Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q2 FY20 Earnings Presentation
39 slides from Bajaj Finserv's earnings presentation, Oct 22, 2019
Slide 1: Cover letter to stock exchanges
~BAJAJ \Iii FINSERV 22 October 2019 To To Corporate Relations Department. Corporate Listing Department. BSE Limited National Stock Exchange of India Ltd 1st Floor, New Trading Ring, Exchange Plaza, 5th Floor Rotunda Building, P J Tower, . Plot No.C-1, G Block, Dalal Street, Mumbai 400 001 Bandra-Kur
Slide 2: Bajaj Finserv Limited Investor Presentation – Q2 FY20
BAJAJ FINSERV LIMITED Investor Presentation – Q2 FY20* * Financial year 2019-20
Slide 3: Bajaj Finserv – Group
Bajaj Finserv – Group 54.81% 74% 74% Bajaj Allianz Bajaj Allianz Bajaj Finance Limited General Insurance # Life Insurance # 100% Bajaj Housing Finance Limited# Bajaj group has a long track record of building large scale, profitable businesses Bajaj Finserv is a diversified financial services gro
Slide 4: Bajaj Finserv – A diversified financial services group
Bajaj Finserv – A diversified financial services group Bajaj Finance Limited • Diversified across consumer, payments, rural, SME, commercial & mortgage lending • Credit rating of AAA/Stable by CRISIL, India Ratings, CARE Ratings and ICRA • Credit rating for short term debt program is A1+ by CRISIL,
Slide 5: Bajaj Finserv performance highlights
Bajaj Finserv performance highlights All Figures in Rs Million Performance Highlights of Q2 FY20 over Q2 FY19 (Ind AS) 142,242 12,037 260,546 34,736 CY 47% 71% 21% 10% PY 96,984 7,040 215,187 31,501 Total Revenue PAT* Net Worth Net Worth (Consolidated) (Consolidated) (Consolidated) (Standalone) • Ba
Slide 6: Consolidated profit components
Consolidated profit components All Figures in Rs Million Consolidated profit components for Q2 FY20 (Ind AS) Intercompany adjustments Bajaj Finserv- Standalone (3,503) Others 3,450 Life 12,037 Insurance (57) Bajaj Finserv General - Insurance 1,593 Consolidated Bajaj Finance 2,299 8,255 Consolidated
Slide 7: H1 FY20 Highlights
H1 FY20 Highlights All Figures in Rs Million Highlights of Group Companies BAJAJ FINSERV$# H1 FY20 H1 FY19 Growth BAJAJ FINANCE$# H1 FY20 H1 FY19 Growth Total Revenue 264,965 184,695 43% AUM 1,355,328 980,126 38% Net worth 260,546 215,324 21% Total Income 121,308 82,111 48% PAT 20,491 15,298 34% PAT
Slide 8: Bajaj Finance Limited
BAIA FINSERV Bajaj Finance Limited
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: BFL: Business Segments
BFL : Business Segments 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 short, model in 1,041 locations products & furniture annual sales of around medium and l
Slide 11: BFL – Key Highlights
BFL – Key Highlights FY 2019-20 Strong AUM growth YoY across all lines of businesses in the company (YoY growth for Consumer B2B 35%, Consumer B2C 46%, Rural 55%, SME 34%, Mortgages 43%, Commercial 14%). New customer acquisition for the quarter remained robust at 1.92 MM. Overall franchise stood
Slide 12: BFL – Q2 FY20 highlights
BFL – Q2 FY20 highlights All Figures in Rs Million Performance Highlights of Q2 FY20 over Q2 FY19 (Ind AS) CY 1,307,903 63,226 15,063 38% 48% 63% PY 944,779 42,733 9,235 Book Size Total Income Profit After Tax CY 1.2% 7.0% • Borrowing mix is not excessively dependent on banks. (Mix of 38 : 47 : 10 :
Slide 13: BFL: growth momentum continues
BFL : growth momentum continues All Figures in Rs Million FY19 Total Income Increase of 45% 185,018 Q2 FY20 127,568 Increase of 48% 63,226 42,733 FY18 FY19 Q2 FY19 Q2 FY20 Net Interest Income FY19 118,782 Increase of 46% Q2 FY20 Increase of 48% 81,429 39,991 27,079 FY18 FY19 Q2 FY19 Q2 FY20 Bajaj Fi
