Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Bajaj Finance — Q2 FY21 Earnings Presentation
51 slides from Bajaj Finserv's earnings presentation, Oct 21, 2020
Slide 1: Bajaj Finance Limited Q2 FY21 Investor Presentation
Bajaj Finance Limited Q2 FY21 Investor Presentation 21 October 2020
Slide 2: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary Financial performance Customer franchise and Update on Q2 FY21 Q2 FY21 distribution reach credit quality 3 23 34 41 Section 02 Section 04 Section 06 Bajaj Finance Limited Asset liability Business segment wise overview ma
Slide 3: Section 01 Executive summary Q2 FY21
1.1 Quarter gone by Section 01 Executive summary Q2 FY21 1.2 Executive summary on Q2 FY21 3 Back
Slide 4: Quarter gone by
Quarter gone by Q2 was all about gradual unlocking of the economy. Our focus, as a continuous risk modelling to refine loss estimates, collections capacity augmentation and begin implementation of our business transformation keeping in mind a smaller aggregate economy over the next 12-18 months. AUM
Slide 5: Executive summary Q2 FY21
Executive summary Q2 FY21 Balance Sheet and Franchise: 1. The Company has restarted origination across all businesses except REMI (452K accounts - 6.9%) and wallet loans (152K accounts - 2.3%) which are on pause mode till January and March respectively. The Company booked 3.62 MM new loans during Q2
Slide 6: Executive summary Q2 FY21
Executive summary Q2 FY21 9. In Q2 FY21, the Company has converted ₹ 1,750 crore of term loans into flexi loans to provide customers the flexibility of lower repayment and higher prepayment. 10. The -COVID-19) loan originations by March / April 21. This would position the Company to take advantage o
Slide 7: Executive summary Q2 FY21
Executive summary Q2 FY21 16. The Company has now started to gradually roll back some of its actions of operating expense management. The Company has reinstated its quarterly incentive plans for its staff from Q3 onwards. However, call center optimization, freeze on travel, advertising & promotion a
Slide 8: Executive summary Q2 FY21
Executive summary Q2 FY21 24. Additionally, as a matter of prudence, the Company has reversed capitalized interest amounting to ₹142 crore on loans under moratorium. Overall amount of interest income reversed in H1 FY21 stood at ₹ 361 crore. 25. er stood at 1.03% & 0.37% respectively. Adjusted GNPA
Slide 9: Executive summary Q2 FY21
Executive summary Q2 FY21 Subsidiaries 31. Bajaj Housing Finance Ltd (BHFL) profit after tax contracted by 36% to ₹ 83 crore in Q2 FY21 against ₹ 130 crore in Q2 FY20. 32. AUM increased by 30% to ₹ 33,463 crore as of 30 September 2020 from ₹ 25,714 crore as of 30 September 2019. 33. ₹ 248 crore from
Slide 10: 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 10
Slide 11: 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% 52.74% 3 Bajaj Finance Limited Bajaj Allianz Life Bajaj Allianz General (Listed) Insurance Company L
Slide 12: 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 12
Slide 13: 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 13
Slide 14: 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 44.11 MM Strong focus on cross selling assets, payments, Centre of Excellence for eac
Slide 15: 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 7.10% Sept 20 March 20 Sept 19 Others 1 BAJAJ FINSERV LTD 52.74% 52.82% 54.81% 2 GOVERNMENT OF SINGAPORE 4.20% 4.46% 3.71% 0.74% 3 MAHARASHTRA SCOOTERS LTD. 3.15% 3.15% 3.27% 4 LIFE INSUR
Slide 16: 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 17: 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 18: 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 19: 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 20: 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 21: 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 22: 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 23: Section 03 Financial performance Q2 FY21
Financial statement summary 3.1 Consolidated Section 03 Financial statement summary Financial performance 3.2 Bajaj Finance Limited Q2 FY21 3.3 Financial statement summary Bajaj Housing Finance Limited Back 23
Slide 24: Financial statement summary Consolidated
