Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q4 FY19 Earnings Presentation
59 slides from Bajaj Finance's earnings presentation, May 16, 2019
Slide 1: Bajaj Finance Limited – Investor Presentation filing letter
BAJAJ FINANCE LIMITED 16 May 2019 THE MANAGER, THE MANAGER, BSE LIMITED LISTING DEPARTMENT DCS - CRD NATIONAL STOCK EXCHANGE OF INDIA LTD. PHffi.OZE JEEJEEBHOY TOWERS EXCHANGE PLAZA, C-1. BLOCK G, DALAL STREET, BANDRA - KURLA COMPLEX, BANDRA {EAST) MVMBAI - 400 001 MVMBAI - 400 051 SCRIP CODE: 50003
Slide 2: Bajaj Finance Limited Q4 FY19
Bajaj Finance Limited Q4 FY19 Investor Presentation 16th May, 2019
Slide 3: Presentation Path
Presentation Path Section 01 Section 04 Section 07 Bajaj Finance Limited Asset liability Bajaj Housing Finance overview 03 management 21 Limited overview 34 Section 02 Section 05 Section 08 Ind AS financial Customer Franchise Update on performance Q4 FY19 & and distribution credit quality FY19 14 re
Slide 4: Section 01 Bajaj Finance Limited overview
Section 01 Bajaj Finance Limited overview 3
Slide 5: Bajaj group structure
Bajaj group structure Bajaj Holdings & Investment Limited (Listed) 33.43% 1 39.16% 2 Bajaj Auto Limited Bajaj Finserv Limited (Listed) (Listed) Auto business arm Financial services arm 74% 74% 54.99% 3 Bajaj Finance Limited Bajaj Allianz Life Bajaj Allianz General (Listed) Insurance Company Ltd Insu
Slide 6: Bajaj Finserv group - Executive summary
Bajaj Finserv group - Executive summary through its various subsidiaries Bajaj Finance Limited Bajaj Allianz General Insurance Limited Bajaj Allianz Life Insurance Limited A 32 year old non bank finance company 2nd largest private general insurer in India as Amongst top 5 private players as of FY18
Slide 7: What do we stand for
What do we stand for a sustainable ROA of 3% and ROE of 18-20% in the medium term 6
Slide 8: 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 Overall franchise of 34.48 MM and cross sell client base of 20.67 Focus on mass affluent and above clients MM Strong focus on cross selling assets, insura
Slide 9: Bajaj Finance Shareholder profile
Bajaj Finance Shareholder profile Top 20 investors & their holdings Corporates 6.08% S.No Name of Shareholder As on 31 As on 31 As on 31 6.08% 1 BAJAJ FINSERV LTD 54.99% 54.99% 54.99% Others 2 GOVERNMENT OF SINGAPORE 3.68% 3.70% 3.81% MF 1.69% 3 MAHARASHTRA SCOOTERS LTD. 3.28% 3.28% 3.28% 7.17% 4 ST
Slide 10: Financial snapshot
Financial snapshot 58.1% 34.5 PBT 6,179 CAGR 62% 26.2 7.05% 50.6% 20.1 5.50% 16.1 47.0% 46.0% 3,843 12.9 44.8% 44.4% 44.6% 10.1 45.0% 43.1% 8.1 2,818 6.4 4.9 40.2% 2.9 3.7 1,965 41.4% 2.5 2.20% 1,357 1,091 35.3% 872 602 370 30 51 134 0.80% 0.63% 0.45% 0.44% 0.43% 0.19% 0.28% 0.28% 0.12% ^ AUM 2,478
Slide 11: Product suite
Product suite BAJAJ FINANCE LIMITED Consumer SME Commercial Rural Deposits Partnerships & Services • Consumer Durable Loans • Unsecured Working • Securities Lending • Consumer Durable • Retail Term • Life Insurance • Digital Product Loans (E) Capital Loans (E) • Large Value Lease Loans Deposits Dist
Slide 12: Executive summary Bajaj Finance Limited Consolidated
Executive summary Bajaj Finance Limited Consolidated Overview • 32 year old non bank with a demonstrated track record of profitable growth • Diversified financial services company focused on Consumer, Payments, Rural, SME, Commercial and Mortgages • Focused on mass affluent client with a strategy to
Slide 13: Executive summary Bajaj Finance Limited Standalone
Executive summary Bajaj Finance Limited Standalone Overview • Focused on Consumer, Payments, Rural, SME and Commercial lines of businesses • Strategic business unit organization design supported by horizontal common utility functions to drive domain expertise, scalability and operating leverage • Fo
Slide 14: Executive summary Bajaj Finance Limited Standalone
Executive summary Bajaj Finance Limited Standalone SME Business • Offers unsecured working capital loans to SME & self employed professionals • Secured offerings include enterprise loans against property and financing against used car • Focused on affluent SMEs (average sales of ₹ 10-12 crore) with
