Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Non-Deal Roadshow (June 2019)
42 slides from Bajaj Finserv's roadshow presentation, Jun 21, 2019
Slide 1: Stock exchange disclosure letter on investor meetings
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Slide 2: Bajaj Finserv Limited Investor Presentation – FY19
BAJAJ FINSERV LIMITED Investor Presentation – FY19* Financial Year : 1st April to 31st March
Slide 3: Bajaj Group Structure
BAJAJ GROUP STRUCTURE Bajaj Holdings & Investment Limited* 33.43% 39.29% Bajaj Auto Limited@ Bajaj Finserv Limited# 54.99% 74% 74% Bajaj Finance Limited Bajaj Allianz General Bajaj Allianz Life Insurance • Diversified Consumer, Rural, SME, Insurance Company Limited Company Limited Commercial & Mortg
Slide 4: Bajaj Finserv Vision
BAJAJ FINSERV’ VISION Life cycle Investment / Asset Asset Health Income needs of Wealth acquisition protection Insurance Protection Individual & management SME Lending General Insurance Medical Expense Life Insurance Life Insurance customers Fixed Deposits Pensions Mutual funds Retail Consumer: All
Slide 5: Bajaj Finserv: Core Strengths
BAJAJ FINSERV : CORE STRENGTHS Outstanding heritage & One of oldest and most trusted business groups with PAN India presence with a high Impeccable reputation level of integrity and Corporate Governance Innovation and Technology Differentiation through innovative and disruptive products & services d
Slide 6: Bajaj Finserv - Consolidated Financial Highlights
BAJAJ FINSERV - CONSOLIDATED FINANCIAL HIGHLIGHTS 1 USD = Rs.70 IGAAP Ind AS Financials Snapshot, USD MM FY14 FY15 FY16 FY17 FY18 CAGR FY18 FY19 Life Insurance (GWP) 835 860 842 883 1,083 7% 1,083 1,265 General Insurance (GWP) 655 757 843 1,098 1,355 20% 1,355 1,585 Retail Finance 582 774 1,048 1,42
Slide 7: BFS and BFL Have Delivered Consistent Long-Term Returns to Shareholders
BFS AND BFL HAVE DELIVERED CONSISTENT LONG- TERM RETURNS TO SHAREHOLDERS Bajaj Finserv & Bajaj Finance Change in the Share Price of BFS and BFL vs Nifty 50 index on base year • BFL included in Nifty 50 index from Sep, 2017 • BFL included in S&P BSE Sensex from Dec, 2018 • BFS included in Nifty 50 in
Slide 8: Bajaj Finance
BAJAJ FINSERV BAJAJ FINANCE
Slide 9: 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. D
Slide 10: Bajaj Finance's Businesses
BAJAJ FINANCE’S BUSINESSES 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 model in 903 locations products & lifestyle annual sales of around short, medium and
Slide 11: Customer Franchise
CUSTOMER FRANCHISE Q4 FY18 Q4 FY19 26.22 MM Total Franchise 34.48 MM 19.77 MM 26.93 MM Credit segment filter 18.88 MM 25.89 MM Overall Cross sell franchise 17.22 MM 23.26 MM Non delinquent customers Cross sell 15.43 MM franchise 20.67 MM Existing customers contributed to 65% of new loans booked duri
Slide 12: BFL: Key Takeaways
BFL : KEY TAKEAWAYS Consolidated AUM of $16,555 MM as on 31 Mar Strong AUM growth 2019, up by 41% from $11,775 MM as on 31 Mar 2018 Robust Profit growth Consolidated PAT of $571 MM for FY2019, up by 60% from $357 MM in FY2018 Strong Capital Adequacy Capital Adequacy of 20.66%, Tier I capital s
