Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q4 FY22 Earnings Presentation
61 slides from Bajaj Finserv's earnings presentation, 2022
Slide 1: Investor Presentation Q4 FY22
BAJAJ FINSERV LIMITED Investor Presentation Q4 FY22* * Financial year 2021-22
Slide 2: Bajaj Group Structure
Bajaj Group Structure Bajaj Holdings & Investment Limited (Listed) @ 33.43%2 @ 39.16%1 51% Bajaj Auto Limited (Listed) Maharashtra Scooters Limited (Listed) Bajaj Finserv Limited (Listed) Auto Business Arm Auto spare parts Manufacturer Financial Services Arm 52.49%3 74% 74% 80.1% 100% Bajaj Allianz
Slide 3: Bajaj Vision
Bajaj Vision A diversified financial services group with a pan-India presence Life cycle Family, needs of Investment/ Asset Asset Health & Individual & Wealth Retirement acquisition protection Income SME management Protection customers General, Health & Life ULIPs*, Fixed Loan (Personal, General Ins
Slide 4: Bajaj Finserv Established businesses with strong track record
Bajaj Finserv Established businesses with strong track record ❑ Non-Bank with strategy & structure of a bank ❑ Diversified financial services strategy with an optimal mix of risk Bajaj Finance and sustainable profit Limited ❑ Focused on mass affluent & above with a strategy to cross-sell with smart
Slide 5: Bajaj Finserv Emerging Opportunities
Bajaj Finserv Emerging Opportunities ❑ Health Tech venture - aims to transform healthcare sector in India ❑ Integrating the fragmented healthcare delivery ecosystem with Bajaj Finserv Health technology and financial services on a digital platform to bring Limited quality healthcare closer to consume
Slide 6: Role of Bajaj Finserv
Role of Bajaj Finserv ▪ Monitor and engage with our companies with the objective of long-term sustainable profit, meaningful market share, and effective use of capital - thereby delivering superior shareholder returns ▪ We do this by driving companies to create institutionalized frameworks through a
Slide 7: Bajaj Finserv performance highlights Q4 FY22
Bajaj Finserv performance highlights Q4 FY22 All Figures in Rs Million Performance Highlights of Q4 FY22 over Q4 FY21 (Ind AS) 188,617 13,461 402,468 43,682 CY 23% 37% 12% 15% PY 153,869 9,791 358,300 38,009 Total Revenue PAT* Net Worth Net Worth (Consolidated) (Consolidated) (Consolidated) (Standal
Slide 8: Consolidated profit components Q4 FY22
Consolidated profit components Q4 FY22 All Figures in Rs Million Consolidated profit components for Q4 FY22 (Ind AS) Adjustments (Net of Tax)# Intercompany ❑ Unrealized MTM* Loss on BAGIC Investments Rs. 80 Mn adjustments ❑ Unrealized MTM Loss on BALIC Investments Rs. 830 Mn Bajaj Finserv- Standalon
Slide 9: FY22 Highlights
FY22 Highlights All Figures in Rs Million Highlights of Group Companies BAJAJ FINSERV # FY22 FY21 Growth BAJAJ FINANCE # FY22 FY21 Growth Total Revenue 684,060 605,912 13% AUM 1,974,517 1,529,471 29% Net worth 402,468 358,300 12% Total Income 316,404 266,831 19% PAT 45,568 44,705 2% PAT 70,282 44,19
Slide 10: Key new initiatives towards furtherance of ESG
Some key new initiatives during the year towards furtherance of ESG Mega Vaccination drive to Installation of rooftop solar administer over 1 Million doses of Adoption of Responsible generation plants at 3 offices and the COVID-19 vaccine to the Investment principles by raw hard water treatment plan
Slide 11: Illustrations on some of our ESG focus areas
Illustrations on some of our ESG focus areas Reaching Financial Services to Preserving and Protecting Governance Million of Indians Environment • •Crop insurance to 6.6+ million •Renewable power generated is sustainable business conduct policy farmers in last 4 years more than the electricity consum
