#1BAJAJ B FINSERV Bajaj Finance Limited Q1 FY21 Investor Presentation 21 July 2020#2Presentation Path Section 01 Executive summary - Q1 FY21 Financial performance - Q1 FY21 Kil Section 03 MM Section 05 Section 07 Customer franchise and distribution reach Update on credit quality 2 25 36 43 Click on the section to view Section 02 Bajaj Finance Limited overview ✓ A Section 04 Asset liability management 12 29 Section 06 Business segment wise AUM 40 BAJAJ B FINSERV#31.1 Quarter gone by ☐ Section 01 Executive summary - Q1 FY21 1.2 Executive summary on Q1 FY21 1.3 Update on Moratorium B BAJAJ FINSERV Back 3#4Quarter gone by BAJAJ B FINSERV Q1 was a pandemic quarter. The focus was on employee safety, capital preservation, liquidity management, business scenario planning, opex management, collections capacity augmentation, customer propositions, business transformation framework and lastly but most importantly calibrated restart of business as the country started to reopen. Q1 FY21 ROE* Net NPA AUM Opex to NII PAT 1,38,055 Crore Yo Y Grow th 27.9% Q1 FY20 35.0% 962 Cr 2.9% 7% Yo Y Growth (19%) Q1 FY20 5.9% *Not annualized 0.50% Q1 FY20 0.64% Back 4#5Executive summary - Q1 FY21 Balance Sheet and Franchise: BAJAJ B FINSERV Business operations were closed till 10 May 2020 and gradually restarted as local administrations eased lockdown conditions. As of yesterday, company is operational in 2,322 location which represents 85% of company's business. 86 locations are closed for business and collections which represents 15% of company's business. 2. AUM growth moderated to 7% YoY due to lockdown. It stood at 1,38,055 crore in Q1 FY21. 3. The Company restarted its sales finance, auto finance, LAS and Gold loan businesses from 10 May 2020 with stringent loan to value (LTV) norms and focus on existing customers. Semi urban and rural market volume recovery is much stronger than anticipated. 4. 5. Home loan and Credit card distribution businesses were restarted in June'20. Restart of loan against property, SME, B2C urban, B2C rural and commercial businesses was deferred to July'20 due to extension of moratorium. 6. At this juncture, based on our assessment, 75+ cities should revert to pre-COVID volumes by October, 40-75 Cities by end November, 10-40 cities by January and top 10 cities by March. All this is of course subject to Government of India not enforcing a 2nd national lockdown. Based on this assessment, the Company estimates AUM growth of 10-12% in FY21. 7. Post restart in May, bounce rate and collection efficiency of 1.7 MM new loans disbursed is in line / marginally better than Pre- COVID (Feb 20). If these metrics continue, the Company will be comfortable taking a stronger growth stance for 2nd half of the year. 8. Given the lockdown, the Company increased focus on its 42.95 MM customer franchise to increase penetration of fee products like health card, health insurance etc. The Company sold 5.33 lac health card to its existing EMI card customers in Q1 FY21. This product comes with higher limit, EM I financing tie ups at multi speciality hospitals and various other wellness benefits. Back 5#6Executive summary - Q1 FY21 BAJAJ B FINSERV 9. Given the lockdown, the Company decided to convert some of its existing customers with no overdue and good repayment track record from term loan to a flexi loan for a switch fee. The Company has been offering flexi loans to its customers for the last 5 years. As of March 31st, the existing book under flexi stood at 36,846 crore. The product provides the customers with flexibility to draw down when they need and prepay when they want digitally. It also has an added feature of only interest servicing for first 1 - 2 years. In Q1 FY21, the company has converted 8,600 crore of term loans into flexi loans. 10. The Company acquired 0.53 MM new customers in the current quarter. Total custom er franchise stood at 42.95 MM as of 30 June 2020, a growth of 16% YoY. 11. Existing customers contributed to 70% of new loans booked during Q1 FY21. Liquidity Management 12. As of 20 July 2020, the Company had consolidated liquidity buffer of 20,590 crore and SLR investments of Rs. 2,550 crore. This represents 19.2% of its total borrowing. Given the environment, the Company will continue to run high liquidity buffer, despite an impact on cost of funds in the short term. 13. The carry cost of excess liquidity in Q1 was ₹ 169 crore. 14. Deposits book stood at 20,061 crore, a growth of 33% YoY. Its contribution to consolidated balance sheet was 17% as of 30 June 2020. The Company continued to attract sizable retail deposits in Q1. The Company reduced rates for its retail deposit rates twice in Q1 aggregating to a drop of 65 bps. The Retail: Corporate mix stood at 70: 30 as against 63: 37 in Q4 FY20 in line with its strategy of reducing its reliance on corporate deposits. Back 6#7Executive summary - Q1 FY21 BAJAJ B FINSERV 15. During the quarter, S&P Global has downgraded the Company's long-term issuer credit rating from BBB-/ Negative to BB+/stable and short-term rating from A-3 to B. S&P global ascribes this downgrade, to weakening economic conditions due to COVID-19 which has also led to them revising the NBFC sector anchor rating from BB to BB-. Operating expense management 16. Opex to NII im proved to 27.9% in Q1 FY21 as against 35.0% in Q1 FY20. 17. Opex for Q1 FY21 was lower by 11% YoY and 20% QoQ to ₹1,157 crore. Sequentially, opex dropped by ₹296 crore. 