Slide 15: Section 02 Ind AS financial performance Q4 FY19 & FY19
Section 02 Ind AS financial performance Q4 FY19 & FY19 14
Slide 16: Consolidated key performance highlights for Q4 FY19
Consolidated key performance highlights for Q4 FY19 • Customer franchise as of 31 Mar 2019 32% to 34.48 MM from 26.22 MM as of 31 Mar 2018. During the quarter, the company acquired 1.92 MM new customers • New loans booked during Q4 FY19 53% to 5.83 MM from 3.80 MM in Q4 FY18 • Existing customers
Slide 17: Consolidated key performance highlights for FY19
Consolidated key performance highlights for FY19 • Customer franchise as of 31 Mar 2019 32% to 34.48 MM from 26.22 MM as of 31 Mar 2018. During the year, the company acquired 8.27 MM new customers • New loans booked during FY19 53% to 23.50 MM from 15.34 MM in FY18 • Existing customers contribut
Slide 18: Financial Statement Summary Consolidated
Financial Statement Summary Consolidated ₹ in crore Financials snapshot Q4 FY19 Q4 FY18 YoY FY19 FY18 YoY Assets under management 1,15,888 82,422 41% 1,15,888 82,422 41% Total income 5,308 3,492 52% 18,502 12,757 45% Interest expenses 1,913 1,227 56% 6,624 4,614 44% Net Interest Income (NII) 3,395 2
Slide 19: Reconciliation of consolidated profit with previous GAAP
Reconciliation of consolidated profit with previous GAAP ₹ in crore Particulars Q4 FY19 Q4 FY18 YoY FY19 FY18 YoY Profit before tax as per previous GAAP @ 1,710 1,134 51% 6,675 4,096 63% Ind AS adjustments increasing / (decreasing) profit : Adoption of Effective Interest Rate (EIR) for financial ass
Slide 20: Section 03 Non financial commentary
Section 03 Non financial commentary 19
Slide 21: Non financial commentary
Non financial commentary • Bajaj Finance Limited, for its foreign currency borrowings program, received a long- table outlook and a short- - - eign rating assigned by S&P Global Ratings • Bajaj Housing Finance Limited has optimized its cost metrics to build a sustainable mortgage business. The Compa
Slide 22: Section 04 Asset liability management
Section 04 Asset liability management 21
Slide 23: Behaviouralized ALM snapshot as on 31 March 2019 - BFL
Behaviouralized ALM snapshot as on 31 March 2019 - BFL ₹ in crore 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 5,524 2 2 7 10 344 510 4,181 10,580 Loan repayments 7,642 5,263 5,199 12,203 17,014 31,771 12,409 5,991 97,49
Slide 24: Disciplined ALM Management over the last 8 years
Disciplined ALM Management over the last 8 years Cumulative gap upto 1m Cumulative gap upto 12m Permissible Limit Series3 141% 119% 120% 106% 96% 83% 71% 57% 48% 61% 64% 55% 51% 36% 36% 50% 44% 38% 16% 4% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% 23
Slide 25: Liability mix over the last 8 years
Liability mix over the last 8 years 9% 8% 5% 5% 8% 8% 13% 3% 10% 11% 12% 4% 3% 4% 6% 7% 5% 5% 3% 5% 31% 33% 38% 35% 25% 35% 38% 40% 43% 36% 54% 34% 32% 34% 58% 58% 48% 53% 31% 35% 12% 15% 14% 15% 6% 8% 0% 0% 1% 4% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Sep '18 Dec'18 Mar'19 Deposits Bank L
Slide 26: Conservative leverage standards
Conservative leverage standards 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 6.8 24.7% 6.6 6.4 22.0% 6.2 6.3 22.1% 6.3* 6.2 20.3% 20.7% 19.1% 19.5% 19.7% 5.9 21.4% 5.3 17.5% 18.0% 17.2% 18.7% 16.2% 16.1% 5.2 16.8% 16.3% 15.0% 14.6% 14.2% 5.7% 5.0% 4.9% 4.6% 3.8% 4.4% 3.3% 3.0% 3.4% 2.5% Mar'12 Mar'13 Mar
Slide 27: Key takeaways on liquidity
Key takeaways on liquidity • 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) was at ₹ 6,612
Slide 28: Resilient business model
Resilient business model 47.0% 46.0% 44.6% 45.0% 43.1% 41.4% 41.8% 38.4% 38.7% 37.9% 38.6% * 36.0% 32.9% 33.3% 36.4% 35.9% 35.3% 29.9% 28.4% 26.4% 9.1% 9.7% 9.9% 9.9% 9.5% 9.0% 8.2% 8.2% 8.2% 8.3% 4.2% 4.1% 3.6% 3.5% 3.7% 3.9% 4.0% 4.0% 4.1% 3.3% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% @ @
Slide 29: Section 05 Customer franchise and distribution reach
Section 05 Customer franchise and distribution reach 28
Slide 30: Customer franchise
