Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Q2 FY21 Earnings Presentation
47 slides from Bajaj Finserv's earnings presentation, Oct 21, 2020
Slide 1: Cover letter to stock exchanges for Q2 investor presentation
~BAJAJ \lii1FINSERV 21 October 2020 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-Kurla
Slide 2: Bajaj Finserv Limited Investor Presentation – Q2 FY21
BAJAJ FINSERV LIMITED Investor Presentation – Q2 FY21* * Financial year 2020-21
Slide 3: Bajaj Group Structure
Bajaj Group Structure Bajaj Holdings & Investment Limited (BHIL) 51% 33.43%@ 39.16%@ Maharashtra Scooter Bajaj Auto Limited Bajaj Finserv Limited Limited 52.74%@ 74% 74% Bajaj Finance Limited Bajaj Allianz General Insurance Bajaj Allianz Life Insurance • Set up in 1987: BFL is a 33 year old Company
Slide 4: Bajaj Finserv's Vision – A diversified financial services group with a pan-India presence
Bajaj Finserv’s Vision – A diversified financial services group with a pan-India presence Life cycle needs of Investment/ Asset Asset Family Income Individual & Wealth acquisition protection Protection protection SME management customers Lending General Insurance Health Insurance Life Insurance Life
Slide 5: Bajaj Finserv – A resilient diversified financial services business
Bajaj Finserv – A resilient diversified financial services business BFL’s robust liquidity management framework has ensured that it has liquidity to meet its debt service obligations, Bajaj Finance despite it having to offer repayment moratoriums to its Limited customers. BFL’s excellent risk manage
Slide 6: Bajaj Finserv performance highlights – Q2 FY21
Bajaj Finserv performance highlights – Q2 FY21 All Figures in Rs Million Performance Highlights of Q2 FY21 over Q2 FY20 (Ind AS) 150,516 9,863 336,879 35,972 CY 6% -18% 29% 8% PY 142,242 12,037 260,546 33,248 Total Revenue PAT* Net Worth Net Worth (Consolidated) (Consolidated) (Consolidated) (Standa
Slide 7: Consolidated profit components – Q2 FY21
Consolidated profit components – Q2 FY21 All Figures in Rs Million Consolidated profit components for Q2 FY21 (Ind AS) #Net Negative impact on PAT of Rs. 3,590 Mn Intercompany on account of: adjustments MTM* Gains on BAGIC & BALIC investments - Bajaj Finserv- Rs 1,820 Mn (post-tax) Standalone 17
Slide 8: H1 FY21 Highlights
H1 FY21 Highlights All Figures in Rs Million Highlights of Group Companies BAJAJ FINSERV# H1 FY21 H1 FY20 Growth BAJAJ FINANCE # H1 FY21 H1 FY20 Growth Total Revenue 292,436 264,965 10% AUM 1,370,903 1,355,328 1% Net worth 336,879 260,546 29% Total Income 131,730 121,309 9% PAT 22,014 20,491 7% PAT
Slide 9: Bajaj Finance Limited
BAJAJ FINSERV Bajaj Finance Limited
Slide 10: 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 11: 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 1,507 locations products & furniture annual sales of around medium and l
Slide 12: BFL's – Summary on Covid-19
BFL’s – Summary on Covid-19 In Q2, with gradual unlock of the economy, focus was on restarting all the businesses, creating ‘back to growth’ plans for businesses, continuous risk modelling to refine loss estimates, collection capacity augmentation and begin implementation of our business transform
Slide 13: BFL – Key Highlights