Financial statement summary Consolidated ₹ in crore Financials snapshot Q2 FY21 Q2 FY20 YoY H1 FY21 H1 FY20 YoY FY20 Assets under management 1,37,090 1,35,533 1% 1,37,090 1,35,533 1% 1,47,153 Assets under finance 1,31,765 1,30,790 1% 1,31,765 1,30,790 1% 1,41,376 Interest income 5,763 5,463 5% 11,55
Slide 25: Financial statement summary Bajaj Finance Limited
Financial statement summary Bajaj Finance Limited ₹ in Crore Financials snapshot Q2 FY21 Q2 FY20 YoY H1 FY21 H1 FY20 YoY FY20 Assets under management 1,04,986 1,10,946 (5%) 1,04,986 1,10,946 (5%) 1,16,102 Assets under finance 1,02,525 1,07,915 (5%) 1,02,525 1,07,915 (5%) 1,13,417 Interest income 5,0
Slide 26: Financial statement summary Bajaj Housing Finance Limited
Financial statement summary Bajaj Housing Finance Limited ₹ in Crore Financials snapshot Q2 FY21 Q2 FY20 YoY H1 FY21 H1 FY20 YoY FY20 Assets under management 33,463 25,714 30% 33,463 25,714 30% 32,705 Assets under finance 29,200 22,875 28% 29,200 22,875 28% 27,975 Interest income 696 539 29% 1,387 9
Slide 27: Section 04 Asset liability management
4.1 Conservative leverage standards Bajaj Finance Limited 4.2 Resilient business model Consolidated Behaviouralized ALM as of 30 September Section 04 4.3 Bajaj Finance Limited Asset liability management 4.4 Behaviouralized ALM as of 30 September Bajaj Housing Finance Limited 4.5 Disciplined ALM Mana
Slide 28: 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 6.8 26.4% 26.6% 6.6 24.7% 25.0% 6.4 6.3 6.3 6.2 22.0% 22.6% 23.0% 20.3% 5.4 20.7% 21.3% 5.3 19.5% 19.1% 5.1 17.5% 18.0% 4.7 4.7 * 19.7% 18.7% 16.2% 16.1% 16.3% 15.0% 14.6% 14.2% 5.7% 5.0% 3.8% 4.4% 3.8%
Slide 29: Resilient business model Consolidated
Resilient business model Consolidated 47.0% 46.0% 44.6% 45.0% 43.7% 44.0% 43.1% 41.4% 41.8% 38.4% 36.0% 35.3% 35.4% 32.9% 33.3% 29.9% 28.4% 33.5% 27.8% 27.2% 27.9% 26.4% 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 8.17% 8.02% 4.2% 4.1% 3.6% 3.5% 3.7% 3.9% 4.1% 4.1% 3.3% 2.8% 2.9% @ @ @ @ M
Slide 30: Behaviouralized ALM as of 30 September 2020 BFL
Behaviouralized ALM as of 30 September 2020 BFL ₹ in Crore Particulars 1-7D 8 - 14 D 15 - 30 D >1-2M >2-3M > 3 - 6 M > 6M - 1Y > 1 - 3Y >3- 5Y >5Y Total Cash & Investments 19,441 - - 1 751 118 1,169 1,048 383 5,571 28,483 Advances 2,963 1,086 2,231 4,939 5,136 12,125 17,917 36,227 14,958 7,460 1,05,
Slide 31: Behaviouralized ALM as of 30 September 2020 BHFL
Behaviouralized ALM as of 30 September 2020 BHFL ₹ in Crore Particulars 1 -14 D 15-30 D >1 - 2 M >2 - 3 M >3 - 6 M >6M - 1 Y >1 - 3 Y > 3 - 5 Y > 5 - 7 Y > 7 - 10 Y > 10 Y Total Cash, Cash Equivalents & Investments 797 500 - 750 - - - - - - - 2,047 Advances 337 337 488 498 1,431 2,587 8,281 5,227 3,
Slide 32: Disciplined ALM Management Bajaj Finance Limited
Disciplined ALM Management Bajaj Finance Limited Cumulative gap upto 1 month Cumulative gap upto 12 month Permissible limit 300% 220% 187% 141% 119% 120% 88% 71% 96% 70% 57% 54% 44% 61% 50% 38% 48% 51% 36% 36% 16% 4% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15%* *RBI has changed permissibl
Slide 33: Liability mix over the last 9 years
Liability mix over the last 9 years Bajaj Finance Limited 5% 5% 4% 5% 5% 9% 8% 10% 8% 8% 3% 13% 4% 3% 4% 6% 4% 5% 4% 3% 6% 4% 4% 3% 7% 33% 38% 31% 35% 25% 38% 35% 38% 35% 40% 43% 30% 31% 28% 54% 34% 58% 58% 48% 53% 31% 35% 21% 21% 22% 12% 15% 6% 8% 0% 1% 4% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17
Slide 34: Section 05 Customer franchise and distribution reach
5.1 Customer franchise Section 05 Customer franchise and 5.2 Geographic presence distribution reach 5.3 Strong distribution reach Back 34
Slide 35: Customer franchise
Customer franchise Q2 FY20 Q2 FY21 Q4 FY20 38.70 MM Total Franchise 44.11 MM 42.60 MM 30.55 MM Credit segment filter 34.72 MM 33.47 MM 29.45 MM Overall Cross sell franchise 33.48 MM 32.32 MM Non delinquent 26.30 MM customers 29.63 MM 28.48 MM Cross sell franchise 22.78 MM 23.87 MM 24.13 MM (59%) * (
Slide 36: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 30 Jun 30 Sept Geographic Presence 2017 2018 2019 2020 2020 2020 Urban 377 730 927 1,035 1,049 1,134 Rural 538 602 903 1,357 1,359 1,507 Of which rural lending branches 177 219 347 527 527 527 Of which rural lending franchise 361 383 556 830 832 980 To