Slide 14: BFL: Strong profit growth aided by low NPA and control on Opex
BFL : Strong profit growth aided by low NPA and control on Opex All Figures in Rs Million Loss Provision and Net NPA% 16,000 15,014 2.0% 14,000 12,000 10,305 10,000 8,000 3,146 5,942 6,000 0.43% 4,000 0.63% 0.65% 2,000 0.53% 0 0.0% FY18 FY19 Q2 FY19 Q2 FY20 Loss Provision (Rs. millions) Net NPA %* O
Slide 15: Bajaj Allianz General Insurance
Bajaj Allianz General Insurance 14
Slide 16: BAGIC – Key Strategic Differentiators
BAGIC – KEY STRATEGIC DIFFERENTIATORS STRATEGY Strive for market share growth in chosen segments 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
Slide 17: BAGIC – Key Highlights
BAGIC – Key Highlights FY 2019-20 Industry beating YoY GDPI growth of 57% in Q2 FY20 vs Industry growth of 22% and 38% growth in H1 FY20 vs industry growth of 16%. BAGIC’s Ex-Crop growth was 14% during Q2 FY20 and 13% during H1 FY20 Combined ratio stood at 102.7% in Q2 FY20 v/s 97.2% in Q2 FY19
Slide 18: BAGIC: Q2 FY20 highlights
BAGIC : Q2 FY20 highlights All Figures in Rs Million Performance Highlights of Q2 FY20 over Q2 FY19 CY 42,793 22,497 21,312 2,937 57% 19% 27% 62% PY 27,184 18,851 16,794 1,821 Gross Written Net Written Premium Net Earned Premium Profit After Tax Premium 5.4% Ex Crop GWP was Rs. 25,499 Mn in Q2 FY2
Slide 19: BAGIC: Combined Ratio trend
BAGIC : Combined Ratio trend Combined Ratios 102.7% 96.8% 96.7% 97.2% 92.3% FY17 FY18 FY19 Q2 FY19 Q2 FY20 • Impact due to higher number of flood claims amounted to Rs.760 Mn. on underwriting result during Q2 FY20 • Excluding the Impact of flood claims, the CoR is at 99.1% for Q2 FY20 1. Combined Ra
Slide 20: BAGIC: Profit after tax and capital efficiency
BAGIC : Profit after tax and capital efficiency All Figures in Rs Million PAT 9,212 7,278 7,799 Rs. Million 2,937 1,821 FY17 FY18 FY19 Q2 FY19 Q2 FY20 Total Capital infused is Rs.2,768 Mn BAGIC - Capital Invested - Networth Accumulated profit* 95% of Net worth as on 30 Sep 2019 No Capital infusion s
Slide 21: BAGIC: Consistently amongst top private insurers in terms of Gross Premium
BAGIC : Consistently amongst top 2 private insurers in terms of Gross Premium Industry GDPI Trend Q2 FY20 GDPI growth 22% (Rs. Bn.) 1,617 1,415 1,199 737 930 597 390 477 602 678 687 233 292 157 185 FY17 FY18 FY19 Q2 FY19 Q2 FY20 PSU Private Insurers* Industry BAGIC Premium Trend 110,970 94,865 76,87
Slide 22: BAGIC: Balanced product mix
BAGIC : Balanced product mix Business Mix 9% 8% 8% 7% 6% Others 13% 17% 19% 20% Agri (Crop 40% Insurance) 15% 13% 14% 14% Prop, Liability, 15% Engg 7% 9% 12% 6% 5% 10% 5% 7% Group Health 7% 5% Health (Retail) 46% 44% 44% 43% 32% Motor (Retail) FY17 FY18 FY19 Q2 FY19 Q2 FY20 Ex Crop GWP Growth for
Slide 23: BAGIC: Diversified Channel Mix
BAGIC: Diversified Channel Mix Channel Mix 13% 17% Crop Insurance 19% 20% 12% 40% 5% 8% 11% Corporate Agents - 12% 7% Banks 9% 7% 21% Corporate Agents - 19% 20% 20% 9% Others 3% 9% 10% 11% 14% 16% Individual Agents 5% Direct Business 36% 37% 32% 31% 27% Brokers FY17 FY18 FY19 Q2 FY19 Q2 FY20 With
Slide 24: BAGIC - Virtual Points of Presence
BAGIC - VIRTUAL POINTS OF PRESENCE VSO Success Graph 9,000 8.4% 12.0% 8,000 10.0% 10.0% 7,000 8.2% 6,000 8.0% 6.2% 5,000 6.0% 4,000 3.9% 3,000 4.0% 2,000 2.0% 1,000 - 0.0% FY17 FY18 FY19 Q2 FY19 Q2 FY20 Rs Million VSO GWP VSO contribution GWP-Ex Crop • Initiated in August 2014 and has grown exponent
Slide 25: BAGIC: Assets Under Management continue to grow