BFL – Key Highlights Q2 2020-21 AUM growth moderated to 1% YoY due Covid-19 pandemic and economic slowdown. It stood at Rs. 137,090 crore in Q2 FY21. New loans booked during Q2 FY21 declined by 44% from 6.47 Mn in Q2 FY20 to 3.62 Mn in Q2 FY21. However, company doubled new loans booked as compar
Slide 14: BFL – Key Highlights (Subsidiaries)
BFL – Key Highlights Q2 2020-21 Subsidiaries (included in BFL Consolidated Performance) Bajaj Housing Finance Ltd (BHFL) AUM grew by 30% to Rs. 33,463 crore as of 30 September 2020 from Rs. 25,714 crore as of 30 September 2019. BHFL’s Net Interest Income for Q2 FY21 contracted by 6% to Rs. 248 c
Slide 15: BFL – Q2 FY21 highlights
BFL – Q2 FY21 highlights All Figures in Rs Million Performance Highlights of Q2 FY21 over Q2 FY20 (Ind AS) CY 1,317,649 65,233 9,649 1% 3% -36% PY 1,307,903 63,231 15,063 Book Size Total Income Profit After Tax CY 0.7% 2.9% • Borrowing mix is not excessively dependent on banks. (Mix of 37: 42 : 17 :
Slide 16: BFL: Book Size and Revenue
BFL : Book Size and Revenue All Figures in Rs Million FY20 Book Size Q2 FY21 FY20 Total Income Increase of 26% Increase of 1% Increase of 43% 263,856 1,413,760 1,307,903 1,317,649 1,125,128 185,002 Q2 FY21 Increase of 3% 63,231 65,233 FY19 FY20 Q2 FY20 Q2 FY21 FY19 FY20 Q2 FY20 Q2 FY21 Net Interest
Slide 17: BFL: Loan Loss Provision and Operating Expenses
BFL : Loan Loss Provision and Operating Expenses All Figures in Rs Million Loss Provision and Net NPA% Loan losses and provisions (expected credit loss) for 39,295 40,000 2.00% Q2 FY21 was Rs. 1,700 Cr as against Rs. 594 Cr in Q2 FY20. 30,000 Based on Hon’ble Supreme Court’s interim order of not
Slide 18: Bajaj Allianz General Insurance
Bajaj Allianz General Insurance 17
Slide 19: 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 20: BAGIC's – Summary on Covid-19
BAGIC’s – Summary on Covid-19 Since easing of lockdown from June, new sales in few segments have started getting traction Compact car sales have seen a uptake leading to growth in 4W sales as people are preferring to use their own transport during the pandemic; BAGIC has gained significant groun
Slide 21: BAGIC – Key Highlights
BAGIC – Key Highlights Q2 2020-21 BAGIC GWP de-grew by 3 % in Q2 FY21 vs Industry growth of 3% (vs Private players growth of 5%) and 9.5% de-growth in H1 FY21 vs industry de-growth of 1% (vs Private players de-growth of 2%) De-growth in GWP is mainly contributed by CV which de-grew by 35%, drive
Slide 22: BAGIC: Q2 FY21 highlights
BAGIC : Q2 FY21 highlights All Figures in Rs Million Performance Highlights of Q2 FY21 over Q2 FY20 CY 41,556 20,859 19,859 3,323 -3% -7% -7% 13% PY 42,793 22,497 21,312 2,937 Gross Written Net Written Premium Net Earned Premium Profit After Tax Premium 5.1% Ex Crop GWP was Rs. 23,966 Mn in Q2 FY2
Slide 23: BAGIC: Combined Ratio
BAGIC : Combined Ratio Combined Ratios (CoR) 100.8% 102.7% 96.7% 97.4% 92.3% FY18 FY19 FY20 Q2 FY20 Q2FY21 1. Combined Ratios are in accordance with the Master Circular on ‘Preparation of Financial statements of General Insurance Business’ issued by IRDA effective from 1st April, 2013. (Net claims i
Slide 24: BAGIC: Profit after tax and capital efficiency
BAGIC : Profit after tax and capital efficiency All Figures in Rs Million PAT Q2 FY21 PAT growth of 13% 9,988 9,212 7,799 Rs. Million 2,937 3,323 FY18 FY19 FY20 Q2 FY20 Q2 FY21 Total Capital infused is Rs.2,768 Mn BAGIC - Capital Invested - Networth Accumulated profit* 96% of Net worth as on 30 Sep
