consolidated Section 07 Update on credit quality 2.3 ECL summary consolidated 2.4 ECL summary Bajaj Housing Finance Limited Back 43
Slide 45: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated Values in ₹ Cr Consol AUM PCR GNPA % NNPA % Assets Under Management GNPA NNPA 30 Jun 2020 (%) 30 Jun 19 31 Mar 20 30 Jun 20 30 Jun 19 31 Mar 20 30 Jun 20 Auto Finance Business 12,802 822 301 63% 5.19% 6.47% 5.80% 2.14% 3.08% 2.21% Sales Finance Business 9,231 109
Slide 46: NPA movement - Consolidated
NPA movement - Consolidated Values in ₹ Cr Particulars Assets Under Management 1,28,898 1,35,533 1,45,092 1,47,153 1,38,055 Opening GNPA (A) 1,804 2,094 2,213 2,354 2,363 Roll Forward into NPA (i) 697 779 924 994 138 Restructuring (ii) 5 7 12 43 2 Total Slippages (B = i + ii) 702 786 936 1,037 140 R
Slide 47: ECL summary Consolidated
ECL summary Consolidated Assets categorization Stage 1 & 2 (represents standard assets) 98.40% 98.39% 98.39% 98.39% 98.60% Stage 3 (represents GNPA) 1.60% 1.61% 1.61% 1.61% 1.40% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Gross Stage 1 & 2 ass
Slide 48: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited ECL categorization Stage 1 & 2 (represents standard assets) 99.94% 99.94% 99.93% 99.92% 99.92% Stage 3 (represents GNPA) 0.06% 0.06% 0.07% 0.08% 0.08% Summary of stage wise assets and ECL provisioning ₹ in Crore Financial Assets & ECL provision Gross Stage 1
Slide 49: Thank You
BAJAJ FINANCE LIMITED Q1 FY21 Investor Presentation Thank You Back
Slide 50: 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