Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q3 FY21 Earnings Presentation
54 slides from Bajaj Finance's earnings presentation, Jan 20, 2021
Slide 1: Bajaj Finance Limited filing cover letter
BAJAJ FINANCE LIMITED 20 January 2021 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: Bajaj Finance Limited Q3 FY21 Investor Presentation
Bajaj Finance Limited Q3 FY21 Investor Presentation 20 January 2021
Slide 3: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive summary Financial performance Customer franchise and Update on Q3 FY21 Q3 FY21 distribution reach credit quality 3 25 36 43 Section 02 Section 04 Section 06 Bajaj Finance Limited Asset liability Business segment wise overview ma
Slide 4: Section 01 Executive summary Q3 FY21
1.1 Quarter gone by Section 01 Executive summary Q3 FY21 1.2 Executive summary on Q3 FY21 3
Slide 5: Quarter gone by
Quarter gone by A quarter marked by granular business recovery, significant improvement in risk metrics, tracking implementation of business transformation plan and putting into motion a plan for pre-COVID growth and financial performance from Q1 FY22. AUM Opex to NII PAT ROE Net NPA* ₹ 1,43,550 32.
Slide 6: Executive summary Q3 FY21
Executive summary Q3 FY21 Balance Sheet and Franchise: 1. Q3 AUM was at ₹ 143,550 crore as against ₹ 145,092 crore last year. Core AUM growth in Q3 FY21 was approximately ₹ 8,000 crore (adjusted for IPO receivable of ₹ 987 crore and higher ECL of Rs 520 crore) as compared to ₹ 9,559 crore in Q3 FY20
Slide 7: Executive summary Q3 FY21
Executive summary Q3 FY21 NIM Metrics 11. Margin profile in all lines of businesses was steady at pre-COVID levels other than mortgages. 12. Net Interest Income (NII) for Q3 FY21 was ₹ 4,296 crore as against ₹ 4,535 crore in Q3 FY20. NII for the quarter was lower by ₹ 239 crore compare to Q3 FY20. T
Slide 8: Executive summary Q3 FY21
Executive summary Q3 FY21 Operating expense management 17. Operating expenses for Q3 FY21 were ₹ 1,389 crore, lower by 9% YoY despite ₹ 58 crore increase in recovery costs. It was lower due to marginally lower business volumes and the measures taken to reduce operating expenses. Some of the opex mea
Slide 9: Executive summary Q3 FY21
Executive summary Q3 FY21 23. The Company last provided an update on its credit cost scenario model as part of Q2 earnings call. It expected the residual loan loss and provision in second half at ₹ 2,600-2,900 crore with a downward bias. Post ₹ 1,352 crore of provisioning in current quarter, the Com
Slide 10: Executive summary Q3 FY21
Executive summary Q3 FY21 Capital 28. The Company continues to remain very well capitalized with CRAR of 28.18% as of 31 Dec 2020. Tier-1 capital was 24.73%. The Company has adequate capital to meet its next 3 years growth aspiration. Update on Business transformation: 29. The Company has accelerate
Slide 11: Executive summary Q3 FY21
Executive summary Q3 FY21 35. The Company also plans to partner with 25+ adjunct app ecosystem which have relevant product/services for its customers. These 36. fully delivered will drive significant velocity gains, reduction in operating costs and significant improvement in customer experience. Cus
Slide 12: Executive summary Q3 FY21
Executive summary Q3 FY21 Subsidiaries 42. Bajaj Housing Finance Ltd (BHFL) profit after tax contracted by 24% to ₹ 99 crore in Q3 FY21 against ₹ 131 crore in Q3 FY20 due to higher provisioning. 43. AUM increased by 18% to ₹ 35,492 crore as of 31 Dec 2020 from ₹ 30,035 crore as of 31 Dec 2019. 44. ₹
Slide 13: 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 12
Slide 14: 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 15: 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 14
Slide 16: 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% 15
Slide 17: 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 46.31 MM Strong focus on cross selling assets, payments, Centre of Excellence for eac
Slide 18: Our shareholder profile
Our shareholder profile Top 20 investors & their holdings As on 31 As on 30 As on 31 MF S.No Name of Shareholder Dec 20 Sep 20 Dec 19 6.25% 1 BAJAJ FINSERV LTD 52.74% 52.74% 52.82% Others 2 GOVERNMENT OF SINGAPORE 4.28% 4.20% 4.62% 3 MAHARASHTRA SCOOTERS LIMITED 3.15% 3.15% 3.15% 0.87% 4 AXIS LONG T