18. The Company has taken several actions including fixed pay cut (5% at junior level to 17.5% at senior most level), no incentives for Q1, call center optimization, freeze on travel, advertising & promotion and deferred physical trainings etc. to reduce its cost base. 19. The Company has paused replacement and new hiring, branch expansion and deferred other discretionary costs till Sep'20. Credit Costs 20. Reserve Bank of India, in view of the extension of lockdown and continuing disruption on account of COVID-19, extended the moratorium by another 3 months till 31 August 2020. 21. Consolidated moratorium book reduced to 21,705 crore (15.7% of AUM) as of 30 June 2020 from 38,599 crore (27.1% of AUM) as of 30 April 2020 owing to reduction in bounce rate coupled with improved collection efficiencies. (Referpage 11) Back 7#8Executive summary - Q1 FY21 BAJAJ B FINSERV 22. During the quarter, the Company has taken an additional contingency provision for COVID-19 of 1,450 crore taking its contingency provision for COVID-19 to 2,350 crore as of 30 June 2020. The contingency provisioning for COVID-19 is now at 10.8% of moratorium book. This contingency provision together with existing ECL provision of 623 crore provides an overall provisioning coverage of 13.7% on the consolidated moratorium book. 23. Additionally, as a matter of prudence, the Company has reversed interest income to the tune of 220 crore from the interest capitalized during moratorium period. 24. The Company last provided an update on its credit cost scenario model on 6 April 2020. The company considered lockdown of up to 50-days for its various scenario planning. We estimated an 80-90% increase in credit costs (₹5,400-5,700 Crore for FY21) assuming lockdown till 15 May 2020. 25. However, the national lockdown continued for 68 consecutive days till 31 May 2020 and it was followed by multiple district / state level lockdowns imposed by respective local authorities. At this juncture, big cities like Bangalore and Pune are in midst of more stringent lockdown than the national lockdown. 26. The Company has now updated its credit cost scenario model for FY21 considering extended disruptions. It now estimates its credit costs to increase by 100-110% (₹6,000-6,300 crore for FY21) over the pre-COVID credit cost of previous year. The Company has strong pre-provision profitability to absorb increased losses caused by COVID-19. 27. The Company has significantly augmented its collections infrastructure to mitigate its credit costs. It has added 2,800 collections officers and approximately 16,000 collection agency staff to manage the increased bounce volumes caused by COVID-19. 28. At this juncture, based on our assessment, 75+ cities should revert to pre-COVID collection efficiencies by November, 40-75 Cities by end December and 10-40 cities by February. Top 10 cities collection efficiency forecast is tough to predict. All this is of course subject to Government of India not enforcing a 2nd national lockdown. Back 8#9Executive summary - Q1 FY21 Profitability B BAJAJ FINSERV 28. Consolidated PAT for the quarter contracted by 19% YoY to 962 crore after taking contingency provision of 1,450 crore and interest income reversal of 220 crore. Pre-provision profitability remained strong. 29. The Company has revised its margin profile in certain businesses to protect its overall profitability. On mortgage business, the company is facing significant pricing pressure and is repivoting its mix marginally for short to medium term. 30. Return on Assets for the quarter was 0.7% and Return on Equity was 2.9% (not annualised) Capital: 31. The Company continues to remain very well capitalised with CRAR of 26.4% as of 30 June 2020. Its Tier-1 capital was 22.6%. The Company remains one of the best capitalised large NBFCs in India. Business transformation - 'Never let a crisis go waste': 32. The Company is accelerating its 3rd transformation journey conceptualized in Q3 FY20. The company is utilizing this pandemic time to completely transform itself by deploying "Zero based budgeting" methodology to reimagine all its businesses and functions. All businesses and functions are getting into micro detail of every process, customer moment of truth and cost lines and completely reimagining them. As a result, we plan to come out of this crisis as a company with enhanced customer experience, stronger digital orientation and a leaner cost structure. As and when dem and comes back fully, we will be ready to leverage this transformation to grow our business rapidly. 33. At this juncture, company has access to 105 MM customers and prospects. It intends to create an ecosystem of sales finance products and complete range of financial services for these customers and prospects. Back 9#10Executive summary - Q1 FY21 B BAJAJ FINSERV 34. Over the last 5 years, the Company has made significant investments in broadening its presence in payments railroad through its EMI card, Credit Card and Wallet offerings. It will accelerate integration of its sales finance ecosystem on its payment railroad. 35. Over the last 3 years, the company has been testing its omnichannel strategy of 'online to offline' and 'offline to online' by integrating customers and retailer ecosystem. It is working on integration of its ‘020' model to deliver significantly higher velocity to its merchant ecosystem and reduced friction for its customers. This transformation will help retailers sell more products and also help the Company sell more financial services at point of sale as well as subsequently. 