Slide 25: 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 (Rs. Bn.) Q2 FY21 GDPI growth of 6% 1,617 1,787 1,415 930 1,056 737 477 504 678 687 730 292 317 186 187 FY18 FY19 FY20 Q2 FY20 Q2 FY21 PSU Private Insurers* Industry BAGIC Premium Trend 128,331 Q2 FY21
Slide 26: BAGIC: Balanced product mix
BAGIC : Balanced product mix Business Mix 7% 9% 11% 6% 5% 20% 13% 19% 40% 42% 15% 15% 13% 9% 14% 11% 6% 5% 10% 13% 5% 7% 5% 6% 7% 44% 44% 41% 32% 27% FY18 FY19 FY20 Q2 FY20 Q2 FY21 Motor (Retail) Health (Retail) Group Health Prop, Liability, Engg Agri (Crop Insurance) Others BAGIC’s GWP ex-crop, G
Slide 27: BAGIC: Diversified Channel Mix
BAGIC: Diversified Channel Mix Channel Mix 23% 27% 31% 35% 45% 37% 32% 37% 41% 27% 7% 4% 9% 12% 12% 3% 8% 3% 9% 7% 20% 21% 20% 16% 14% FY18 FY19 FY20 Q2 FY20 Q2 FY21 Individual Agents Corporate Agents - Banks Corporate Agents - Others Brokers Direct Business BAGIC has the largest network of bancas
Slide 28: BAGIC: Assets Under Management
BAGIC : Assets Under Management AUM (cash and investments) Q2 FY21 Increase of 14% 206,262 BAGIC continues to 187,458 181,387 grow its AUM 172,367 strongly 148,229 Investments are largely in Rs. Million fixed income securities Investment Leverage of 3.06x as on 30 Sep 2020 FY18 FY19 FY20 Q2 FY20 Q2
Slide 29: BAGIC's Digital Penetration
BAGIC’s Digital Penetration Digital Platforms Insta Pay Services Campaigns In addition to agent’s app New express bitly and platform, mediums Apart from Google Pay and links with used Phone – Pe, 48 other prepopulated details Purchase & Renewals services providers being (1 Cr+ policies issued, 90%
Slide 30: Bajaj Allianz Life Insurance
Bajaj Allianz Life Insurance 29
Slide 31: BALIC – Key Strategic Differentiators
BALIC - KEY STRATEGIC DIFFERENTIATORS STRATEGY • Continued focus on sustainable and profitable growth by maintaining balanced product mix and investment in retail growth engines • Business construct is to maximize customer benefits while gaining market share in retail space, maintaining shareholder
Slide 32: BALIC's – Summary on Covid-19
BALIC’s – Summary on Covid-19 New business was challenged for the Life insurance sector with initial covid-19 related lockdowns. Despite the lockdowns, BALIC consistently reported industry beating individual rated premium growth. No. of branches open have almost reached the pre – covid levels bu
Slide 33: BALIC – Key Highlights
BALIC – Key Highlights Q2 2020-21 Despite Covid-19 related lockdown, BALIC had an market beating Individual Rated premium growth of 19% in Q2 FY21 vs Industry reporting a flat growth (Private sector de-grew by 3%) Individual Rated premium growth of 11% in H1 FY21 vs Industry degrowth of 7% (Priv
Slide 34: BALIC – Q2 FY21 highlights
BALIC – Q2 FY21 highlights All Figures in Rs. Million Performance Highlights of Q2 FY21 over Q2 FY20 CY 5,351 8,300 13,046 26,771 19% 8% 31% 20% PY 4,502 7,720 10,005 22,356 Individual Rated NB Group NB Renewal Premium Gross Written Premium CY 977 611 730% Solvency Ratio -53% 103% as on 30 Sep 2020
Slide 35: BALIC: Ticket Size
BALIC : Ticket Size All Figures in Rs. Regular Premium Ticket Size Regular Premium Ticket Size (Agency) FY20 Q2 FY21 FY20 Increase of Q2 FY21 Decrease of increase of 10% decrease of 13% 14% 19% 62,916 85,211 86,935 61,716 74,714 70,191 56,128 54,457 FY19 FY20 Q2 FY20 Q2 FY21 FY19 FY20 Q2 FY20 Q2 FY2