Slide 19: 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 20: 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 21: 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 22: 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 23: 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 24: 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 25: 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 26: Section 03 Financial performance Q3 FY21
Financial statement summary 3.1 Consolidated Section 03 Financial statement summary Financial performance 3.2 Bajaj Finance Limited Q3 FY21 3.3 Financial statement summary Bajaj Housing Finance Limited 25
Slide 27: Financial statement summary Consolidated
Financial statement summary Consolidated ₹ in crore Financials snapshot Q3 FY21 Q3 FY20 Y-o-Y 9M FY21 9M FY20 Y-o-Y FY20 Assets under management 143,550 145,092 (1%) 143,550 145,092 (1%) 147,153 Assets under finance 137,920 139,561 (1%) 137,920 139,561 (1%) 141,376 Interest income 5,723 6,104 (6%) 1
Slide 28: Financial statement summary Bajaj Finance Limited
Financial statement summary Bajaj Finance Limited ₹ in Crore Financials snapshot Q3 FY21 Q3 FY20 Y-o-Y 9M FY21 9M FY20 Y-o-Y FY20 Assets under management 109,598 116,460 (6%) 109,598 116,460 (6%) 116,102 Assets under finance 107,056 113,601 (6%) 107,056 113,601 (6%) 113,417 Interest income 4,973 5,4
Slide 29: Financial statement summary Bajaj Housing Finance Limited
Financial statement summary Bajaj Housing Finance Limited ₹ in Crore Financials snapshot Q3 FY21 Q3 FY20 YoY 9M FY21 9M FY20 YoY FY20 Assets under management 35,492 30,035 18% 35,492 30,035 18% 32,705 Assets under finance 30,772 25,961 19% 30,772 25,961 19% 27,975 Interest income 747 620 20% 2,134 1
Slide 30: Section 04 Asset liability management
4.1 Conservative leverage standards Bajaj Finance Limited 4.2 Resilient business model Consolidated Behaviouralized ALM as of 31 Dec Section 04 4.3 Bajaj Finance Limited Asset liability management 4.4 Behaviouralized ALM as of 31 Dec Bajaj Housing Finance Limited 4.5 Disciplined ALM Management Bajaj
Slide 31: 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 7.0 28.2% 26.4% 26.6% 6.8 24.7% 25.0% 6.6 6.4 6.3 6.3 22.0% 6.2 24.7% 22.6% 23.0% 5.3 20.3% 5.4 21.3% 20.7% 19.1% 19.5% 19.7% 5.1 17.5% 18.7% 18.0% 4.7 4.7 4.6* 16.2% 16.1% 16.3% 15.0% 14.6% 14.2% 5.7%
Slide 32: Resilient business model Consolidated
Resilient business model Consolidated 47.0% 46.0% 44.6% 45.0% 43.7% 44.0% 43.8% 43.1% 41.4% 41.8% 38.4% 36.0% 35.3% 35.4% 32.9% 33.3% 32.3% 29.9% 33.5% 28.4% 27.9% 27.8% 27.2% 26.4% 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 8.17% 8.02% 7.78% 4.2% 4.1% 3.6% 3.5% 3.7% 3.9% 4.1% 4.1% 3.3% 2
Slide 33: Behaviouralized ALM as of 31 Dec 2020 BFL
Behaviouralized ALM as of 31 Dec 2020 BFL * As per previous GAAP ₹ 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 12,307 0 110 1 1 695 1,069 1,716 0 5,580 21,479 Advances 3,520 1,263 2,308 5,334 4,986 11,589 19,217 36,836 18,
Slide 34: Behaviouralized ALM as of 31 Dec 2020 BHFL
Behaviouralized ALM as of 31 Dec 2020 BHFL * As per previous GAAP ₹ in Crore Particulars 1 -7 D 7-14 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 509 250 - - - 750 - - - - - - 1,509 Advances 335 152 279 583 595
Slide 35: 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% 182% 141% 119% 120% 75% 61% 96% 88% 48% 51% 71% 70% 73% 36% 36% 57% 54% 44% 50% 38% 16% 4% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15%
Slide 36: Liability mix over the last 9 years
Liability mix over the last 9 years Bajaj Finance Limited 5% 5% 4% 5% 5% 6% 9% 8% 10% 8% 8% 3% 13% 4% 3% 4% 6% 4% 4% 5% 3% 6% 5% 4% 3% 7% 4% 4% 33% 38% 31% 25% 35% 38% 35% 38% 35% 35% 40% 43% 30% 31% 28% 26% 54% 34% 58% 58% 48% 53% 31% 35% 21% 21% 22% 24% 12% 15% 6% 8% 0% 1% 4% 0% Mar'12 Mar'13 Mar'
Slide 37: 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 36
Slide 38: Customer franchise
Customer franchise Q3 FY20 Q3 FY21 Q2 FY21 40.38 MM Total Franchise 46.31 MM 44.11 MM 31.86 MM Credit segment filter 36.60 MM 34.72 MM 30.76 MM Overall Cross sell franchise 35.32 MM 33.48 MM Non delinquent 27.41 MM customers 30.80 MM 29.63 MM Cross sell franchise 23.48 MM 25.25 MM 23.87 MM (58%) * (