36. Existing customers would be able to access financial services across lending, insurance, investments and payments in maximum 3 clicks. Subsidiary 37. Bajaj Housing Finance Ltd (BHFL) continued to grow in a robust manner delivering profit after tax growth of 31% to 92 crore in Q1 FY21 against 70 crore in Q1 FY20. 38. BHFL'S AUM increased by 52% to 32,982 crore as of 30 June 2020 from 21,745 crore as of 30 June 2019. 39. BHFL's Net Interest Income for Q1 FY21 was up by 23% to 243 crore from 198 crore in Q1 FY20. 40. BHFL's Opex to NII improved to 30.4% in Q1 FY21 as against 41.4% in Q1 FY20. 41. During the quarter, BHFL made a contingency provision of COVID-19 to 94 crore as of 30 June 2020. 44 crore for COVID-19 taking the overall contingency provision for 42. Bajaj Financial Securities Ltd (BFinsec) made a net loss of 1.82 crore in Q1 FY21. Back 10#11Update on Moratorium As on 30 April 2020 As on 30 June 2020 BAJAJ B FINSERV in crore % of % of AUM COVID COVID + ECL AUM Business Segment AUM AUM under Provision under ECL Provision AUM Provision as AUM under under Morat Amt % of Morat Morat COVID Provision Amt ECL Provision COVID + ECL Provision as % of Morat Morat Morat Auto Finance 13,726 9,611 70.0% 209 309 5.4% 12,802 6,446 50.3% 553 209 11.8% Sales Finance 10,600 2.742 25.9% 63 57 4.4% 9,231 1,813 19.6% 245 42 15.8% Consumer B2C 30,505 8,771 28.8% 251 257 5.8% 29,219 4,454 15.2% 785 176 21.6% Rural Sales 2,326 688 29.6% 10 8 2.6% 2,089 214 10.2% 37 LO 19.6% Finance Rural B2C 10,650 3,020 28.3% 96 80 5.8% 10,281 1,015 9.9% 177 37 21.1% SM E Lending 19,048 5,708 30.0% 174 154 5.7% 18.277 2,245 12.3% 341 74 18.5% Securities 4,037 13 0.3% 3,957 Lending Commercial 6,215 1,527 24.6% 26 3 1.9% 6,075 1,168 19.2% 56 2 5.0% Mortgages 45,960 6,518 14.2% 71 102 2.7% 46.124 4,350 9.4% 156 77 5.4% BFL Consol 1,43,067 38,599 27.1% 900 970 4.8% 1,38,055 21,705 15.7% 2.350 623 13.7% Total Provision - 1,870 Total Provision - 2,973 Back 11#12Section 02. Bajaj Finance Limited overview BAJAJ B FINSERV 2.1 Bajaj group structure 2.2 What do we stand for 2.3 Our shareholder profile 2.4 10-year financial snapshot 2.5 Product suite 2.6 Executive summary Back 12#13Bajaj group structure I Bajaj Finserv Limited (Listed) Financial services arm @39.16% 1 Bajaj Finance Limited (Listed) Lending business arm Bajaj Housing Finance Limited I Mortgage Lending 52.82% 3 Bajaj Holdings & Investment Limited (BHIL) (Listed) *33.43% 2 Bajaj Auto Limited (Listed) Bajaj Allianz Life Insurance Company Ltd Protection and retiral Auto business arm 74% BAJAJ B FINSERV Bajaj Allianz General Insurance Company Ltd Protection 100% 100% Bajaj Financial Securities Limited 2. 1. 60.80% holding through promoter holding company and promoter group 53.69% holding through promoter holding company and promoter group Broking & Depositary 3. 56.20% holding through promoter holding company and promoter group Above shareholding is as of 30 June 2020 @BHIL has an additional stake of 2.34% through, Maharashtra Scooters Limited, and 0.13% through Bajaj Auto Holdings Limited, subsidiaries of BHIL *BHIL has an additional stake of 2.34% through its subsidiary, Maharashtra Scooters Limited 74% Back 13#14What do we stand for B BAJAJ FINSERV “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 sustainable ROA of 3.3-3.5% and ROE of 19-21% in the long term "Focused on continuous innovation to transform customer experience and create growth opportunities" Back 14#15Our general long-term guidance on financial metrics B AUM growth in corridor of 25% -27% Profit grow th in corridor of 23% -24% میرا GNPA in corridor of 1.4% -1.7% Kil NNPA in corridor of 0.4% -0.7% Return on assets in corridor of 3.3% -3.5% Return on equity in corridor of 19% -21% BAJAJ FINSERV Back 15#16Key strategic differentiators Part of the Bajaj group - one of the oldest & most respected business houses A trusted brand with strong brand equity BAJAJ B FINSERV Focus on mass affluent and above clients Total customer franchise of 42.95 MM Strong focus on cross selling assets, payments, insurance and deposit products to existing customers A well diversified balance sheet Highly agile & innovative Deep investment in technology and analytics Centre of Excellence for each business vertical to bring efficiencies across businesses and improve cross sell opportunity. Consolidated lending AUM mix for Consumer: Rural: SME: Commercial: Mortgages stood at 37% 9% 13% 7% 34% Consolidated borrowing mix for Money Markets :Banks: Deposits: ECB stood at 40% 39% 17% 4% Continuous improvements in product features and digital technologies to maintain competitive edge. Has helped achieve multi product cross sell and manage risk & controllership effectively. Obsessed to deliver frictionless experience to customer Back 16#17Our shareholder profile B BAJAJ FINSERV 1.08% MF 7.26% Others S.No 1 BAJAJ FIN SERV LTD GOVERNMENT OF SINGAPORE MAHARASHTRA SCOOTERS LTD. 2 Top 20 investors & their holdings Name of Shareholder As on 30 As on 31 As on 30 Jun 20 March 20 Jun 19 52.82% 52.82% 54.81% 4.30% 4.46% 3.74% 3 3.15% 3.15% 3.27% 4 AXIS LONG TERM EQUITY FUND 0.82% 0.76% 0.89% Resident & non resident individuals 9.92% 5 NEW HORIZON OPPORTUNITIES MASTER FUND 0.77% 0.77% 0.80% 6 STEADVIEW CAPITAL MAURITIUS LTD. 0.77% 0.79% 1.26% 7 LIFE