Customer franchise Q4 FY18 Q4 FY19 Q3 FY19 26.22 MM Total Franchise 34.48 MM 32.57 MM 19.77 MM Credit segment filter 26.93 MM 25.30 MM 18.88 MM Overall Cross sell franchise 25.89 MM 24.29 MM Non delinquent 17.22 MM customers 23.26 MM 22.07 MM Cross sell franchise 15.43 MM 20.67 MM Addition of 0.98 M
Slide 31: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 31 Mar Geographic Presence 2015 2016 2017 2018 2019 Urban 161 262 377 730 927 Rural 232 397 538 602 903 Of which Rural Lending branches 50 105 177 219 347 Of which Rural Lending franchisees 182 292 361 383 556 Total Bajaj Finance presence 393 659 915 1
Slide 32: Strong distribution reach
Strong distribution reach Active distribution point of sale 31 Mar 2015 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Mar 2019 Consumer durable stores Urban 7,000+ 9,400+ 14,000+ 15,500+ 20,400+ Consumer durable stores Rural 1,500+ 3,200+ 5,500+ 8,200+ 14,500+ Digital product stores 2,650+ 5,200+ 5,900+ 15
Slide 33: Section 06 Business segment wise AUM
Section 06 Business segment wise AUM 32
Slide 34: Business segment wise AUM as of 31 March 2019
Business segment wise AUM as of 31 March 2019 ₹ crore Standalone as of BHFL as of Consolidated Consolidated Composition as Assets Under Management Growth 31 Mar 2019 31 Mar 2019 as of 31 Mar 2019 as of 31 Mar 2018 of 31 Mar 2019 Consumer B2B -Auto Finance Business 9,726 - 9,726 6,291 55% 8% Consumer
Slide 35: Section 07 Bajaj Housing Finance Limited Overview
Section 07 Bajaj Housing Finance Limited Overview 34
Slide 36: Executive summary Bajaj Housing Finance Limited
Executive summary Bajaj Housing Finance Limited Bajaj Housing • Bajaj Housing Finance Limited is a 100% subsidiary of Bajaj Finance Limited, registered with National Housing Bank as a Housing Finance Limited Finance Company • Offers full range of mortgage products such as home loans, loan against pr
Slide 37: Executive summary Bajaj Housing Finance Limited
Executive summary Bajaj Housing Finance Limited Developer • Offers construction finance and inventory finance mainly to category A and A+ developers in India Finance • Average ticket size ranges between 15 35 crore • Currently present in 8 locations (Mumbai, Bangalore, Pune, Ahmedabad, Chennai, Kolk
Slide 38: Portfolio composition Bajaj Housing Finance Limited
Portfolio composition Bajaj Housing Finance Limited As of 31 Mar 2019 ₹ in Crore Home Loan Portfolio Product Category Customer Categorisation DF Others 705, 532, 4% 3% Self-Employed LRD 1,785, 15% 1,705, 10% LAP 2,719, 16% Home Loan Salaried 11,901, 68% 10,116, 85% Salaried focused Home Loans acquis
Slide 39: Customer profile - Bajaj Housing Finance Limited
Customer profile - Bajaj Housing Finance Limited Home loan Loan Against Property Average loan size Overall 37 lakhs 27 lakhs Average loan size Urban 38 lakhs 44 lakhs Average loan size Rural 17 lakhs 11 lakhs LTV (at origination) 69% 49% Average loan term overall 18 years 11 years Average customer a
Slide 40: Financial statement summary Bajaj Housing Finance Limited
Financial statement summary Bajaj Housing Finance Limited ₹ in crore Financials snapshot Q4 FY19 Q4 FY18 FY19 FY18 Assets under management 17,562 3,570 17,562 3,570 Total Interest & fee income 431 66 1,156 106 Interest expenses 269 34 685 47 Net Interest Income (NII) 162 32 471 59 Operating Expenses
Slide 41: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited ECL categorization Stage 1 & 2 100.00% 99.98% 99.97% 99.95% Stage 3 0.00% 0.02% 0.03% 0.05% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Gross stage 1 & 2 assets 7,260 10,701 14,004 17,363 Impairment all
Slide 42: Behaviouralized ALM snapshot as on 31 March 2019 - BHFL
Behaviouralized ALM snapshot as on 31 March 2019 - BHFL ₹ in crore 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 1,861 - - - - - - - - - 1,861 Loan Repayments 284 198 196 575 1,111 3,912 2,703 1,999 2,269 4,182 17
Slide 43: Section 08 Update on credit quality
Section 08 Update on credit quality 42
Slide 44: 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 97.83% 98.38% 98.58% 98.83% 98.91% 99.04% 98.91% 98.96% 98.69% Bkt 0 85.67% 85.88% 85.82% 87.85% 88.