Slide 13: BFL – Behaviouralised ALM
BFL – BEHAVIOURALISED ALM Amount in USD MM 1USD = Rs.70 Behaviouralised ALM as on 31 March 2019 16,563 14,947 16,563 13,024 11,929 8,047 9,681 5,551 3,723 5,127 2,949 2,188 3,095 1,445 1,572 2,201 1m >1 to 2m >2 to 3m >3 to 6m >6m to 1 yr >1 to 3 yr >3 to 5 yr >5 yr Cumulative Total Inflows Cumulati
Slide 14: Bajaj Finance – Financial Highlights
BAJAJ FINANCE – FINANCIAL HIGHLIGHTS 1USD = Rs.70 IGAAP@ Ind AS#(Consol.) FY18 Financial Snapshot, USD MM FY14 FY15 FY16 FY17 (Consol.) CAGR FY18 FY19 Assets under management 3,437 4,630 6,318 8,599 12,005 37% 11,775 16,555 Income from operations 582 774 1,048 1,427 1,924 35% 1,822 2,643 Interest ex
Slide 15: Bajaj Allianz General Insurance
BAJAJ ALLIANZ GENERAL INSURANCE
Slide 16: BAGIC – Key Strategic Differentiators
BAGIC – KEY STRATEGIC DIFFERENTIATORS STRATEGY Strive for market share growth 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 & prudent time - B
Slide 17: BAGIC - Key Takeaways
BAGIC - KEY TAKEAWAYS • Industry beating Premium growth FY19 growth at Industry beating Premium growth 17% vs Industry growth of 13% in FY19 Strong increase in AUM to reach $2,462 MM as on Strong Increase in AUM 31 Mar 2019 ($2,118 MM as on 31 March 2018) Kerala flood losses amounting to $7.1 MM
Slide 18: Consistent Delivery of Combined Ratio & RoE
CONSISTENT DELIVERY OF COMBINED RATIO & RoE Combined Ratio RoE* BAGIC vs Pvt. Players BAGIC vs Pvt. Players 101.7% 23.0% 23.0% 100.0% 98.8% 20.1% 96.8% 18.3% 94.0% 92.3% 14.7% 13.9% FY17 FY18 9M FY19 FY17 FY18 9M FY19 BAGIC Top 5 Private Players BAGIC Top 5 Private Players 1. Combined Ratios are in
Slide 19: BAGIC – Diversified Distribution
BAGIC – Diversified distribution 1 USD = Rs.70 VSO Success Graph Distribution Mix 2000 7.3% 8.0% 1800 7.0% 1600 5% 8% 12% 6.0% 12% 9% 1400 5.0% 7% Corporate Agents - 1200 5.0% Banks 19% 20% 21% 1000 3.2% 4.0% Corporate Agents - 800 Others 3.0% 600 28% 23% Individual Agents 2.0% 31% 400 200 68 116 1.
Slide 20: BAGIC's Product Suite – Retail Focused
BAGIC’s PRODUCT SUITE – RETAIL FOCUSED Motor Health Miscellaneous • Property • Private Cars • Retail health • Liability • Two Wheeler • Group health • Engineering • Commercial Vehicles • Critical Illness • Travel • Liability Only • Personal Accident • Extended Warranty • Long term two wheeler & • Go
Slide 21: Bajaj Allianz General Insurance – Financial Highlights
BAJAJ ALLIANZ GENERAL INSURANCE – FINANCIAL HIGHLIGHTS 1USD = Rs.70 Financials Snapshot, USD MM (IGAAP) FY 15 FY 16 FY 17 FY 18 FY 19 CAGR Capital Infused including premium 40 40 40 40 40 Net Worth 318 399 505 638 738 23% Asset under Management (AUM) 1,123 1,316 1,547 2,118 2,462 22% GWP 757 843 1,0
Slide 22: Bajaj Allianz Life Insurance
BAJAJ ALLIANZ LIFE INSURANCE
Slide 23: BALIC - Key Strategic Differentiators