INSURANCE CORPORATION OF INDIA 0.69% 0.15% 0.00% Corporates Shareholding profile 4.30% 8 NEW WORLD FUND INC. 0.56% 0.56% 0.58% 9 SBI ETF NIFTY 50 0.56% 0.65% 0.47% 10 SBI EQUITY HYBRID FUND 0.55% 0.45% 0.43% 11 AXIS BLUECHIP FUND 0.54% 0.41% 0.26% 12 SMALL CAP WORLD FUND INC 0.54% 0.54% 0.56% 13 VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 0.51% 0.52% 0.47% Promoters & 14 AXIS FOCUSED 25 FUND Promoter Group 0.44% 0.36% 0.31% 15 SBI LIFE INSURANCE CO. LTD 0.44% 0.48% 0.36% 56.20% FII & FPI 21.24% 16 ST. JAMES'S PLACE EMERGING MARKETS EQUITY UNIT TRUST MANAGED BY WASATCH ADVISORS INC 17 VANGUARD EMERGING MARKET STOCK INDEX FUND 18 SBI FOCUSED EQUITY FUND 19 DF INTERNATIONAL PARTNERS 20 UTI - EQUITY FUND Above shareholding is as of 30 June 2020 0.43% 0.23% 0.25% 0.41% 0.44% 0.47% 0.38% 0.26% 0.09% 0.38% 0.22% 0.30% 0.38% 0.32% 0.35% Back 17#1810-year financial snapshot BAJAJ B FINSERV in crore FY18° Financials snapshot FY11 FY12 FY13 FY14 FY15 FY16 FY17 (Consol.) FY19° (Consol.) FY20° Yo Y CAGR (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 operations 1,406 2,172 3.110 4,073 5,418 7,333 9,989 12,757 18,500 26,386 43% 39% Interest expenses 371 746 1,206 1,573 2,248 2,927 3,803 4,614 6,623 9,473 43% 43% Net Interest Income (NII) 1,035 1,426 1,904 2,500 3,170 4,406 6,186 8,143 11,877 16,913 42% 36% Operating Expenses 460 670 850 1,151 1,428 1,898 2,564 3,270 4,197 5,662 35% 32% Loan Losses & Provision (ECL) 205 154 182 258 385 543 804 1,030 1,501 3,929 162% 39% Profit before tax 370 602 872 1,091 1,357 1.965 2,818 3,843 6,179 7,322 18% 39% Profit after tax 247 406 591 719 898 1,279 1,837 2,496 3,995 5,264 32% 40% Ratios FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Opex to NII 44.4% 47.0% 44.6% 46.0% 45.0% 43.1% 41.4% 40.2% 35.3% 33.5% Return on assets Return on equity Net NPA * NPA provisioning coverage 4.4% 4.2% 19.7% 24.0% 21.9% 0.80% 0.12% 0.19% 79% 83% 4.1% 3.6% 3.3% 3.5% 3.7% 3.7% 4.2% 4.1% 19.5% 0.28% 20.4% 20.9% 21.6% 20.1% 22.5% 20.2% 0.45% 0.28% 0.44% 0.43% 0.63% 0.65% 89% 76% 71% 77% 74% 70% 60% 60% All figures till including FY17 are as per previous GAAP, whereas for FY18 onwards are as per IndAS * As per the RBI regulations, NNPA numbers for upto FY15 are at 6 months overdue, FY16 are at 5 months overdue, FY17 are at 4 months overdue and FY18 onwards are at 3 months overdue. Hence NPA across periods are not comparable. Back18#19Product suite Consumer 1. Consumer Durable Loans 2. Digital Product Loans (E) 3. Lifestyle Product Loans 4. Lifecare financing 5. EMI Cards 6. Retail Spend Financing 7. 2-Wheeler & 3-Wheeler Loans 8. Personal Loan Cross-Sell 9. Salaried Personal Loans (E) 10. E-Commerce - Consumer Finance 11. Retailer Finance 12. Health EMI Card SME 1. Unsecured Working Capital Loans (E) 2. Loans to self employed and Professionals (E) 3. Secured Enterprise Loans 4. Used-car financing BAJAJ FINANCE LIMITED Commercial 1. Loan against securities 2. IPO financing 3. ESOP financing 4. Vendorfinancing to auto component manufacturers 5. Financial Institutions Lending 6. Light Engineering Lending 7. Specialty Chemicals Lending Rural 1. Consumer Durable Loans 2. Digital Product Loans 3. Lifestyle Product Loans 4. Personal Loans Cross Sell 5. Salaried Personal Loans 6. Gold Loans 7. Loans to Professionals Deposits 1. Retail Term Deposits 2. Corporate Term Deposits 3. Systematic Deposit Plan Partnerships & Services 1. Life Insurance Distribution 2. General Insurance Distribution 3. Health Insurance Distribution 4. Pocket Insurance (E) 5. Co-Branded Credit Card 6. Co-Branded Wallet 7. Financial Fitness Report BAJAJ HOUSING FINANCE LIMITED 1. Loan Against Property 1. Developer Finance 1. Salaried Home Loans (E) 2. Salaried Loan Against Property 2. Self Employed Home Loans 3. Lease Rental Discounting 1. Loan Against Property 2. Home Loans 3. Secured Enterprise Loans 1. Property search services 2. Property Fitness Report 1. Depository services 2. Margin Trading Facility 3. Spread Financing 4. Brokerage account BAJAJ FINANCIAL SECURITIES LIMITED New Product (E) Also available through digital channels Back 19#20Executive summary - Consolidated Overview Subsidiaries Treasury Credit Quality 33-year-old non bank with a demonstrated track record of profitable growth BAJAJ B FINSERV • Diversified financial services company focused on Consumer, Rural, SM E, Commercial, Mortgages and Payments Focused on mass affluent client with a strategy to cross sell • Strong focus on deposits acceptance and fee product distribution Present in 1,049 urban locations and 1,359 rural locations in India with over 1,14,400 + points of sale Large customer franchise of 42.95 MM with loans Amongst the largest new loan acquirers in India (1.75 MM in Q1 FY21) AUM mix of Consumer: Rural: SME: Commercial: Mortgages stood at 37% 9% 13% 7% 34% as of 30 June 2020 AUM of ₹1,38,055 crore as of 30 June 2020 and a post tax profit of 962 crore in Q1 FY21. Capital adequacy ratio (including Tier II capital) stood at 26.4% as of 30 June 2020. Tier I capital stood at 22.6% 100% shareholding in Bajaj Housing Finance Limited • 100% shareholding in Bajaj Financial Securities Limited. • Strategy is to create a balanced mix of wholesale and retail borrowings Borrowings of 121,120 crore with a mix of 40: 39: 17: 4 between money markets, banks, deposits & ECB as of 30 June 2020 • Consolidated Gross and Net NPA as of 30 June 2020 stood at 1.40% and 0.50%, respectively • Provisioning