Slide 12: Bajaj Finance Limited
BAJAJ FINSERV Bajaj Finance Limited
Slide 13: BFL Key Strategic Differentiators
BFL Key Strategic Differentiators STRATEGY • Diversified financial services strategy seeking to optimise risk and profit, to deliver a sustainable business model and deliver a superior ROE and ROA • Focused on continuous innovation to transform customer experience to create growth opportunities. DIF
Slide 14: BFL: Business Segments
BFL : Business Segments BAJAJ FINANCE Consumer SME Commercial Rural • Largest consumer • Focused on affluent • Wholesale Lending • Unique hub-and-spoke electronics, digital SMEs with an average products covering short, model in 2,136 locations products & lifestyle lender annual sales of around mediu
Slide 15: BFL Key Highlights
BFL Key Highlights Q4 2021-22 ▪ Q4 FY22 AUM was at Rs. 1,974,517 Mn vs Rs. 1,529,471 Mn last year (29% growth); Core AUM* accretion in Q4 FY22 was approximately ~ Rs. 108,370 Mn AUM & Business ▪ 6.28 Mn new loans in Q4 FY22 as against 5.47 Mn in Q4 FY21 Franchise Growth ▪ Acquired 2.21 Mn new custom
Slide 16: BFL Key Highlights
BFL Key Highlights Q4 2021-22 ▪ Loan losses & provisions for the Q4 FY22 were Rs. 7,016 Mn vs Rs. 12,308 Mn in Q4 FY21 ▪ FY22 loan losses and provisions were Rs. 48,034 Mn (vs Rs. 59,686 Mn in FY21) in line with earlier guidance Credit Costs ▪ Continues to carry a management overlay of ~Rs. 10,600 M
Slide 17: BFL Subsidiaries Key Highlights
BFL Subsidiaries Key Highlights Bajaj Housing Finance Limited (BHFL) ▪ AUM increased by 37% to Rs. 533,217 Mn as of 31 Mar 2022 from Rs. 388,709 Mn as of 31 Mar 2021 ▪ Net Interest Income for Q4 FY22 increased by 22% to Rs. 4,517 Mn AUM & NIM Metrics from Rs. 3,695 Mn in Q4 FY20; FY22 NII increased
Slide 18: BFL Q4 FY22 Highlights
BFL Q4 FY22 Highlights All Figures in Rs Million Performance Highlights of Q4 FY22 over Q4 FY21 (Ind AS) CY 1,914,233 86,303 24,195 30% 26% 80% PY 1,466,869 68,549 13,466 Book Size Total Income Profit After Tax CY 1.3% 5.7% Borrowing mix as of 31 March 2022 is 28:50:19:3 between banks, money markets
Slide 19: BFL: Book Size and Revenue
BFL : Book Size and Revenue All Figures in Rs Million Book Size Total Income FY22 growth of 30% FY22 growth of 19% Q4 FY22 316,404 growth of 26% 1,914,233 263,856 266,831 1,413,760 1,466,869 68,549 86,303 FY20 FY21 FY22 FY20 FY21 FY22 Q4 FY21 Q4 FY22 Net Interest Income FY22 growth of 27% Q4 FY22 gr
Slide 20: BFL: Loan Loss Provision and Operating Expenses
BFL : Loan Loss Provision and Operating Expenses All Figures in Rs Million Loss Provision and Net NPA% ❑ GNPA and NNPA as on 31 March 2022 stood at 59,686 2.00% 1.60% & 0.68% respectively as compared to 60,000 48,034 1.73% and 0.78% as on 31 December 2021 45,000 ❑ Provisioning coverage ratio (PCR) o
Slide 21: Bajaj Allianz General Insurance
Bajaj Allianz General Insurance 21
Slide 22: BAGIC Key Strategic Differentiators
BAGIC Key Strategic Differentiators STRATEGY Strive for market share growth in chosen segments through a well-diversified product portfolio and multi-channel distribution supported by prudent underwriting DIFFERENTIATORS ▪ Industry leading combined ratios consistently over Strong selection of Risk &
Slide 23: BAGIC Key Highlights
BAGIC Key Highlights Q4 2021-22 ▪ Industry beating GDPI growth of 17.8% in Q4 FY22 as against Industry# growth of 7.8%; 8.9% growth in FY22 vs industry growth of 8.8% Revenue Growth ▪ Ex. Crop & Govt. Health, Q4 FY22 GDPI grew by 6.0%; For FY22, the Ex. Crop & Govt. Health GDPI growth was 9.1% ▪ Ex.
