Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q4 FY22 Earnings Presentation
66 slides from Bajaj Finance's earnings presentation, Apr 26, 2022
Slide 1: Q4 FY22 Investor Presentation
Q4 FY22 Investor Presentation 26 April 2022
Slide 2: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive Financial Customer franchise Update on summary – Q4 performance – Q4 and distribution credit quality FY22 3 FY22 31 reach 42 48 Section 02 Section 04 Section 06 Bajaj Finance Asset liability Business segment wise Limited overvie
Slide 3: Section 01: Executive summary – Q4 FY22
1.1 Quarter gone by 1.2 Lead financial indicators Section 01 Executive summary – Q4 FY22 1.3 Business Transformation Update 1.4 Consolidated financial performance – FY22 3
Slide 4: Quarter gone by
Quarter gone by An excellent quarter for the Company across balance sheet growth, portfolio quality and profitability. Omnipresence agenda continued to accelerate in Q4. Overall, excited about FY23 prospects. Core AUM Opex to NII PAT ROE* Net NPA $ 25,612 34.6% $ 323 MM 5.7% 0.68% Q4 FY22 MM Q4 FY21
Slide 5: Lead financial indicators
Lead financial indicators 1. Strong Core AUM growth* of $ 1,445 MM in Q4. In Q4, AUM growth was secular across all lines of businesses. In FY22, the Company added $ 5,241 MM of core AUM. 2. AUM as of 31 March 2022 was up 29% at $ 26,327 MM as against $ 20,393 MM as of 31 March 2021. In FY22, AUM com
Slide 6: Lead financial indicators
Lead financial indicators 10. Deposits book grew by 19% YOY to $ 4,107 MM as of 31 March 2022. Its contribution to consolidated borrowings stood at 19% as of 31 March 2022. The Company has created a deposits V2 plan to grow deposits book significantly over the next 3 years. 11. In Q4, Opex to NII wa
Slide 7: Lead financial indicators
Lead financial indicators 18. On portfolio credit quality, 10 portfolios are green and 1 is yellow (two and three-wheeler). 19. Consolidated post tax profit grew by 80% to $ 323 MM in Q4 FY22 as compared to $ 180 MM in Q4 FY21. 20. Capital adequacy remained strong at 27.22% as of 31 March 2022. Tier
Slide 8: Lead financial indicators
Lead financial indicators 28. In Q4, BHFL delivered post tax profit of $ 26 MM as against $ 24 MM in Q4 FY21, a growth of 11%. 29. Capital adequacy of BHFL was 19.72% as of 31 March 2022. On 7 April 2022, BFL infused capital of $ 333 MM in BHFL to support its capital needs for next 24 months. Bajaj
Slide 9: Business Transformation update
Business Transformation update 9
Slide 10: Omnipresence strategy update
Omnipresence strategy update In FY23, Omnipresence strategy will expand from geography and digital app platform to also include creation of a digital web platform. 1. Web remains an extremely important driver of traffic, volumes and service to customers in the digital space. As part of its Omnichann
Slide 11: Omnipresence strategy update
Omnipresence strategy update Digital app platform 5. Insurance marketplace went live in March 2022 offering 4 motor insurance products, 9 health insurance products, 8 asset insurance products and 345 pocket insurance products. Its key features include compare, review, buy policies, service section i
Slide 12: Omnipresence strategy update
Omnipresence strategy update 11. In Q4, the Company booked 455K new EMI card customers digitally. Cards In Force (CIF) of EMI cards acquired digitally now stands at 1.8 MM. In Q4, this CIF delivered 234K loans. 12. In Q4, EMI store visits were 36.9 MM as against 44.7 MM in Q3 FY22 which had festival
Slide 13: Omnipresence strategy update
Omnipresence strategy update 19. In Q4, the Company added 1.7 MM wallets as against 2.5 MM in Q3 FY22. The Company has 6.5 MM customers on its wallet as of 31 March 2022. In Q4, ~ 1 MM transactions were done by these customers. In FY23, as a result of rewards management system launch, all cashback p
Slide 14: Consolidated financial performance - FY22
Consolidated financial performance - FY22 14
Slide 15: Executive summary FY22 - Consolidated