coverage ratio of 65% as of 30 June 2020 • Standard assets provisioning of 273 bps (ECL stage 1 & 2) under Ind AS as against requirement of ~40 bps as per RBI and NHB. This includes contingency provision of ₹2,350 crores for COVID-19. Excluding the same, standard assets provisioning stood at 101 bps. Back 20#21- Executive summary – Bajaj Finance Limited Overview • · B BAJAJ FINSERV Focused on Consumer, Rural, SM E, 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 cross sell, customer experience and product & process innovations to create a differentiated & profitable business model AUM mix of Consumer: Rural: SME: Commercial: Mortgage (residual) stood at 47% 12% 17% 9% 15% as of 30 June 2020 Consumer business Payments • AUM of ₹1,06,584 crore as of 30 June 2020 and a post tax profit of 870 crore in Q1 FY21 . Present in 1,049 locations with 89,900+ active distribution points of sale as of 30 June 2020 Largest consumer electronics, digital products & lifestyle products lender in India, 2-wheeler financing business disbursed 67K accounts in the quarter (degrowth of 78% YOY) • 3-wheeler financing business disbursed 5K accounts in the quarter (degrowth of 87% YOY) Amongst the largest personal loan lenders in India • EMI Card franchise stood at 21.5 MM cards in force (CIF) . • Bajaj Finserv - RBL Bank co-branded credit card CIF stood at 1.80 MM as of 30 June 2020 Bajaj Finserv Mobikwik app has 15.7 MM users as of 30 June 2020 who have linked their EMI card to the wallet Rural business Highly diversified lender in rural markets offering 10 loan products across consumer, SME & mortgages business categories. Operates with a unique hub and spoke business model • Geographic presence across 1,359 towns and villages with retail presence across 19,600 + points of sale Back 21#22- Executive summary – Bajaj Finance Limited SME Business . Offers unsecured working capital loans to SM E and self-employed professionals . • Secured offerings include enterprise loans against property and financing against used car Commercial business Treasury B BAJAJ FINSERV • Focused on affluent SM Es (average sales of 15 to 17 crore) with established financials & demonstrated borrowing track record . Offers short, medium and long term financing to mid market corporates Offers a range of structured products collateralized by marketable securities or mortgage • Offers financing against shares, mutual funds, insurance policies and deposits Strategy is to create a balanced mix of wholesale and retail borrowings with a focus on long term borrowings Borrowings stood at 95,717 crore with a mix of 43: 31: 21: 5 between money markets, banks, deposits & ECB as of 30 June 2020 Credit Quality . Gross and Net NPA as of 30 June 2020 stood at 1.75% and 0.61%, respectively Credit Rating . . Provisioning coverage ratio of 65% as of 30 June 2020 Standard assets provisioning of 332 bps (ECL stage 1 & 2). This includes contingency provision of 2,256 crores for COVID-19. Excluding the same, standard assets provisioning stood at 122 bps. • Credit rating for long term borrowing is AAA/ Stable by CRISIL, ICRA, CARE & India Ratings . • Credit rating for short term borrowing is A1+ by CRISIL, ICRA & India Ratings • Credit rating for FD program is FAAA/Stable by CRISIL & MAAA (Stable) by ICRA Long term issuer credit rating of BB+/ Stable and short term rating of B by S&P Global 22#23Executive summary - Bajaj Housing Finance Limited Bajaj Housing Finance Limited BAJAJ B FINSERV • A 100% subsidiary of Bajaj Finance Limited, registered with National Housing Bank as a Housing Finance Company Offers full range of mortgage products such as home loans, loan against property and lease rental discounting to salaried & self employed customers. It also offers construction finance and inventory finance to credit worthy developers • Focused on mass affluent and above customers (salaried and self employed) • AUM of 32,982 crore as of 30 June 2020 and a post tax profit of 92 crore for Q1 FY21 • Capital adequacy ratio (including Tier II capital) stood at 25.94% as of 30 June 2020 Home Loans Loan Against Property . • Offers home loans to salaried customers for an average ticket size of approximately 42 lakhs Focused on developing sales finance business by leveraging existing developer finance relationships and through tie-ups with new project launches Currently present across 32 locations in India Offers loan to mass affluent and above self employed customers for an average ticket size of approximately 48 lakhs Strategy is to sell LAP product to existing customers only via direct to customer channel • Currently present across 15 locations in India Rural • • Offers home loans and loans against property to salaried and self-employed customers with an average ticket size of approximately 18 lakhs for home loans and 12 lakhs for loan against property Hub and spoke strategy through branch network and ASSC tie ups Currently present across 73 locations in India Back 23#24- Executive summary – Bajaj Housing Finance Limited Lease Rental Discounting • BAJAJ B FINSERV Offers loan against lease rentals to high net worth individuals and developers on commercial property leased mainly to corporate tenants • All lease rental discounting transactions are backed by rentals through escrow mechanism Developer Financing · Ticket size of lease rental discounting ranges from 5 - 200 crore with an average ticket size of approximately 25 crore • Currently present across 8 locations in India (Mumbai, Delhi, Bangalore, Pune, Ahmedabad, Chennai, Kolkata and Hyderabad) • Offers construction finance and inventory finance mainly to category A and A+ developers in India • • Average ticket size ranges between 15 - 35 crore Currently present in 8 locations (Mumbai, Bangalore, Pune, Ahmedabad, Chennai, Kolkata, Hyderabad and Surat) Credit Quality Treasury ● • · Gross NPA and Net NPA, recognized as per extant NHB prudential norms and provisioned as per Expected Credit Loss (ECL) method prescribed in Ind AS, as of 30 June 2020 stood at 0.08% and 0.05% respectively Strategy is to create a balanced and sustained mix of borrowings Borrowings stood at 25,403 crore with a mix of 69 : 31 between banks and money markets as of 30 June 2020 Credit Rating • Credit rating for long term borrowing is AAA/Stable by CRISIL & IND AAA/Stable by India Ratings Credit rating for short term borrowing is A1+ by CRISIL & IND A1+ by India Ratings Back 24#25B BAJAJ FINSERV il Section 03 Financial performance - Q1 FY21 3.1 3.2 Financial statement summary - Consolidated Financial statement summary - Bajaj Finance Limited 3.3 Financial statement summary - Bajaj Housing Finance Limited Back 25#26Financial statement summary - Consolidated Financials snapshot B BAJAJ FINSERV in crore Assets under management Q1 FY21 1,38,055 Q1 FY20 Yo Y FY20 FY19 Yo Y 1,28,898 7% 1.47,153 1,15,888 27% Assets under finance 1,32,368 1,25,113 6% 1,41,376 1,12,513 26% Interest income 5,793 5,101 14% 22,970 16,349 40% Fee and other income 593 624 -5% 2,879 1,853 55% Net gain on fair value changes on investment 264 83 218% 537 298 80% Total Income 6,650 5,808 14% 26,386 18,500 43% Interest expenses 2,498 2,113 18% 9,473 6,623 43% Net Interest Income 4,152 3,695 12% 16,913 11,877 42% Operating Expenses 1,156 1,292 -11% 5,662 4,197 35% Loan losses and provisions (ECL stage 1 & 2). 1,430 130 1000% 1,318 260 407% Loan losses and provisions (ECL stage 3 & write off) 256 421 -39% 2,611 1,241 110% Profit before tax 1,310 1,851 -29% 7,322 6,179 18% Profit after tax 962 1,195 -19% 5,264 3,995 32% Ratios Operating expenses to Net Interest Income 27.9% 35.0% 33.5% 35.3% Loan loss to average AUF* 1.23% 0.46% 3.10% 1.57% Earning per share - Basic (*) Return on Average Assets* Return on Average Equity * * 16.0 20.7 89.8 69.3 0.7% 1.0% 4.1% 4.2% 2.9% 5.9% 20.2% 22.5% Not annualized Back 26#27Financial statement summary - Bajaj Finance Limited B BAJAJ FINSERV in Crore Financials snapshot Q1 FY21 Q1 FY20 Yo Y FY20 FY19 Yo Y Assets under management 1,06,584 1,07,949 -1% 1,16,102 98,671 18% Assets under finance 1,03.950 1,04,664 -1% 1,13,417 95,181 19% Interest income 5,101 4,642 10% 20,668 15,089 37% Fee and other income 564 591 -5% 2,706 2,053 32% Net gain on fair value changes on investment 237 71 234% 460 257 79% Total Income 5,902 5,304 11% 23,834 17,399 37% Interest expenses 1,985 1,797 10% 7,857 5,939 32% Net Interest Income 3,917 3,507 12% 15,977 11,460 39% Operating Expenses 1,092 1,221 -11% 5,364 3.949 36% Loan losses and provisions (ECL stage 1 & 2) 1,386 122 1035% 1.233 239 416% Loan losses and provisions (ECL stage 3 & write off) 255 420 -39% 2,572 1,237 108% Profit before tax 1,184 1,744 -32% 6,808 6,035 13% Profit after tax 870 1,125 -23% 4,881 3,890 25% Ratios Operating expense to Net Interest Income 27.9% 34.8% 33.6% 34.5% Loan loss to Average AUF* 1.51% 0.54% 3.65% 1.73% Return on Average Assets* 0.8% 1.1% 4.7% 4.6% Return on Average Equity* 2.7% 5.6% 19.0% 22.0% Back 27 * Not annualized#28Financial statement summary – Bajaj Housing Finance Limited B BAJAJ FINSERV in Crore Financials snapshot Q1 FY21 Q1 FY20 Yo Y FY20 FY19 Yo Y Assets under management 32,982 21,745 52% 32,705 17,562 86% Assets under finance 28,423 20,449 39% 27,975 17,332 61% Interest income 691 457 51% 2,303 998 131% Fee and other income 38 47 -19% 269 118 128% Net gain on fair value changes on Investments 27 11 145% 74 40 85% Total Income 756 515 47% 2,646 1,156 129% Interest expenses 513 317 62% 1,616 685 136% Net Interest Income 243 198 23% 1,030 471 119% Operating Expenses 74 82 -10% 339 297 14% Loan losses and provisions (ECL stage 1 & 2) 44 8 450% 86 22 291% Loan losses and provisions (ECL stage 3 & write off) 1 1 0% 38 3 1167% Profit before tax 124 107 16% 567 149 281% Profit after tax 92 70 31% 421 110 283% Ratios Operating expense to Net Interest Income 30.5% 41.4% 32.9% 63.1% Loan loss to Average AUF* 0.16% 0.05% 0.55% 0.24% Return on Average Assets* 0.3% 0.4% 1.9% 1.1% Return on Average Equity* 1.6% 1.9% 9.1% 4.2% *Not annualized Back 28#295 4 Section 04 Asset liability management BAJAJ B FINSERV Conservative leverage standards - 4.1 Bajaj Finance Limited Resilient business model - 4.2 4.3 4.4 4.4 Consolidated Behaviouralized ALM as of 30 June - Bajaj Finance Limited Behaviouralized ALM as of 30 June Bajaj Housing Finance Limited Disciplined ALM Management - Bajaj Finance Limited Liability mix over the last 9 years 4.5 Bajaj Finance Limited Back 29#30Conservative leverage standards - Bajaj Finance Limited BAJAJ B FINSERV 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 6.8! 