Slide 24: BAGIC Key Highlights
BAGIC Key Highlights Q4 2021-22 ▪ Q4 FY22 PAT de-grew by 9% mainly on account of lower capital gains (Rs. 27 Mn vs Rs. 210 Mn in PY) Profit after tax (PAT) ▪ FY22 PAT grew to Rs. 13,391 Mn despite impact of higher COVID claims in FY22 as compared to FY21 and OD releases from lockdown in FY21 - highe
Slide 25: BAGIC: Q4 FY22 Highlights
BAGIC : Q4 FY22 Highlights All Figures in Rs Million Performance Highlights of Q4 FY22 over Q4 FY21 CY 32,998 CY 28,708 20,727 19,884 18% 7% 6% 11% PY 27,874 PY 26,915 19,635 17,944 Gross Written GWP Excl. Crop & Net Written Premium Net Earned Premium Premium Govt. Health 2,480 3.0% -9% 2,729 3.9% P
Slide 26: BAGIC: Combined Ratio
BAGIC : Combined Ratio Combined Ratios (Including Motor TP Pool Losses) 100.8% 99.6% 98.3% 96.7% 96.9% 96.6% 92.3% FY18 FY19 FY20 FY21 FY22 Q4 FY21 Q4 FY22 1. Combined Ratios are in accordance with the Master Circular on of Financial statements of General Insurance issued by IRDA effective from 1st
Slide 27: BAGIC: Profit after tax and Capital efficiency
BAGIC : Profit after tax and Capital efficiency All Figures in Rs Million PAT 13,301 13,391 9,988 Q4 FY22 PAT de-growth of 9% 9,212 7,799 2,729 2,480 FY18 FY19 FY20 FY21 FY22 Q4 FY21 Q4 FY22 BAGIC - Capital Invested - Networth Accumulated profit* 97% of Net worth as on 31 Mar 2022 Total Capital infu
Slide 28: BAGIC: Consistently amongst top private insurers in Gross Premium
BAGIC : Consistently amongst top 2 private insurers in terms of Gross Premium Industry GDPI Trend (Rs. Bn.) Q4 FY22 GDPI growth of 10% 2,057 1,787 1,856 1,617 1,415 1,138 1,306 930 1,056 737 504 553 678 687 730 718 751 315 373 189 180 FY18 FY19 FY20 FY21 FY22 Q4 FY21 Q4 FY22 PSU Private Insurers* In
Slide 29: BAGIC: Balanced Product Mix
BAGIC : Balanced Product Mix Business Mix 9% 8% 11% 13% 14% 4% 11% 20% 19% 15% 20% 19% 13% 18% 19% 9% 9% 10% 9% 9% 10% 7% 5% 6% 6% 49% 41% 38% 42% 35% FY20 FY21 FY22 Q4 FY21 Q4 FY22 Motor (Retail) Health (Retail) Group Health Prop, Liability, Engg Agri (Crop Insurance) Others ▪ -crop & govt. health
Slide 30: BAGIC: Diversified Channel Mix
BAGIC: Diversified Channel Mix Channel Mix 10% 19% 27% 27% 30% 51% 37% 47% 42% 42% 4% 3% 3% 3% 2% 13% 12% 10% 10% 12% 20% 18% 16% 23% 19% FY20 FY21 FY22 Q4 FY21 Q4 FY22 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business Bancassurance Agency & Retail OEMs & D
Slide 31: BAGIC: Assets Under Management
BAGIC : Assets Under Management AUM (cash and investments) FY22 growth of 6% 246,329 BAGIC 231,502 continues to grow its AUM 187,458 strongly 172,367 148,229 Rs. Million Investments are largely in fixed income securities Investment Leverage of 2.79 as on 31 March 2022 FY18 FY19 FY20 FY21 FY22 98.9%
Slide 32: Key Technology Initiatives of FY 21-22 - 1/2
Key Technology Initiatives of FY 21-22 - 1/2 Digital Journey Metrics Digital Onboarding (Agents) FY Digital Issuance FY 21-22 21-22 From 100% in FY 20-21 -> 100% From 96.70% in FY 20-21 -> 94.48% Digital Policy FY 21-22 Digital Renewal Notice FY 21-22 From 93.51% in FY 20-21 -> 93.61% From 100% in F
Slide 33: Key Technology Initiatives of FY 21-22 - 2/2