Executive summary FY22 - Consolidated Balance Sheet and Franchise: 1. New loans booked increased by 46% to 24.68 MM as of 31 March 2022 as against 16.88 MM as of 31 March 2021. 2. Customer franchise increased by 19% to 57.57 MM as of 31 March 2022 as against 48.57 MM as of 31 March 2021. Operating E
Slide 16: Executive summary FY22 - Consolidated
Executive summary FY22 - Consolidated 8. The Board of Directors has recommended a dividend of $ 0.27 per equity share of the face value of $ 0.03 (1000%) for FY22. This amounts to 19.07% of the Company’s standalone profit for FY22 and is in line with the Company’s dividend distribution policy. 9. RO
Slide 17: Section 02: Bajaj Finance Limited overview
2.1 Bajaj group structure 2.2 What do we stand for 2.3 Our general long-term guidance on Financial metrics shareholder profile Section 02 2.4 Key strategic differentiators Bajaj Finance Limited Our shareholder profile overview 2.5 2.6 15-years financial snapshot 2.7 Product suite 2.8 Executive summa
Slide 18: Bajaj group structure
Bajaj group structure Bajaj Holdings & Investment Ltd (BHIL) (Listed) 1 2 39.16% 33.43% Bajaj Auto Ltd Bajaj Finserv Ltd 2 (Listed) (Listed) Auto business arm Financial services arm 80.13% 100% 74% 74% 52.49% 3 Bajaj Finance Ltd Bajaj Allianz Life Bajaj Allianz Bajaj Finserv Direct Bajaj Finserv Hea
Slide 19: What do we stand for
What do we stand for “Non-bank with strategy & structure of a bank” “Focused on mass affluent & above clients with a strategy to cross sell” “Diversified financial services strategy with an optimal mix of risk and profit to deliver a sustainable business model” “Business construct to deliver a susta
Slide 20: General long-term guidance on financial metrics
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% 4%-4.5% 19%-21% 20
Slide 21: 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 57.57 MM Centre of Excellence for each business vertical to bring Strong focus on c
Slide 22: Our shareholder profile
Our shareholder profile Top 20 investors & their holdings As on 31 As on 31 As on 31 S.No Name of Shareholder Mar 22 Dec 21 Mar 21 1 BAJAJ FINSERV LTD 52.49% 52.65% 52.74% 2 GOVERNMENT OF SINGAPORE 3.19% 3.13% 4.20% FII & FPI 3 MAHARASHTRA SCOOTERS LIMITED 3.13% 3.14% 3.15% AXIS MUTUAL FUND TRUSTEE
Slide 23: 15-years financial snapshot
15-years financial snapshot Values in MM USD 1 – INR 75 CAGR Financials snapshot @ FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 (15 yrs.) AUM 330 339 538 1,010 1,748 2,336 3,208 4,321 5,897 8,026 10,990 15,452 19,620 20,393 26,327 37% Income from operations 67 80 122 18
Slide 24: Product suite
Product suite BAJAJ FINANCE LIMITED Partnerships Consumer SME Commercial Rural Deposits Payments & Services 1. Consumer Durable Loans 1. Unsecured 1. Loan against securities 1. Consumer Durable 1. Retail Term 1. PPI 1. Life Insurance Working Capital Loans Deposits 2. UPI Distribution 2. Digital Prod
Slide 25: Executive summary – Consolidated
Executive summary – Consolidated Overview • 35-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
Slide 26: Executive summary – Bajaj Finance Limited
Executive summary – Bajaj Finance Limited Overview • Focused on Consumer, Rural, SME, Commercial and Payments businesses • Strategic business unit organization design supported by horizontal common utility functions to drive domain expertise, scalability and operating leverage • Focused on cross sel
Slide 27: 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 • Focused on accelerating used car financing business (average ticket size of ~ $ 9k) • Focused on affl
Slide 28: Executive summary – Bajaj Housing Finance Ltd.
Executive summary – Bajaj Housing Finance Ltd. Bajaj Housing • A 100% subsidiary of Bajaj Finance Limited, registered with National Housing Bank as a Housing Finance Company Finance • Independent organization design having all dedicated functions and units to drive domain expertise, scalability and
Slide 29: Executive summary – Bajaj Housing Finance Ltd.