6.6 24.7% 25.0% 26.4% [6.4 6.2 6.3 16.3 22.6% 22.0% 21.3% 20.7% 20.3% 5.4 5.3 19.5% 19.1% 5.1 18.0% 4.7 * 17.5% 19.7% 18.7% 16.2% 16.1% 16.3% 15.0% 14.6% 14.2% 5.7% 5.0% 4.4% 3.8% 3.7% 3.8% 3.3% 3.4% 3.0% 2.5% Mar'12 Mar'13 Mar'14 Mar'15 -Tier 2 capital # Tier 1 capital * Standalone leverage is approximately 4.0X as of 30 June 2020 # Capital Adequacy Ratios (CRAR) are on standalone basis March '19 onwards numbers are as per Ind AS Mar'16 Mar'17 ―Total capital adequacy (CRAR) # Mar'18 Mar '19 Mar 20 June'20 -Leverage Ratio Leverage Threshold denotes point at which the Company initiated its capital raising plan in last 9 years Back 30#31Resilient business model - Consolidated B BAJAJ FINSERV 47.0% 46.0% 44.6% 45.0% 43.69% 43.1% 41.4% 41.8% 38.4% 36.0% 35.3% 35.39% 32.9% 33.3% 29.9% 33.50% 28.4% 27.2% 27.90% 26.4% 9.16% 9.74% 9.85% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 8.17% 4.2% 4.1% 3.6% 3.3% 3.5% 3.7% 3.9% 4.1% 4.10% 2.80% @ @ Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 # Mar'18 Mar '19 Mar 20 Jun '20 -COF ROA -Fee Income to PBT -Operating Leverage © Mar '19 onwards numbers are as per Ind AS. Jun 20 number is for the quarter # Post Ind AS, Fee income to PBT represents non-loan fees and commission income as a % of Profit Before Tax Back 31#32Behaviouralized ALM as of 30 June 2020 - BFL BAJAJ B FINSERV Cr Particulars 1m >1 to 2m >2 to 3m >3 to 6 m >6m to 1 yr >1 to 3 yr >3 to 5 yr >5 yr Total Cash, Cash Equivalents & Investments 14,843 501 1 4 312 1,741 438 5,571 23,411 Advances 6.068 4,925 4,738 11,498 17,334 39,140 18,286 6,594 1,08,581 Other inflows 3,833 44 325 950 212 2,129 4,493 11,987 Total Inflows (A) 24,743 5,470 5,064 12,452 17,858 43,010 18,724 16,659 1,43,979 Cumulative Total Inflows (B) 24,743 30,213 35,277 47,729 65,587 1,08,596 1,27,320 1,43,979 Borrowings 2,109 6,311 2,949 7,284 13,380 43,523 12,570 11,397 99,522 Capital and Reserves and Surplus 33,593 33,593 Other Outflows 4.074 133 202 1,361 673 1,082 529 2,809 10,864 Total Outflows (C) 6,183 6,444 3,151 8,645 14,054 44,605 13,099 47,798 1,43,979 Cumulative Total Outflows (D) 6,183 12,627 15,778 24,423 38,477 83,082 96,181 1,43,979 Mismatch (E = A-C) 18,561 (974) 1,912 3,807 3,804 (1,595) 5,625 (31,139) Cumulative mismatch (F= B-D) ■ 18,561 17,587 19.499 23,306 27,110 25,514 31,139 Cumulative mismatch as a % (F/D) 300% 139% 124% 95% 70% 31% 32% 0% Permissible cumulative GAP % -20% Additional borrowings possible ■ 24,746 As per previous GAAP -15% 13,938 Back 32#33Behaviouralized ALM as of 30 June 2020 - BHFL BAJAJ B FINSERV Cr Particulars 1 m >1 to 2 m >2 to 3 m >3 to 6 m >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 2,306 150 150 2,606 Advances 618 453 456 1,322 2,428 7.100 4,181 2,972 3,303 5,881 28,714 Other inflow s 594 18 23 30 2,761 768 764 502 55 96 5,612 Total Inflows (A) 3,518 620 630 1,352 5,189 7,868 4,945 3,474 3,358 5,977 36,931 Cumulative Total Inflows (B) 3,518 4,138 4,768 6,121 11,310 19,178 24,123 27,597 30,954 36,931 Borrowings 436 65 189 1,150 4,859 11,188 5,215 1,279 77 252 24,712 Capital Reserves and Surplus 5,638 5,638 Other Outflows 550 134 142 364 1,030 112 2,500 1,748 6,581 Total Outflows (C) 986 199 332 1,515 5,890 11,301 5,215 1,279 2.577 7,638 36,931 Cumulative Total Outflows (D) 986 1,186 1,517 3,032 8,922 20,223 25.438 26,717 29,293 36,931 Mismatch (EAC) 2,532 421 298 (162) (701) (3,432) (271) 2,195 781 (1,661) Cumulative mismatch (F = B-D) 2,532 2,953 3,251 3,089 2,388 (1,045) (1,315) 880 1.661 0 Cumulative mismatch as % (F/D) 257% 249% 214% 102% 27% -5% -5% 3% 6% 0% Permissible cumulative GAP % ¡ -15% Additional borrowings possible I 3,153 ■ -15% I 1,231 * As per previous GAAP Back 33#34Disciplined ALM Management - Bajaj Finance Limited -Cumulative gap upto 1 month Cumulative gap upto 12 month -Permissible limit 141% 119% 120% 96% 220% BAJAJ B FINSERV 300% 61% 48% 50% 71% 36% 36% 70% 51% 54% 57% 16% 38% 44% 4% -15% -15% -15% -15% -15% -15% -15% -15% -15% -15% * Mar'12 Mar '13 Mar '14 Mar'15 Mar '16 Mar '17 Mar '18 Mar'19 Mar/20 Jun'20 * RBI has changed permissible limit for cumulative gap up to 1-month bucket to -20% from June'20 onwards. Back 34#35Liability mix over the last 9 years - Bajaj Finance Limited 5% 5% 9% 8% 10% 8% 8% 13% 4% 3% 3% 4% 6% 5% 3% 7% BAJAJ B FINSERV 4% 5% 34 3% 4% 4% 4% 33% 31% 38% 35% 25% 38% 35% 38% 40% 43% 30% 31% 58% 58% 54% 34% 48% 53% 31% 35% 21% 21% 15% 12% 8% 0% 0% 1% Mar'12 Mar'13 Mar'14 4% Mar'15 6% Mar'16 Mar'17 Mar'18 Mar'19 ■Deposits ■Bank Loans (incl. CC/OD/W CDL) NCD Subordinate Debt ■Short term borrowings Mar 20 ECB Jun '20 * Standalone borrowing mix Back 35#365.1 Custom er franchise Section 05 Customer franchise and distribution reach Geographic presence 5.3 Strong distribution reach BAJAJ B FINSERV Back 36#37Customer franchise Q1 FY20 36.94 MM 29.09 MM Total Franchise Credit segment filter Q4 FY20 * BAJAJ B FINSERV 42.60 MM 33.47 MM 28.00 M M Overall Cross sell franchise 32.32 MM 25.18 MM Non delinquent customers 28.48 MM 21.85 MM Cross sell franchise 24.13 MM * The customer franchise waterfall has been kept static due to moratorium and will be updated in Q3 FY21 New to Bajaj Finance Customers Q4 FY19 19,17,490 Q1 FY20 24,55,827 Q2 FY20 19,21,238 Q3 FY20 24,61,473 Q4 FY20 19,00,989 Q1 FY21 5,32,441 Back 37#38Geographic presence Map not to scale Blue dots indicates newly opened locations in Q1 FY21 B BAJAJ FINSERV 31 Mar 31 Mar 31 Mar 31 Mar 30 Jun Geographic Presence 2017 2018 2019 2020 2020 Urban 377 730 927 1,035 1,049 Rural 538 602 903 1.357 1,359 Of which rural lending branches 177 219 347 527 527 Of which rural lending franchise 361 383 556 830 832 Total Bajaj Finance presence 915 1,332 1.830 2,392 2,408 Back 38#39Strong distribution reach B BAJAJ FINSERV Active