Key Technology Initiatives of FY 21-22 - 2/2 Existing Digital Capabilities Enhanced & Scaled-up Website Caringly Yours App Digital Payments Our website is now available in 7 Our Customer facing app remains as Capabilities for EMI payment (e- different languages for our the most used app in Insurance
Slide 34: BAGIC: Risk Management
BAGIC : Risk Management Asset Quality Pricing & Underwriting ▪ 98.9% of the debt portfolio in AAA and ▪ Superior underwriting capability leading to sovereign assets low Combined Ratio consistently ▪ 91.2% of Equity in Nifty 50 stocks & 95.5% in ▪ Diversified exposure across business lines & BSE100 s
Slide 35: Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance 35
Slide 36: BALIC Key Strategic Differentiators
BALIC Key Strategic Differentiators STRATEGY • Continued focus on sustainable and profitable growth by maintaining balanced product mix and investment in retail growth engines • Business construct is to maximize customer benefits while gaining market share in retail space, maintaining shareholder re
Slide 37: BALIC Key Highlights
BALIC Key Highlights Q4 2021-22 ▪ IRNB grew by 36% in Q4 FY22(vs Private Players ~9%); IRNB grew by 49% in FY22 (vs Private players growth of 22%) ▪ Fastest growth among the top 10 Private Players in FY22 as well as in Revenue Growth & Q4 FY22 Market Share ▪ FY22 market share(IRNB terms) increased b
Slide 38: BALIC Key Highlights
BALIC Key Highlights Q4 2021-22 ▪ PAT for Q4 FY22 stands at Rs. 483 Mn as against Rs. 2,339 Mn in Q4 FY21 ▪ On account of lower investment income & higher new business strain on account of higher business growth ▪ FY22 PAT stands at Rs. 3,244 Mn as against Rs. 5,803 Mn in FY21 ▪ On account of higher
Slide 39: BALIC Q4 FY22 Highlights
BALIC Q4 FY22 Highlights All Figures in Rs. Million Performance Highlights of Q4 FY22 over Q4 FY21 CY 13,470 17,807 24,825 57,187 36% 21% 24% 27% PY 9,888 14,711 20,085 45,013 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 483 3,075 581% Solvency Ratio as at -79% 40% 31 Mar 20
Slide 40: BALIC Growth momentum continues
BALIC Growth momentum continues All Figures in Rs Million New Business Renewals GWP 91,364 69,906 161,271 2 years CAGR* at 57,116 2 years CAGR* at 2 years CAGR* at 63,132 120,248 46% 24% 35% 32,362 24,825 57,187 24,928 20,085 45,013 16,091 31,283 15,192 FY21 FY22 Q4 FY20 Q4 FY21 Q4 FY22 FY21 FY22 Q4
Slide 41: BALIC: Balanced product mix
BALIC : Balanced product mix IRNB Mix Share of Annuity stands at 9% in Q4 FY22 and 11% in FY22 41% 39% 44% 36% 51% Individual - Unit Linked 3% 2% Individual - Non Par Protection 6% 3% 1% 27% 33% Individual - Non Par Savings 20% <1% 29% 24% Individual - Annuity 2% 11% 4% 9% Individual - Par 28% 23% 2
Slide 42: BALIC: Persistency
BALIC : Persistency Persistency 13th Month Persistency 25th Month 82% 74% 68% 71% 71% 80% 80% 58% 79% 77% Persistency - 13th Month Persistency - 25th Month FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 Persistency 37th Month Persistency 49th Month Persistency 61st Month 63% 66% 62% 55% 58% 54% 4
Slide 43: BALIC: Individual Rated New Business