Executive summary – Bajaj Housing Finance Ltd. Lease Rental • Offers loan against lease rentals to high-net-worth individuals and developers on commercial property leased mainly to Discounting corporate tenants • Offers construction finance for commercial properties to existing LRD customers • All l
Slide 30: Executive summary – BFSL
Executive summary – BFSL Bajaj Financial • A 100% subsidiary of Bajaj Finance Limited, registered with Securities and Exchange Board of India (SEBI) Securities Limited • Member of Stock Exchanges (NSE and BSE), Depositaries (NSDL & CDSL) and AMFI for distribution of Mutual Funds • Offers Capital Mar
Slide 31: Section 03: Financial performance
Financial statement summary – 3.1 Consolidated Section 03 Financial statement summary – Financial performance 3.2 Bajaj Finance Limited Financial statement summary – 3.3 Bajaj Housing Finance Limited 31
Slide 32: Financial statement summary – Consolidated
Financial statement summary – Consolidated Values in MM USD 1 – INR 75 Financials snapshot Q4 FY22 Q4 FY21 Y-o-Y FY22 FY21 Y-o-Y Assets under management 26,327 20,393 29% 26,327 20,393 29% Assets under finance 25,523 19,558 30% 25,523 19,558 30% Interest income 982 805 22% 3,636 3,107 17% Fee and ot
Slide 33: Financial statement summary – Bajaj Finance Ltd.
Financial statement summary – Bajaj Finance Ltd. Values in MM USD 1 – INR 75 Financials snapshot Q4 FY22 Q4 FY21 Y-o-Y FY22 FY21 Y-o-Y Assets under management 19,566 15,389 27% 19,566 15,389 27% Assets under finance 19,237 15,079 28% 19,237 15,079 28% Interest income 851 705 21% 3,164 2,723 16% Fee
Slide 34: Financial statement summary – BHFL
Financial statement summary – BHFL Values in MM USD 1 – INR 75 Financials snapshot Q4 FY22 Q4 FY21 YoY FY22 FY21 YoY Assets under management 7,110 5,183 37% 7,110 5,183 37% Assets under finance 6,198 4,456 39% 6,198 4,456 39% Interest income 128 99 29% 464 384 21% Fee and other income 11 12 (8%) 30
Slide 35: Section 04: Asset liability management
4.1 Conservative leverage standards – Bajaj Finance Limited 4.2 Resilient business model – Consolidated Section 04 Behaviouralized ALM – Bajaj Finance 4.3 Limited Asset liability management Behaviouralized ALM – Bajaj Housing 4.4 Finance Limited 4.5 Disciplined ALM Management – Bajaj Finance Limited
Slide 36: 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 7.0 6.8 28.34% 28.56% 6.6 27.70% 6.3 26.96% 27.22% 6.2 6.3 25.0% 25.10% 25.40% 24.90% 24.7% 24.44% 24.75% 5.4 5.1 20.7% 4.8 4.8 4.9 * 20.3% 21.3% 4.7 4.6 19.5% 19.7% 19.1% 18.0% 16.2% 16.1% 16.3% 14.2% 14.6% 5.7% 5.0% 4.4% 3.8%
Slide 37: Resilient business model – Consolidated
Resilient business model – Consolidated 46.0% 45.0% 43.1% 48.8% 41.8% 46.5% 47.5% 41.4% 42.3% 38.1% 35.3% 33.5% 35.6% 38.4% 35.4% 34.7% 36.0% 30.7% 34.6% 33.3% 27.8% 29.9% 28.4% 27.2% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 7.84% 7.11% 6.77% 6.72% 6.71% 3.6% 3.3% 3.5% 3.7% 3.9% 4.1% 4.1% 3.1% 5.1%
Slide 38: Behaviouralized ALM as of 31 March 2022 – BFL
Behaviouralized ALM as of 31 March 2022 – BFL Values in MM USD 1 – INR 75 Particulars 1-7 D 8-14 D 15-30 D >1-2 M >2-3 M >3-6 M >6 M-1 Y >1-3 Y >3-5 Y >5 Y Total Cash & Investments 85 169 227 148 27 660 - 318 85 1,182 2,903 Advances 1,353 212 537 903 884 2,173 3,234 6,211 2,497 1,687 19,691 Other in
Slide 39: Behaviouralized ALM as of 31 March 2022 – BHFL
Behaviouralized ALM as of 31 March 2022 – BHFL Values in MM USD 1 – INR 75 Particulars 1-7 D 8-14 D 15-30 D >1-2 M >2-3 M >3-6 M >6 M-1 Y >1-3 Y >3-5 Y >5-7 Y >7-10 Y >10 Y Total Cash & Investments 92 60 - - - - - - - - - - 221 Advances 62 43 56 124 119 354 596 1,713 1,086 743 682 619 6,198 Other in
Slide 40: Disciplined ALM Management - BFL