Slide 36: BALIC: Persistency
BALIC : Persistency Persistency 13th Month Persistency 25th Month 80% 71% 80% 71% 79% 70% 77% 68% Persistency - 13th Month Persistency - 25th Month FY19 FY20 H1 FY20 H1 FY21 FY19 FY20 H1 FY20 H1 FY21 Persistency 37th Month Persistency 49th Month Persistency 61st Month 60% 51% 40% 41% 51% 40% 58% 57%
Slide 37: BALIC: Individual Rated New Business
BALIC : Individual Rated New Business All Figures in Rs Million Individual Rated NB Individual Rated NB Agency FY20 Increase of 11% FY20 decrease of 10% 19,271 12,039 17,420 Q2 FY21 growth is 10,826 Q2 FY21 decrease 19% of 11% 4,502 5,351 2,668 2,380 FY19 FY20 Q2 FY20 Q2 FY21 FY19 FY20 Q2 FY20 Q2 FY
Slide 38: BALIC: Diversified Distribution Mix
BALIC : Diversified Distribution Mix Individual Rated NB Channel Mix BALIC embarked on diversifying its distribution mix, scaling up alternate channels and enabling wider 10% 11% 11% 11% presence by exploring alternate partnerships 20% 30% Reduced over reliance on Agency channel with 33% 45% age
Slide 39: BALIC: Balanced product mix
BALIC : Balanced product mix Individual Rated Mix Share of Non-ULIP business in individual business increasing 36% Individual - Unit Linked 51% 49% 60% 5% Individual - Non Par Protection 1% 0% 1% 17% 36% Individual - Non Par Savings 9% 20% Individual - Par 30% 28% 34% 23% FY19 FY20 Q2 FY20 Q2 FY21 G
Slide 40: BALIC: Assets Under Management
BALIC : Assets Under Management AUM (Mix) • AUM as on 30 Sep 2020 grew by 10%; Growth in UL AUM 644 stands at 6% primarily due to 566 561 583 Covid-19 impact on stock 400 market; Traditional AUM grew 336 365 352 by 14% 230 231 244 196 • Of the UL Funds of Rs.244 Bn., 59% is equity as on 30 Sep 2020
Slide 41: Digital Initiatives to offer next in class customer experience
Digital Initiatives to offer next in class customer experience Smart Assist WhatsApp Co-Browsing capabilities : First Real Time servicing Platform time in India • Face-2-Face meetings NOW Screen-2- • 530,000+ Transactions Done in H1 FY21 Screen (device agnostic platform for customers) • New Business
Slide 42: MCEV Update
MCEV Update All Figures in Rs Million Particulars H1 FY21 H1 FY20 FY20 Annualized Premium** (ANP) 10,456 9,749 22,945 Gross New Business Value* (NBV) 2,258 1,707 4,351 Net New Business Value*+(NBV) 611 295 2,266 Gross Margins on ANP+ 21.6% 17.5% 19.0% Net Margins on ANP 5.9% 3.0% 9.9% Embedded Value
Slide 43: Additional Information – Claims & Investments
Additional Information – Claims & Investments
Slide 44: BAGIC: LOB wise Net Claim ratio (Major LOBs)
BAGIC : LOB wise Net Claim ratio (Major LOBs) Net Claim Ratio Line of Business Q2 FY21 Q2 FY20 H1 FY21 H1 FY20 Fire 43.9% 115.8% 76.2% 105.7% Marine Cargo 104.4% 94.2% 90.2% 86.9% Motor OD 40.0% 64.5% 45.4% 65.7% Motor TP 78.9% 65.5% 79.4% 65.8% Motor Total 62.9% 65.1% 65.5% 65.8% Engineering -7.3%
Slide 45: Exposure to Downgraded Investments (Debt): BALIC & BAGIC
Exposure to Downgraded Investments (Debt) : BALIC & BAGIC THERE WERE NO ADDITIONAL IMPAIRMENTS IN Q2 FY21 & BOTH COMPANIES ARE ADEQUATELY PROVISIONED BALIC Type of Fund (BALIC) Total exposure as Of which Impairment Sr. No. Of which performing (Amt in Rs. Mn) of 30 Sep 2020 (non performing) Provided
Slide 46: 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 47: Thank You
BAJAJ FINSERV Thank You