BALIC - KEY STRATEGIC DIFFERENTIATORS STRATEGY • Balance growth with balanced product mix, seeking steady increase in market share of individual business • Business construct is to balance customer benefit with shareholder returns, focusing on New Business Value DIFFERENTIATORS • Focus on all retail
Slide 24: BALIC - Key Takeaways
BALIC - KEY TAKEAWAYS Industry beating Individual Rated • BALIC’s industry beating IRP growth of 25% vs Industry Premium (IRP) growth of 9% in FY19 Focus is on growing New Business Value (NBV), FY17 to Robust New Business Value growth FY19 NBV CAGR of 44% Net Margin post overruns turned positive
Slide 25: BALIC - Diversified Distribution
BALIC - DIVERSIFIED DISTRIBUTION New Business Channel Mix 120% Individual Business Channel Mix 1% 3% 1% 3% 3% 2% 1% Online 100% 6% 5% 4% 5% 2% 7% 11% 4% 8% 18% 7% 80% 8% 12% Brokers 28% 11% 27% Corporate 60% 25% Agents Banks 40% 85% Corporate 79% Agents Others 69% 61% 20% 57% Individual 47% Agents 0
Slide 26: BALIC - Individual Rated Business
BALIC - INDIVIDUAL RATED BUSINESS Amount in USD MM 1USD = Rs.70 BALIC Individual Rated NB BALIC Individual Rated NB (Agency) 249 172 200 158 144 121 FY17 FY18 FY19 FY17 FY18 FY19 Institutional Business Individual Rated NB • Actions that resulted in industry beating growth in the last 51 3 years • St
Slide 27: BALIC - Balancing Product Mix for Sustainability
BALIC - BALANCING PRODUCT MIX FOR SUSTAINABILITY New Business Product Mix Individual Rated Mix 5% 4% 10% 68% 66% 63% 25% 24% 30% 70% 72% 60% 32% 34% 37% FY17 FY18 FY19 FY17 FY18 FY19 Individual Group Individual - Unit Linked Individual - Par Individual - Non Par Group NB Mix • Balancing product mix
Slide 28: BALIC - Improvements in Productivity
BALIC - IMPROVEMENTS IN PRODCTIVITY 1 USD = Rs.70 Individual Regular Business Individual Regular Premium Business Average Ticket Size USD (Agency) Average Ticket Size (USD) 9% increase 22%1,067 increase 802 898 649 717 530 FY17 FY18 FY19 FY17 FY18 FY19 Persistency Trends (Premium based) Efforts to i
Slide 29: Bajaj Allianz Life Insurance – Financial Highlights
BAJAJ ALLIANZ LIFE INSURANCE – FINANCIAL HIGHLIGHTS 1USD = Rs.70 Financials Snapshot, USD MM (IGAAP) FY15 FY16 FY17 FY18 FY19 CAGR Capital infused including premium 173 173 173 173 173 Net Worth 964 1,090 1,211 1,317 1,379 9% Assets under management (AUM) 6,222 6,301 7,039 7,424 8,089 7% New Busines
Slide 30: New Business Value (NBV) and Embedded Value Update
NEW BUSINESS VALUE (NBV) AND EMBEDDED VALUE UPDATE Figures in USD : MM 1 USD = Rs.70 Particulars FY17 FY 18 FY 19 PERFORMANCE Annualized HIGHLIGHTS Premium ** (ANP) 184 255 318 New Business Value* (NBV) 24 32 50 NBV Growth 4.8% 33.3% 56.4% Implied Margins on ANP+ 12.98% 12.47% 15.62% Embedded Value+
Slide 31: Annexures
BAJAJ FINSERV Annexures
Slide 32: Bajaj Finserv's Opportunity Spectrum: Non Life Insurance
BAJAJ FINSERV’S OPPORTUNITY SPECTRUM: NON LIFE INSURANCE Non Life Per Capita Premium (USD) 2,542 938 18 159 174 113 297 India Russia China Brazil UK US Non-life per capita World Average Non Life Per Capita and penetration Non Life penetration to GDP to GDP way below advanced economies and lower than