Slide 37: 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 30 Sept 2020 Consumer durable stores Urban 14,000+ 15,500+ 20,400+ 24,200+ 24,200+ 24,200+ Consumer durable stores Rural 5,500+ 8,200+ 14,500+ 19,600+ 19,600+ 19,600+ Digital prod
Slide 38: Section 06 Business segment wise AUM
Section 06 6.1 Business segment wise AUM as of 30 September Business segment wise AUM 6.2 Business segment wise AUM as of 30 September Mortgages Back 38
Slide 39: Business segment wise AUM as of 30 Sept 2020
Business segment wise AUM as of 30 Sept 2020 ₹ in crore Composition as Standalone as of BHFL as of Consolidated Consolidated as Assets Under Management Growth of 30 Sept 30 Sept 2020 30 Sept 2020 as of 30 Sept 2020 of 30 Sept 2019 2020 Auto Finance Business 12,687 - 12,687 11,867 7% 9% Sales Finance
Slide 40: Break-up of Mortgages AUM as of 30 September 2020
Break-up of Mortgages AUM as of 30 September 2020 ₹ in crore Bajaj Housing Finance Limited Mortgage - All Composition as Assets Under Management 30 Sept 2020 30 Sept 2019 Growth 30 Sept 2020 30 Sept 2019 Growth of 30 Sept 2020 Home Loans 21,456 16,647 29% 26,165 22,531 16% 57% Loan against property
Slide 41: Section 07 Update on credit quality
7.1 Provisioning Coverage - consolidated 7.2 NPA movement - consolidated Section 07 7.3 ECL summary consolidated Update on credit quality ECL summary Bajaj Housing 7.4 Finance Limited 7.5 Portfolio stagewise provisioning 7.6 Portfolio credit quality - Consolidated Back 41
Slide 42: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated ₹ in Crore Consol AUM PCR GNPA % NNPA % Assets Under Management GNPA NNPA 30 Sept 2020 (%) 30 Sept 19 30 Jun 20 30 Sept 20 30 Sept 19 30 Jun 20 30 Sept 20 Auto Finance Business 12,687 631 216 66% 5.57% 5.80% 4.45% 2.36% 2.21% 1.57% Sales Finance Business 7,918 31
Slide 43: NPA movement - Consolidated
NPA movement - Consolidated ₹ in Crore Particulars Assets Under Management 1,35,533 1,45,092 1,47,153 1,38,055 1,37,090 Opening GNPA (A) 2,094 2,213 2,354 2,363 1,938 Roll Forward into NPA (i) 779 924 994 138 283 Restructuring (ii) 7 12 43 2 1 Total Slippages (B = i + ii) 786 936 1,037 140 284 Roll
Slide 44: ECL summary Consolidated
ECL summary Consolidated Assets categorization Stage 1 & 2 (represents standard assets) 98.39% 98.39% 98.39% 98.60% 98.66% Stage 3 (classified as NPA) 1.61% 1.61% 1.61% 1.40% 1.03% Stage 3 (not classified as NPA) - - - - 0.31% Summary of stage wise assets and provision for impairment allowance ₹ in
Slide 45: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited ECL categorization Stage 1 & 2 (represents standard assets) 99.94% 99.93% 99.92% 99.92% 99.91% Stage 3 (classified as NPA) 0.06% 0.07% 0.08% 0.08% 0.08% Stage 3 (not classified as NPA) - - - - 0.01% Summary of stage wise assets and provision for impairment a
Slide 46: Portfolio stagewise provisioning
Portfolio stagewise provisioning ₹ in crore Gross Assets Receivable Stagewise Provision PCR % Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Auto Finance Business 9,864 3,508 818 223 809 471 2.3% 23.0% 57.6% Sales Finance Business 7,788 833 46 214 497 37 2.8% 59.6% 82.2% Con
Slide 47: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Consumer durable + Lifestyle Two & three-wheeler Stage Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1 99.04% 98.90% 98.96% 98.73% 98.60% 98.47% 98.55% 98.65% 92.10% 1 88.32% 89.68%
Slide 48: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Business & professional loans Rural Lending B2B 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 98.76% 98.82% 98.75% 98.59% 98.42% 98.35% 98.27% 93.43% 1 1 99.44% 99.54% 99.26% 98.93% 98.8
Slide 49: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Home loans Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket 1 99.40% 99.54% 99.52% 99.42% 99.61% 99.63% 99.60% 98.31% 2 0.21% 0.20% 0.22% 0.27% 0.13% 0.15% 0.11% 1.40% 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Sep'18 Dec'1
Slide 50: Thank You
BAJAJ FINANCE LIMITED Q2 FY21 Investor Presentation Thank You
Slide 51: 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