BAGIC : Assets Under Management continue to grow AUM(cash and investments) - Rs Billion (as of end of period) Q2 FY20 Increase of 20% over Q1 FY19 181 BAGIC 172 continues to grow its AUM 148 149 strongly Investments 108 are largely in fixed income securities Investment Leverage of 3.2x as on 30 Sep
Slide 26: Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance 25
Slide 27: 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 28: BALIC – Key Highlights
BALIC – Key Highlights 2019-20 Industry beating Individual Rated Premium growth for H1 FY20 at 24% vs Industry growth of 11% (Ex-LIC Industry growth of 16%) During the quarter BALIC has signed a Corporate Agency agreement with Axis Bank Ltd as their third Life insurance partner Profit after ta
Slide 29: BALIC – Q2 FY20 highlights
BALIC – Q2 FY20 highlights All Figures in Rs. Million Performance Highlights of Q2 FY20 over Q2 FY19 CY 4,502 7,720 10,005 22,356 30% -9% 15% 7% PY 3,459 8,521 8,693 20,825 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 2,073 770% Solvency Ratio 58% as on 30 Sep 2019 PY 1,315
Slide 30: BALIC: Strong ticket size
BALIC : Strong ticket size All Figures in Rs. Regular Premium Ticket Size Regular Premium Ticket Size (Agency) Q2 FY20 62,916 Q2 FY20 increase of 15% Increase of 32% FY19 56,128 86,935 increase of 23% 54,636 FY19 Increase of 19% 74,714 45,449 65,728 62,858 FY18 FY19 Q2 FY19 Q2 FY20 FY18 FY19 Q2 FY19
Slide 31: BALIC: Persistency trend
BALIC : Persistency trend Persistency 13th Month Persistency 25th Month 79% 78% 70% 77% 78% 68% 64% 58% Persistency - 13th Month Persistency - 25th Month FY18 FY19 H1 FY19 H1 FY20 FY18 FY19 H1 FY19 H1 FY20 Persistency 37th Month Persistency 49th Month 54% 47% 47% 53% 49% 44% 49% 42% Persistency - 37
Slide 32: BALIC: Individual Rated premiums
BALIC : Individual Rated premiums All Figures in Rs Million Individual Rated NB Individual Rated NB Agency FY19 Increase FY19 Increase of 25% 17,420 of 9% Q2 FY20 increase 13,972 of 30% 12,039 Q2 FY20 increase 11,065 of 9% 4,502 3,459 2,668 2,438 FY18 FY19 Q2 FY19 Q2 FY20 FY18 FY19 Q2 FY19 Q2 FY20 I
Slide 33: BALIC: Balanced product mix
BALIC : Balanced product mix Individual Rated Mix Share of Non-ULIP business in individual business increasing 49% 60% 61% Individual - Unit Linked 72% Individual - Non Par 17% 10% 4% Individual - Par 4% 30% 35% 34% 24% FY18 FY19 Q2 FY19 Q2 FY20 Group NB Mix Share of protection business in group inc
Slide 34: BALIC: Assets Under Management
BALIC : Assets Under Management AUM (Mix) • AUM growth of 8.1% for Q2 FY20 over Q2 FY19 566 539 583 • Of the UL Funds of Rs.231 Bn., 520 59% is equity funds as on 30 336 321 352 306 Sep 2019 (60% as on 31 Mar 214 230 218 231 2019 out of the UL Funds of Rs.230 Bn.) FY18 FY19 Q2 FY19 Q2 FY20 Total Uni
Slide 35: Annexure
BAJAJ FINSERV Annexure 34
Slide 36: BAGIC: LOB wise Net Claim ratio
BAGIC : LOB wise Net Claim ratio Net Claim Ratio Line of Business Q2 FY20 Q2 FY19 H1 FY20 H1 FY19 FY19 Fire 115.8% 305.0% 105.7% 116.6% 74.4% Marine Cargo 94.2% 94.6% 86.9% 105.1% 94.0% Motor OD 64.5% 56.3% 65.7% 57.8% 60.0% Motor TP 65.5% 65.9% 65.8% 69.9% 64.5% Motor Total 65.1% 61.3% 65.8% 64.0%
Slide 37: Exposure to Downgraded Investments (Debt): BALIC & BAGIC
Exposure to Downgraded Investments (Debt) : BALIC & BAGIC Type of Fund (BALIC) Total exposure as Of which Impairment Sr. No. Of which performing (Amt in Rs. Mn) of 30 Sep 2019 (non performing) Provided for 1 PAR 3,917 3,327 590 349 2 N-PAR 1,662 1,515 147 88 3 ULIP 4,014 2,832 1,182 903 4 SH 4,780 2
Slide 38: 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 39: Thank You
BAJAJ FINSERV Thank You 38