BALIC : Individual Rated New Business All Figures in Rs Million Whole Company Agency FY22 growth of 49% FY22 growth of 36% 36,861 14,890 Q4 FY22 growth Q4 FY22 growth of 36% of 12% 10,977 24,676 Agency continues to stride Industry beating growth ahead with substantial growth 13,470 4,695 9,888 4,195
Slide 44: BALIC: Diversified Distribution Mix
BALIC : Diversified Distribution Mix Individual Rated New Business Channel- ❑ BALIC embarked on diversifying its distribution wise Mix mix, scaling up alternate channels and enabling wider presence by exploring alternate partnerships 11% 11% 9% 11% 9% ❑ Greater balance between institutional and 33%
Slide 45: Digital Initiatives to offer best in class customer experience
Digital Initiatives to offer best in class customer experience Digital asset BALIC Innovations usage CDP (Customer Data i-Recruit Platform) Life Assist App 322% increase in Dynamic engine to target 26% increase in unique users as on customers and build transactions in FY22 over FY22 sharper use case
Slide 46: BALIC: Assets Under Management (AUM) & Net Worth
BALIC : Assets Under Management (AUM) & Net Worth AUM (Mix) • AUM as of 31 March 2022 grew by 16%; Growth in UL AUM 856 stands at 16%; Traditional AUM 738 grew by 16% 561 Rs Billion 522 566 449 • Of the UL Funds of 334 Bn, 71% 520 336 365 334 306 289 is equity as on 31 March 2022 214 230 196 (65% as
Slide 47: BALIC: MCEV Update
BALIC: MCEV Update #$ All Figures in Rs Million Particulars FY 22 FY 21 Annualized Premium** (ANP) 43,639 29,223 Net New Business Value* (NBV) 6,212 3,608 Net Margins on ANP (Post overruns) 14.2% 12.3% Embedded Value++ (EV) 172,494 155,345 • One-year forward rates derived from the risk free yield cu
Slide 48: BALIC: MCEV Analysis of Movement
BALIC: MCEV Analysis of Movement All Figures in Rs. Million 120 381 945 1,027 1,371 172,494 6,212 11,725 155,345 EVOP : Rs. 18,438 Mn RoEV excl. one-time COVID-19 claims/reserves & tax impact: 11.9% As at Unwinding Net NBV Operational Assumption One-Offs : Investment Capital As at 31st Mar 2021 Vari
Slide 49: BALIC: Risk Management
BALIC: Risk Management ❑ Prudent assumptions while product pricing ❑ Stress and scenario testing performed at pricing stage Product Pricing ❑ Regular review of pricing based on prevailing interest rates ❑ ALM focused on cashflow matching & achieving an immunized portfolio ❑ Interest rate risk on the
Slide 50: Additional Information BAGIC
Additional Information BAGIC
Slide 51: BAGIC: Investment Performance
BAGIC : Investment Performance All Figures in Rs Billion Total Funds Investment Leverage ❑ Investment Portfolio 3.32 3.34 3.32 3.08 2.79 mix for Q4 FY22: Corporate bonds 35.5%, 230.2 244.0 187.8 G-Sec 47.1%, Equity 168.6 140.2 8.8%, and Money Market 8.6% ❑ Unrealized gain of Rs. FY18 FY19 FY20 FY21
Slide 52: BAGIC: LOB Net Loss ratio
BAGIC : LOB Net Loss ratio Net Loss Ratio Net Loss Ratio Line of Business Q4 FY22 Q4 FY21 FY22 FY21 Fire 12.9% 17.2% 57.1% 54.5% Marine Cargo 42.9% 57.2% 64.0% 66.0% Motor OD 67.6% 66.0% 65.1% 54.0% Motor TP 66.8% 79.6% 71.2% 78.1% Motor Total 67.2% 73.7% 68.5% 68.1% Engineering -2.7% 0.8% 49.7% 36.