Slide 45: 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 97.29% 97.18% 97.26% 97.46% 97.62% 97.64% 97.69% 97.81% 97.76% Bkt 0 99.52% 99.50% 99.57% 99.6
Slide 46: 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 99.02% 98.91% 98.82% 98.96% 99.48% 99.49% 99.40% 99.54% 99.52% Bkt 0 99.11% 99.25% 99.49% 99.56% 99.46% 9
Slide 47: Credit quality provisioning coverage
Credit quality provisioning coverage Values in ₹ Cr 31 Mar 19 31 Mar 18 31 Mar 19 31 Mar 18 Consolidated AUM PCR Assets Under Management GNPA NNPA GNPA GNPA NNPA NNPA 31 Mar 19 (%) (%) (%) (%) (%) Consumer B2B -Auto Finance Business 9,726 529 206 61% 5.12% 5.70% 2.06% 2.25% Consumer B2B - Sales
Slide 48: NPA movement - consolidated
NPA movement - consolidated Values in ₹ Cr Particulars Assets Under Management 82,422 91,287 98,013 1,07,508 1,15,888 Opening GNPA (A) 1,254 1,164 1,280 1,471 1,691 Roll Forward into NPA (i) 298 378 480 702 593 Restructuring (ii) 4 1 3 13 14 Total Slippages (B = i + ii) 302 379 483 715 607 Roll back
Slide 49: ECL summary - consolidated
ECL summary - consolidated Assets categorization Stage 1 & 2 98.59% 98.61% 98.51% 98.45% 98.46% Stage 3 1.41% 1.39% 1.49% 1.55% 1.54% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Gross stage 1 & 2 assets 81,317 90,639 97,366 1,07,148 1,15,347 Im
Slide 50: Section 09 Leverage risk assessment of unsecured portfolios
Section 09 Leverage risk assessment of unsecured portfolios 49
Slide 51: Leverage risk methodology
Leverage risk methodology • Methodology used to calculate leverage risk of unsecured portfolios (Personal loan cross sell, Salaried personal loans, Business loans, Professional loans, Rural lending unsecured loans) • X axis represents the vintage of portfolio basis quarter of origination. For exampl
Slide 52: Leverage risk assessment of unsecured portfolios
Leverage risk assessment of unsecured portfolios Personal loans cross sell Salaried personal loans 110% 115% 106% 111% 106% 102% 102% 98% 97% 94% 93% 90% 88% 0M 3M 6M 9M 12M 15M 18M 21M 24M 0M 3M 6M 9M 12M 15M 18M 21M 24M Business loans Professional loans 140% 130% 130% 120% 120% 110% 110% 100% 100%
Slide 53: Leverage risk assessment of unsecured portfolios
Leverage risk assessment of unsecured portfolios Rural lending unsecured 106% 102% 98% 94% 90% 0M 3M 6M 9M 12M 15M 18M 21M 24M 52
Slide 54: 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 55: Thank You
BAJAJ FINANCE LIMITED Q4 FY19 Investor Presentation Thank You
Slide 56: Annexures
BAJAJ FINSERV Annexures 55
Slide 57: ALM strategy (standalone)
ALM strategy (standalone) Borrowings ₹ 86,352 Crs) Borrowings ₹ 80,862 Crs) 415 , 740 , 1% 1% 6,355 , Banks Banks 11% NCDs 9,295 , 11% NCDs 13,193 , Subordinate Debt Subordinate Debt 15% 11,489 , 29,556 , Deposits 14% 26,103 , Deposits 4,139 , 34% 32% CPs CPs 5% 4,057 , CBLO CBLO 5% 32,694 , 29,178
Slide 58: 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 59: 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