Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q2 FY20 Earnings Presentation
50 slides from Bajaj Finance's earnings presentation, Oct 22, 2019
Slide 1: Exchange filing cover letter
BAJAJ FINANCE LIMITED 22 October 2019 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: 500
Slide 2: Q2 FY20 Investor Presentation
Bajaj Finance Limited Q2 FY20 Investor Presentation 22 October 2019
Slide 3: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary Financial performance Customer Franchise and Bajaj Housing Finance Q2 FY20 Q2 FY20 distribution reach Limited overview 3 16 24 30 Section 02 Section 04 Section 06 Section 08 Bajaj Finance Limited Asset liability Business
Slide 4: Executive summary Q2 FY20
Section 01 Executive summary Q2 FY20 3
Slide 5: Executive summary Q2 FY20
Executive summary Q2 FY20 1. We continued to remain focused on growth, profitability & sustainability. We continued to strengthen our business model in Q2 FY20 as well. 2. AUM grew by 38% YoY to ₹ 135,533 crore as of 30 September 2019. New loans booked grew by 23% YoY to 6.47 MM. Overall, Q2 FY20 ha
Slide 6: Executive summary Q2 FY20
Executive summary Q2 FY20 12. Loan loss and provisions (expected credit loss) grew by 89% YoY in Q2 FY20. Loan loss to average asset under finance (AUF) stood at 1.86% in Q2 FY20 in line with Q1 FY20. 13. Consolidated operating expenses to net interest Income improved to 34.6% in Q2 FY20 as against
Slide 7: Bajaj Finance Limited overview
Section 02 Bajaj Finance Limited overview 6
Slide 8: Bajaj group structure
Bajaj group structure Bajaj Holdings & Investment Limited (BHIL) (Listed) *35.77% 1 @41.63% 2 Bajaj Auto Limited Bajaj Finserv Limited (Listed) (Listed) Auto business arm Financial services arm 74% 74% 54.81% 3 Bajaj Finance Limited Bajaj Allianz Life Bajaj Allianz General (Listed) Insurance Company
Slide 9: What do we stand for
What do we stand for - a sustainable ROA and ROE in the medium term 8
Slide 10: 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 38.70 MM and cross sell franchise Focus on mass affluent and above clients of 22.78 MM Centre of Excellence for each business
Slide 11: Our Shareholder profile
Our Shareholder profile Top 20 investors & their holdings MF As on 30 As on 31 As on 30 7.12% S.No Name of Shareholder Sep 19 Mar 19 Sep 18 Others 1 BAJAJ FINSERV LTD 54.81% 54.99% 54.99% 2 GOVERNMENT OF SINGAPORE 3.71% 3.68% 3.62% 1.91% 3 MAHARASHTRA SCOOTERS LTD. 3.27% 3.28% 3.28% 4 STEADVIEW CAPI
Slide 12: 12 year financial snapshot
12 year financial snapshot 58.1% 6,179 12 Year CAGR: AUM 42% and PBT 62% 7.05% 38.7 50.6% 34.5 3,843 3,874 47.0% 46.0% 5.50% 44.8% 44.4% 44.6% 45.0% 43.1% 2,818 26.2 41.4% 1,965 40.2% 20.1 1,357 1,091 16.1 872 35.3% 34.8% 602 12.9 370 30 51 134 2.20% 10.1 8.1 6.4 4.9 2.9 3.7 2.5 0.63% 0.65% 0.80% 0.