Disciplined ALM Management - BFL Cumulative gap upto 1 month Cumulative gap upto 12 month 220% 216% 192% 178% 160% 141% 119% 120% 96% 61% 80% 76% 71% 51% 48% 64% 57% 54% 50% 31% 44% 38% 32% 4% Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Mar'20 Mar'21 Jun'21 Sept'21 Dec'21 Mar'22 40
Slide 41: Consolidated Liability mix over last 10 years
Consolidated Liability mix over last 10 years 3% 4% 4% 4% 4% 3% 5% 5% 8% 3% 10% 5% 8% 13% 4% 12% 7% 6% 7% 7% 4% 13% 3% 3% 3% 3% 2% 2% 3% 7% 6% 4% 33% 38% 35% 25% 36% 35% 36% 37% 38% 40% 36% 40% 45% 36% 31% 30% 29% 29% 28% 58% 54% 48% 34% 53% 35% 25% 20% 21% 20% 20% 19% 17% 12% 13% 6% 8% 0% 1% 4% Mar
Slide 42: Section 05: Customer franchise and distribution reach
5.1 Customer franchise Section 05 Geographic presence Customer franchise and 5.2 distribution reach 5.3 Strong distribution reach 42
Slide 43: Customer franchise
Customer franchise Q4 FY21 Q4 FY22 Q3 FY22 Total Franchise 57.57 MM 55.36 MM 48.57 MM 38.50 MM Credit segment filter 45.21 MM 43.45 MM 37.10 MM Overall Cross sell franchise 43.62 MM 41.87 MM Non delinquent 32.63 MM customers 38.60 MM 37.23 MM Cross sell franchise 26.89 MM 32.77 MM 31.26 MM (55.3%)*
Slide 44: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 31 Dec 31 Mar Geographic Presence 2018 2019 2020 2021 2021 2022 Urban lending branches 730 927 1,035 1,298 1,368 1,368 Rural lending branches 602 903 1,357 1,690 2,055 2,136 Total Bajaj Finance presence 1,332 1,830 2,392 2,988 3,423 3,504 Map not to sc
Slide 45: Strong distribution reach
Strong distribution reach Active distribution 31 Mar 2018 31 Mar 2019 31 Mar 2020 31 Mar 2021 31 Dec 2021 31 Mar 2022 Consumer durable stores – Urban 15,500+ 20,400+ 24,200+ 26,400+ 29,500+ 30,600+ Consumer durable stores – Rural 8,200+ 14,500+ 19,600+ 24,000+ 27,900+ 29,800+ Digital product stores
Slide 46: Section 06: Business segment wise AUM
Section 06 Business segment wise AUM 46
Slide 47: Business segment wise AUM - Consolidated
Business segment wise AUM - Consolidated Values in MM USD 1 – INR 75 Consolidated BHFL as of Consolidated Composition as Composition BFL as of Growth Assets Under Management as of 31 March as of of as of 31 March 2022 YoY 31 March 2021 2022 31 March 2022 31 March 2021 31 March 2022 Auto Finance Busi
Slide 48: Section 07: Update on credit quality
7.1 Provisioning Coverage - Consolidated 7.2 ECL summary – Consolidated Section 07 7.3 ECL summary – Bajaj Housing Finance Update on credit quality Limited 7.4 Stagewise ECL provisioning 7.5 Portfolio credit quality - Consolidated 48
Slide 49: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated Values in MM USD 1 – INR 75 AUM PCR GNPA % NNPA % Particulars 31 Mar 22 GNPA NNPA (%) 30 Sep 21 31 Dec 21 31 Mar 22 30 Sep 21 31 Dec 21 31 Mar 22 Auto Finance Business 1,359 165 83 50% 16.00% 11.04% 11.01% 9.25% 5.84% 5.83% Sales Finance Business 1,997 58 27 54%
Slide 50: ECL summary – Consolidated
ECL summary – Consolidated Asset categorization 31 Mar 2021 30 Jun 2021 30 Sep 2021 31 Dec 2021 31 Mar 2022 Stage 1 & 2 (represents standard assets) 98.21% 97.04% 97.55% 98.27% 98.40% Stage 3 (classified as NPA) 1.79% 2.96% 2.45% 1.73% 1.60% Stage 3 (not classified as NPA) - - - - - Summary of stage
Slide 51: ECL summary – Bajaj Housing Finance Limited
ECL summary – Bajaj Housing Finance Limited Asset categorization 31 Mar 2021 30 Jun 2021 30 Sep 2021 31 Dec 2021 31 Mar 2022 Stage 1 & 2 (represents standard assets) 99.65% 99.72% 99.65% 99.65% 99.69% Stage 3 (represents GNPA) 0.35% 0.28% 0.35% 0.35% 0.31% Summary of stage wise assets and provision
Slide 52: Stagewise ECL provisioning as of 31 March 2022
Stagewise ECL provisioning as of 31 March 2022 Values in MM USD 1 – INR 75 Gross Assets Receivable ECL Provision PCR % Stage 2 Stage 2 Stage 2 Stage 1 Stage 3 Stage 1 Stage 3 Stage 1 Stage 3 OTR* Normal OTR* Normal OTR* Normal Auto Finance Business 1,177 - 158 165 19 - 40 83 1.6% - 25.0% 50.0% Sales