Slide 39: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 30 Sep 31 Dec Geographic Presence 2017 2018 2019 2020 2020 2020 Urban 377 730 927 1,035 1,134 1,210 Of which urban lending branches 377 730 927 1,035 1,134 1,137 Of which urban lending franchise 73 Rural 538 602 903 1,357 1,507 1,604 Of which rural len
Slide 40: Strong distribution reach
Strong distribution reach Active distribution points of sale 31 Mar 2017 31 Mar 2018 31 Mar 2019 31 Mar 2020 30 Sept 2020 31 Dec 2020 Consumer durable stores Urban 14,000+ 15,500+ 20,400+ 24,200+ 24,200+ 24,700+ Consumer durable stores Rural 5,500+ 8,200+ 14,500+ 19,600+ 19,600+ 22,500+ Digital prod
Slide 41: Section 06 Business segment wise AUM
Section 06 6.1 Business segment wise AUM as of 31 Dec - Consolidated Business segment wise AUM 6.2 Business segment wise AUM as of 31 Dec Mortgages 40
Slide 42: Business segment wise AUM as of 31 Dec 2020 Consolidated
Business segment wise AUM as of 31 Dec 2020 Consolidated ₹ in crore Standalone as BHFL as of Consolidated Consolidated Composition as Assets Under Management Growth of 31 Dec 2020 31 Dec 2020 as of 31 Dec 2020 as of 31 Dec 2019 of 31 Dec 2020 Auto Finance Business 12,707 - 12,707 13,176 -4% 9% Sales
Slide 43: Break-up of AUM as of 31 Dec 2020 - Mortgages
Break-up of AUM as of 31 Dec 2020 - Mortgages ₹ in crore Bajaj Housing Finance Limited Mortgage - All Composition as Assets Under Management 31 Dec 2020 31 Dec 2019 Growth 31 Dec 2020 31 Dec 2019 Growth of 31 Dec 2020 Home Loans 22,217 19,570 14% 26,120 25,170 4% 56% Loan against property 4,417 3,56
Slide 44: Section 07 Update on credit quality
7.1 Provisioning Coverage - Consolidated 7.2 Provisioning Coverage Consolidated (Proforma) 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 43
Slide 45: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated ₹ in Crore Consol AUM PCR GNPA % NNPA % Assets Under Management GNPA NNPA 31 Dec 2020 (%) 31 Dec 19 31 Dec 20 31 Dec 19 31 Dec 20 Auto Finance Business 12,707 443 146 67% 5.68% 3.16% 2.61% 1.07% Sales Finance Business 10,186 8 1 85% 0.92% 0.05% 0.18% 0.01% Consum
Slide 46: Provisioning Coverage Consolidated (Proforma)
Provisioning Coverage Consolidated (Proforma) ₹ in Crore Consol AUM PCR GNPA % NNPA % Assets Under Management GNPA NNPA 31 Dec 2020 (%) 31 Dec 19 31 Dec 20 31 Dec 19 31 Dec 20 Auto Finance Business 12,707 1,617 804 50% 5.68% 11.54% 2.61% 6.09% Sales Finance Business 10,186 265 32 88% 0.92% 1.91% 0.1
Slide 47: ECL summary Consolidated
ECL summary Consolidated Assets categorization Stage 1 & 2 (represents standard assets) 98.39% 98.39% 98.60% 98.66% 97.14% Stage 3 (classified as NPA) 1.61% 1.61% 1.40% 1.03% 0.55% Stage 3 (not classified as NPA) - - - 0.31% 2.32% Summary of stage wise assets and provision for impairment allowance ₹
Slide 48: ECL summary Bajaj Housing Finance Limited
ECL summary Bajaj Housing Finance Limited ECL categorization Stage 1 & 2 (represents standard assets) 99.93% 99.92% 99.92% 99.91% 99.65% Stage 3 (represents GNPA) 0.07% 0.08% 0.08% 0.08% 0.06% Stage 3 (not classified as NPA) 0.01% 0.29% Summary of stage wise assets and ECL provisioning ₹ in Crore Fi
Slide 49: Portfolio stagewise provisioning Q3 FY21
Portfolio stagewise provisioning Q3 FY21 ₹ 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 9,779 2,634 1,617 122 375 813 1.2% 14.3% 50.3% Sales Finance Business 10,217 222 265 152 114 233 1.5% 51
Slide 50: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Consumer durable + Lifestyle Two & three-wheeler Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 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% 98.92% 1 88.32% 89.68% 90.
Slide 51: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Business & professional loans Rural Lending B2B Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 1 98.76% 98.82% 98.75% 98.59% 98.42% 98.35% 98.27% 93.43% 97.19% 1 99.44% 99.54% 99.26% 98.9
Slide 52: Portfolio credit quality Consolidated
Portfolio credit quality Consolidated Home loans 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 1 99.40% 99.54% 99.52% 99.42% 99.61% 99.63% 99.60% 98.31% 98.67% 2 0.21% 0.20% 0.22% 0.27% 0.13% 0.15% 0.11% 1.40% 1.03% 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% Sep'18 Dec'18 Mar'1
Slide 53: Thank You
BAJAJ FINANCE LIMITED Q3 FY21 Investor Presentation Thank You
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