Slide 13: Product suite
Product suite BAJAJ FINANCE LIMITED Consumer SME Commercial Rural Deposits Partnerships & Services • Consumer Durable Loans • Unsecured Working • Loan against securities • Consumer Durable • Retail Term • Life Insurance Capital Loans (E) Loans Deposits Distribution • Digital Product Loans (E) • Larg
Slide 14: Executive summary Consolidated
Executive summary Consolidated Overview • 32 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 15: Executive summary Standalone
Executive summary Standalone 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 cross sell, c
Slide 16: Executive summary Standalone
Executive summary Standalone 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 established financ
Slide 17: Financial performance Q2 FY20
Section 03 Financial performance Q2 FY20 16
Slide 18: Financial statement summary Consolidated
Financial statement summary Consolidated ₹ in crore Financials snapshot Q2 FY20 Q2 FY19 Y-o-Y H1 FY20 H1 FY19 Y-o-Y FY19 Assets under management 1,35,533 98,013 38% 1,35,533 98,013 38% 115,888 Assets under finance 1,30,790 94,478 38% 1,30,790 94,478 38% 1,12,513 Interest income 5,462 3,795 44% 10,56
Slide 19: Asset liability management
Section 04 Asset liability management 18
Slide 20: Behaviouralized ALM snapshot as of 30 September 2019 BFL
Behaviouralized ALM snapshot as of 30 September 2019 BFL 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 5,135 1 1 4 83 423 1,248 3,932 10,829 Advances 8,551 6,412 6,220 14,555 18,718 38,282 13,270 4,105 1,10,113 Other infl
Slide 21: Disciplined ALM Management over the last years
Disciplined ALM Management over the last 8 years 214% 0% Cumulative gap upto 1m Cumulative gap upto 12m Permissable limit -2 -4 141% 119% 120% -6 96% -8 71% -1 57% 48% 61% 50% 44% 38% 36% 51% 39% 44% -1 36% 29% 16% 4% -1 -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -1 20
Slide 22: Liability mix over the last 8 years
Liability mix over the last 8 years.. 8% 5% 5% 8% 8% 8% 9% 10% 11% 13% 4% 3% 3% 4% 6% 5% 4% 3% 7% 4% 31% 33% 38% 35% 25% 38% 35% 35% 40% 43% 34% 34% 35% 58% 58% 54% 48% 53% 31% 35% 12% 15% 16% 18% 0% 0% 1% 4% 6% 8% @ @ @ Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Jun'19 Sep'19 Deposits
Slide 23: Conservative leverage standards
Conservative leverage standards % 8. 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 6.8 6.6 * 6.6 7. % 6.4 6.6 6.3 6.2 6.3 24.7% 22.0% 6. 5.4 % 5.3 20.3% 20.7% 5. 19.1% 19.5% 19.7% 19.5% 19.7% 18.7% 17.5% 18.0% % 16.2% 16.1% 16.3% 15.9% 4. 15.0% 15.5% 14.2% 14.6% 3. % 5.7% 2. 5.0% 3.8% 4.4% 4.0% 3.8% % 3.3
Slide 24: Resilient business model
Resilient business model 47.0% 46.0% 44.6% 45.0% 43.1% 41.4% 41.8% 36.0% 38.4% 35.3% 35.0% 34.8% 32.9% 33.3% 30.9% 31.4% 29.9% 28.4% 26.4% 27.2% 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.49% 8.38% 4.2% 4.1% 3.7% 3.9% 4.1% 4.0% 4.7% 3.6% 3.3% 3.5% @ @ @ ROA COF Fee Income to PBT Operating Lev
Slide 25: Customer franchise and distribution reach
Section 05 Customer franchise and distribution reach 24
Slide 26: Customer franchise
Customer franchise Q2 FY19 Q2 FY20 Q1 FY20 30.05 MM Total Franchise 38.70 MM 36.94 MM 23.13 MM Credit segment filter 30.55 MM 29.09 MM 22.17 MM Overall Cross sell franchise 29.45 MM 28.00 MM Non delinquent 20.08 MM customers 26.30 MM 25.18 MM Cross sell franchise 17.82 MM 22.78 MM Addition of 0.93 M
Slide 27: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 30 Jun 30 Sep Geographic Presence 2016 2017 2018 2019 2019 2019 Urban 262 377 730 927 944 956 Rural 397 538 602 903 951 1,041 Of which rural lending branches 105 177 219 347 385 427 Of which rural lending franchise 292 361 383 556 566 614 Total Bajaj F
Slide 28: Strong distribution reach
Strong distribution reach Active distribution points of sale 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Mar 2019 30 Jun 2019 30 Sep 2019 Consumer durable stores Urban 9,400+ 14,000+ 15,500+ 20,400+ 22,000+ 22,900+ Consumer durable stores Rural 3,200+ 5,500+ 8,200+ 14,500+ 15,200+ 16,400+ Digital product
Slide 29: Business segment wise AUM
Section 06 Business segment wise AUM 28
Slide 30: Business segment wise AUM as of 30 September 2019
Business segment wise AUM as of 30 September 2019 ₹ crore Standalone as of BHFL as of Consolidated Consolidated Composition as Assets Under Management Growth 30 Sep 2019 30 Sep 2019 as of 30 Sep 2019 as of 30 Sep 2018 of 30 Sep 2019 Consumer B2B -Auto Finance Business 11,867 - 11,867 7,377 61% 9% Co