Slide 53: 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 5+ Bucket 1 98.55% 98.65% 92.10% 98.92% 99.52% 99.05% 99.58% 99.72% 97.89% 1 85.81% 86.00
Slide 54: 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 Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1 98.35% 98.27% 93.43% 97.19% 98.50% 97.30% 98.51% 98.73% 98.93% 1 99.21% 99.33% 92.84% 99
Slide 55: Portfolio credit quality – Consolidated
Portfolio credit quality – Consolidated Home loans Commercial lending Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket • Commercial lending business portfolio is 99.82% current. There 1 99.63% 99.60% 98.31% 98.67% 99.56% 98.31% 99.05% 99.07% 99.45% are two NPA accounts of $ 6 M
Slide 56: Thank You
BAJAJ FINANCE LIMITED Q4 FY22 Investor Presentation Thank You
Slide 57: Annexure
BAJA) FINANCE LIMITED Annexure
Slide 58: Purpose of business transformation
As a Company, we believe that the purpose of any business transformation is a means to an end. It should result in stronger growth momentum, superior customer experience, better cross sell, lower risk and/or improved operating efficiencies. We are pursuing business transformation singularly with tha
Slide 59: Business transformation phase 1 status
At the outset, “All business transformation takes time, team and technology.” It’s been 15 months since we started phase 1 of business transformation project. Due to wave 2, it got delayed by 3 months. Phase 1 of the digital platform has now gone live with a staggered release methodology. The Compan
Slide 60: '3-in-1' digital platform – Phase 1 feature set
‘3-in-1’ digital platform – Phase 1 feature set Payments UPI Wallet EMI Card Credit Card 6-in-1 Payment Checkout Bill Payment Network CD Network DPF Network REMI Network LSF Network LCF Network E-Com Network Coaching Network Marketplace & Health RX No cost EMI Marketplace Insurance Marketplace Inves
Slide 61: '3-in-1' digital platform – Phase 1 enablers
‘3-in-1’ digital platform – Phase 1 enablers Stimulation Offers and Promotions Search Service Sales Engagement Utilities • Notification Engine • Dynamic Banners • Search • Raise a Request • 5 Mins Call Back • Social Share • Locate Us- Maps Core Components • Nudges • Offers • Content Streams • FAQ •
Slide 62: Phase 2 focus of transformation journey
Previous 2 slides have covered the phase 1 of transformation journey. Phase 1 was focused on creating a strong, stable and scalable foundation. Phase 2 will focus on new to Bajaj customer journeys, introducing new features and functionalities, augmenting current feature sets and nuanced journeys for
Slide 63: Digital app platform – Phase 2 feature set
Digital app platform – Phase 2 feature set UPI 6-in-1 Payment 6-in-1 Check Out for QR Based P2M Payments Wallet EMI Card Credit Card Checkout Bill Payment POS terminals Partners Transaction Network CD Network DPF Network REMI Network LSF Network LCF Network E-Com Network Coaching Network P2M Network
Slide 64: Digital app platform – Phase 2 enablers
Digital app platform – Phase 2 enablers Stimulation Offers and Promotions Search Service Sales Engagement Utilities • Notification Engine • Search • Raise a Request • 5 Mins Call Back • Social Share • Locate Us- Maps Core Components• Nudges • Dynamic Banners • Content Streams • FAQ • Track and Resum
Slide 65: Phase 2 delivery timeline
The Company plans to deliver Phase 2 in 8 to 9 months subject to no major disruption as a result of current & new Covid waves. Unlike phase 1, phase 2 will get delivered in 3-4 sprints. The first update on phase 2 will be provided in July quarter results. During this period, the Company remains comm
Slide 66: 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 “Bajaj Finance”. By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation doe