Slide 33: Bajaj Finserv's Opportunity Spectrum: Life Insurance
BAJAJ FINSERV’S OPPORTUNITY SPECTRUM : LIFE INSURANCE Household Sector Financial Financial (Savings and Non Financial Savings) Savings are at levels Major contribution 48% Financial 57% 55% below 67% 63% 62% FY08, of Financial Savings post indicating Savings in Crisis fell untapped FY08 52% potentia
Slide 34: Bajaj Finserv's Opportunity Spectrum: Life Insurance
BAJAJ FINSERV’S OPPORTUNITY SPECTRUM : LIFE INSURANCE Protection Gap (%) 92.2% 88.3% 73.3% 56.3% 56.0% India China Indonesia Japan Singapore Working Population of India (In MM) 724 26% 576 FY2015 FY2030 (est.) Rising working population - significant insurance potential Significant protection gap
Slide 35: Ratings of Group Companies
RATINGS OF GROUP COMPANIES Bajaj Finance • Long term rating of ‘BBB-/Stable and Short-term rating of ‘A-3’ by S&P Global Ratings • Credit rating for FD program is FAAA/Stable by CRISIL & MAAA (Stable) by ICRA • Credit rating for Long Term Debt Program is AAA/Stable by CRISIL, ICRA, CARE & India Rati
Slide 36: Adoption of Ind AS Accounting Standards
ADOPTION OF IND AS ACCOUNTING STANDARDS • Bajaj Finserv has adopted Indian Accounting Standards (Ind AS) with effect from 1st April 2018 • Ind AS are the IFRS compliant accounting standards adopted by India • Figures in respect of Bajaj Finance Ltd. are as per Ind AS • Consolidated figures for FY19
Slide 37: Reconciliation of Consolidated Profit as per Ind AS with Indian GAAP
BAJAJ FINSERV : RECONCILIATION OF CONSOLIDATED PROFIT AS PER IND AS WITH INDIAN GAAP All Figures in USD MM 1 USD = Rs.70 Particulars FY2018 FY2019 Net Profit after Tax as per Indian GAAP@ 392 478 Ind AS Adjustments : Increase / (decrease) Adoption of Effective Interest Rate (EIR) for financial asset
Slide 38: BFL - Key Takeaways on Liquidity
BFL - KEY TAKEAWAYS ON LIQUIDITY FY 2018-19 The Company and its housing finance subsidiary (BHFL) have continued to maintain a strong ALM profile as of 31 Mar 2019 The Company continued to maintain strong liquidity profile: The total consolidated liquidity buffer (free cash and cash equivalents)
Slide 39: BALIC - AUM Mix
BALIC - AUM MIX Amount in USD MM 1 USD = Rs.70 AUM Mix AUM CAGR OF 9% (FY16-FY18) PERFORMANCE HIGHLIGHTS FY19 AUM grew by 5% over FY18 8,089 7,424 7,039 3,294 3,055 3,057 3,982 4,369 4,795 FY17 FY18 FY19 Non ULIP ULIP Total (USD MM) • Of the UL Funds 60% is equity funds as on 31 Mar 2019 (61% as on
Slide 40: BALIC: Embedded Value Movement
BALIC : EMBEDDED VALUE MOVEMENT Figures in USD : MM 1 USD = Rs.70 PERFORMANCE HIGHLIGHTS 136 17 2 25 37 50 27 1,856 1,694 As at Unwinding Investment Operational Assumption Others NBV at POS Expense As at 31st March 2018 Variance Variance Change Overrun 31st March 2019 (incl valn) Increase / Decrease
Slide 41: Disclaimer
Disclaimer This presentation has been prepared by Bajaj Finserv Limited (the “Company”) 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 s
Slide 42: Thank You
BAJAJ FINSERV Thank You