Slide 31: Bajaj Housing Finance Limited Overview
Section 07 Bajaj Housing Finance Limited Overview 30
Slide 32: 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 33: 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 LRD transactions are backed by rentals through escrow mechanism • Ticket size of l
Slide 34: Portfolio Composition - Bajaj Housing Finance Limited
Portfolio Composition - Bajaj Housing Finance Limited ₹ in Crore Product Category Home Loan Portfolio Customer Categorisation Others Rural 790 1,290 Self-Employed 3% DF 5% 2,057 1,301 12% 5% LRD 2,651 10% LAP 3,040 Home Loan 12% 16,642 65% Salaried 15,088 88% Salaried focused home loans acquisition
Slide 35: Customer Profile Bajaj Housing Finance Limited
Customer Profile Bajaj Housing Finance Limited Home Loan Loan Against Property Average Loan Size Overall 39 lakhs 28 lakhs Average Loan Size Urban 41 lakhs 46 lakhs Average Loan Size Rural 18 lakhs 12 lakhs LTV (at origination) 70% 47% Average Loan Term Overall 18 years 11 years Average Customer Age
Slide 36: Financial statement summary Bajaj Housing Finance Limited
Financial statement summary Bajaj Housing Finance Limited ₹ in Crore Financials snapshot Q2 FY20 Q2 FY19 H1 FY20 H1 FY19 FY19 Assets under management 25,714 10,653 25,714 10,653 17,562 Assets under finance 22,875 10,653 22,875 10,653 17,332 Interest income 539 204 996 319 998 Fee and other income 96
Slide 37: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited ECL categorization Stage 1 & 2 (represents standard assets) 99.98% 99.97% 99.95% 99.94% 99.94% Stage 3 (represents GNPA) 0.02% 0.03% 0.05% 0.06% 0.06% Summary of stage wise assets and ECL provisioning ₹ in Crore Financial Assets & ECL provision Gross Stage 1
Slide 38: Behaviouralized ALM snapshot as of 30 September 2019 - BHFL
Behaviouralized ALM snapshot as of 30 September 2019 - 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 to 7 yr >7 to 10 yr >10 yr Total Cash & Investments 2,843 - - - - - - - - - 2,843 Advances 374 217 217 643 1,275 4,797 3,598 2,744 3,143 5,998 23,007 Other inf
Slide 39: Update on credit quality
Section 08 Update on credit quality 38
Slide 40: Credit Quality Provisioning Coverage
Credit Quality Provisioning Coverage Values in ₹ Cr Consolidated GNPA % NNPA % PCR Assets Under Management AUM GNPA NNPA (%) 30 Sep 18 30 Jun 19 30 Sep 19 30 Sep 18 30 Jun 19 30 Sep 19 30 Sep 2019 Auto Finance Business 11,867 704 289 58.9% 5.76% 5.19% 5.57% 2.24% 2.14% 2.36% Sales Finance Business 1
Slide 41: NPA movement - consolidated
NPA movement - consolidated Values in ₹ Cr Particulars Assets Under Management 98,013 1,07,508 1,15,888 1,28,898 1,35,533 Opening GNPA (A) 1,280 1,471 1,691 1,804 2,094 Roll Forward into NPA (i) 480 702 593 697 779 Restructuring (ii) 3 13 14 5 7 Total Slippages (B = i + ii) 483 715 607 702 786 Roll
Slide 42: ECL summary - consolidated
ECL summary - consolidated Assets categorization Stage 1 & 2 (represents standard assets) 98.51% 98.45% 98.46% 98.40% 98.39% Stage 3 (represents GNPA) 1.49% 1.55% 1.54% 1.60% 1.61% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Gross Stage 1 & 2 a
Slide 43: Thank You
BAJAJ FINANCE LIMITED Q2 FY20 Investor Presentation Thank You
Slide 44: 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 45: Annexures
BAJAJ FINSERV Annexures 44
Slide 46: Credit quality Portfolio composition
Credit quality Portfolio composition 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 98.58% 98.83% 98.91% 99.04% 98.91% 98.96% 98.69% 98.54% 98.52% Bkt 0 85.82% 87.85% 88.76% 87.60% 88.
Slide 47: Portfolio Credit quality Including BHFL
Portfolio Credit quality Including BHFL 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 Bkt 0 97.26% 97.46% 97.62% 97.64% 97.69% 97.81% 97.76% 97.46% 97.21% Bkt 0 99.57% 99.63% 99.70% 99.6
Slide 48: Portfolio Credit quality Including BHFL
Portfolio Credit quality Including BHFL 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 98.82% 98.96% 99.48% 99.49% 99.40% 99.54% 99.52% 99.42% 99.61% Bkt 0 99.49% 99.56% 99.46% 99.49% 99.44% 9
Slide 49: Financial snapshot
Financial snapshot ₹ in Crores FY18@ FY19 @ YoY CAGR Financials snapshot @ FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 (Consol.) (Consol.) (FY18 FY19) (12 yrs) Assets under management 2,478 2,539 4,032 7,573 13,107 17,517 24,061 32,410 44,229 60,196 82,422 1,15,888 41% 42% Income from operatio
Slide 50: 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