Slide 53: BAGIC: LOB Growth (Major LOBs)
BAGIC : LOB Growth (Major LOBs) BAGIC GDPI Growth Line of Business Q4 FY22 FY22 Fire & Engineering 11.3% 15.6% Marine 23.4% 27.3% Motor OD -4.6% 0.4% Motor TP 3.0% 4.1% Motor Total -0.2% 2.5% Liability 33.4% 16.1% Personal Accident + Travel 25.2% 19.9% Health (retail + group)*# 12.3% 17.3% Crop 183.
Slide 54: BAGIC: Loss Triangle: Whole Account Excluding IMTPIP
BAGIC : Loss Triangle : Whole Account Excluding IMTPIP on Net Basis as at 31 March 2022 Accident Year Cohort Particulars (Rs. Mn) 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 12 and 13 14 15 16 17 18 19 20 21 22 Prior A] Ultimate Net loss Cost - Original Es
Slide 55: BAGIC: Loss Triangle: Whole Account Excluding IMTPIP
BAGIC : Loss Triangle : Whole Account Excluding IMTPIP on Net Basis as at 31 March 2022 Accident Year Cohort Particulars (Rs. Mn) 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 31-Mar- 12 and 13 14 15 16 17 18 19 20 21 22 Prior A] Ultimate Net loss Cost - Original Es
Slide 56: BAGIC: Loss Triangles - IMTPIP reserving
BAGIC : Loss Triangles - IMTPIP reserving • The IMTPIP came to operation on 1st April 2007 exclusively for third party claims in respect of commercial vehicles. All insurers registered to carry on non-life insurance business including motor business were automatically required to participate in the
Slide 57: Additional Information BALIC
Additional Information BALIC
Slide 58: BALIC: Investment Performance (Shareholder Fund)
BALIC : Investment Performance (Shareholder Fund) All Figures in Rs Billion AUM~ ❑ Asset mix as on 31 March 2022: 109.9 102.3 Corporate Bonds 24%, Long 91.9 94.9 85.2 Dated G-Sec 37%, T-Bills 17% and Equity 15% (on Market value basis) ❑ Capital gains booked in FY22 were Rs. 1.87 billion^ ▪ In Q4 FY2
Slide 59: BALIC: Regular Premium Ticket Size
BALIC : Regular Premium Ticket Size All Figures in Rs. Whole Company Non Par Savings FY22 Q4 FY22 FY22 Q4 FY22 increase of 34% increase of 13% increase of 41% increase of 55% 77,634 80,763 62,405 71,788 61,716 51,650 57,782 36,579 40,189 27,437 FY20 FY21 FY22 Q4 FY21 Q4 FY22 FY20 FY21 FY22 Q4 FY21 Q
Slide 60: Thank You
BAJA FINSERV Thank You
Slide 61: Disclaimer
Disclaimer This presentation has been prepared by Bajaj Finserv Limited (the solely for your information and for your use. This presentation is for information purposes only and should not be deemed to constitute or form part of any offer or invitation or inducement to sell or issue any securities,