distribution - points of sale 31 Mar 2017 31 Mar 2018 31 Mar 2019 31 Mar 2020 30 Jun 2020 Consumer durable stores – Urban 14,000+ 15,500+ 20,400+ 24,200+ 24,200+ Consumer durable stores - Rural 5,500+ 8,200+ 14,500+ 19,600+ 19,600+ Digital product stores 5,900+ 15,900+ 22,500+ 26,400+ 26,400+ Lifestyle retail stores 3,900+ 6,000+ 7,700+ 9,500+ 9,500+ EMI card retail spends stores 5,600+ 12,100+ 19,100+ 24,300+ 24,300+ Bajaj Auto dealers, sub-dealerships and ASSC 3,200+ 3,900+ 4,600+ 5,500+ 5.500+ Direct Sales Agents 1,500+ 2,100+ 2,800+ 4,900+ 4,900+ Overall active distribution network 39,600+ 64,300+ 91,700+ 1,14,400+ 1,14,400+ Back 39#40Section 06 Business segment wise AUM 6.1 6.2 B BAJAJ FINSERV Business segment wise AUM as of 30 June - Consolidated Business segment wise AUM as of 30 June - Bajaj Housing Finance Ltd. Back 40#41Business segment wise AUM as of 30 June 2020 - Consolidated BAJAJ B FINSERV crore Composition as Standalone as of Assets Under Management 30 Jun 2020 BHFL as of 30 Jun 2020 Consolidated as of 30 Jun 2020 Consolidated as of 30 Jun 2019 Grow th of 30 Jun 2020 Auto Finance Business 12,802 12,802 10,908 17% 9% Sales Finance Business 9,231 9,231 14,086 -34% 7% Consumer B2C Business 28,497 722 29,219 24,889 17% 21% Rural Sales Finance Business 2,089 2,089 2,383 -12% 2% Rural B2C Business 10,281 10,281 7,961 29% 7% SM E Lending Business 18,096 184 18,277 16,334 12% 13% Securities Lending Business 3,956 3,957 6,527 -56% 3% IPO financing 2,558 Commercial Lending Business 6,075 6,075 5,878 3% 4% Mortgages 15,557 32,076 46,124 37,375 23% 34% Total 1,06,584 32,982 1.38.055 *1.28.898 7% 100% Credit Card - CIF 1,798 K 1,285 K 40% EMI Card - CIF 21.5 MM 19.8 M M 9% Wallets 15.7 MM 10.0 MM 57% Back 41 * Includes short term IPO financing book of 2,558 crore - adjusted for this total AUM growth is 9%#42Break-up of Mortgages AUM as of 30 June 2020 Bajaj Housing Finance Limited Consolidated B BAJAJ FINSERV crore Assets Under Management Composition as 30 June 2020 30 June 2019 Growth 30 June 2020 30 June 2019 Growth of 30 June 2020 Home Loans 21,553 14,151 52% 26,637 20,358 31% 58% Loan against property 3,989 2,518 58% 11,538 11,192 3% 25% Lease rental development 3,105 2,272 37% 4,007 2,823 42% 9% Developer Finance 1,785 1,029 73% 1,874 1,396 34% 4% Rural 1,644 1.083 52% 2,065 1,606 29% 4% Total 32.076 21,054 52% 46,122 37,375 23% 100% Home loan portfolio customer categorisation Home Loan to Salaried Home Loan to Self Employed Home Loan to Professional Bajaj Housing Finance Limited Consolidated Composition as of 30 June 2020 30 June 2019 Grow th 30 June 2020 30 June 2019 Growth 30 June 2020 19,837 12,592 58% 22,704 15,983 42% 83% 1,277 1,159 10% 3.183 3,626 -12% 12% 1,155 809 43% 1.521 1,219 25% 5% Salaried focused home loans acquisition strategy (93% of Q1 FY21 acquisition) Back 42#43☐ Section 07 Update on credit quality 2.1 Provisioning Coverage - consolidated 2.2 NPA movement - consolidated 2.3 ECL summary - consolidated 2.4 ECL summary - Bajaj Housing Finance Limited BAJAJ B FINSERV Back 43#44Provisioning Coverage - Consolidated B BAJAJ FINSERV Values in Cr Assets Under Management Consol AUM 30 Jun 2020 PCR GNPA % NNPA % GNPA NNPA (%) 30 Jun 19 31 Mar 20 30 Jun 20 30 Jun 19 31 Mar 20 30 Jun 20 Auto Finance Business 12,802 822 301 63% 5.19% 6.47% 5.80% 2.14% 3.08% 2.21% Sales Finance Business 9,231 109 35 68% 1.16% 1.33% 1.03% 0.27% 0.35% 0.33% Consumer B2C Business 29,219 381 90 76% 1.63% 1.62% 1.36% 0.45% 0.49% 0.32% Rural Sales Finance Business 2,089 OO 8 2 טו 77% 0.97% 0.55% 0.16% 0.31% 0.10% 0.04% Rural B2C Business 10.281 138 44 68% 1.63% 1.53% 1.30% 0.61% 0.51% 0.42% SME Lending Business 18,277 279 84 70% 1.64% 1.70% 0.89% 0.35% 0.56% 0.27% Securities Lending Business 3,957 0% 0.00% 0.00% Commercial Lending Business 6,075 2 2 10% 0.61% 0.03% 0.04% 0.26% 0.03% 0.03% Mortgages 46,124 199 124 38% 1.19% 0.53% 0.69% 0.86% 0.34% 0.43% Total 1,38,055 1,938 681 65% 1.60% 1.61% 1.40% 0.64% 0.65% 0.50% GNPA reduced by 21 bps on a sequential basis and 20 bps Yo Y; NNPA reduced by 15 bps on a sequential basis and 14 bps Yo Y Back 44#45NPA movement - Consolidated B BAJAJ FINSERV Values in Cr Particulars Assets Under Management Opening GNPA (A) Roll Forward into NPA (i) Restructuring (ii) Jun '19 Sep '19 Dec'19 Mar'20 Jun'20 1,28,898 1,35,533 1,45,092 1,47,153 1,38,055 1,804 2,094 2,213 2,354 2,363 697 779 924 994 138 LO 5 7 12 43 2 Total Slippages (B = i + ii) 702 786 936 1,037 140 Roll back to standard (iii) 161 200 192 321 123 Recoveries (iv) 54 65 58 18 43 Realisation on sale of NPA receivables* (v) 24 18 7 Write offs as per policy (vi) 196 185 380 668 399 Write offs on sale of NPA receivables (vii). 193 147 13 I Total recoveries and write-offs (C = iii + iv + v + vi + vii) 412 667 795 1,028 565 Net slippages (B - C) 290 119 141 9 (425) Gross NPA (A + B - C) 2,094 2,213 2,354 2,363 1,938 GNPA % NNPA % PCR % 1.60% 1.61% 1.61% 1.61% 1.40% 0.64% 0.65% 0.70% 0.65% 0.50% 61% 60% 57% 60% 65% * Portfolio sale is on cash basis Back 45#46ECL summary - Consolidated B BAJAJ FINSERV Assets categorization Jun '19 Sep '19 Dec '19 Mar'20 Jun'20 Stage 1 & 2 (represents standard assets) 98.40% 98.39% 98.39% 98.39% 98.60% Stage 3 (represents GNPA) 1.60% 1.61% 1.61% 1.61% 1.40% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Jun '19 Sep'19 Gross Stage 1 & 2 assets* (A) 1,28,570 1,35,552 Dec '19 1,43,534 Mar'20 Jun '20 1.44,199 1,36,461 ECL Provision Stage 1 & 2 (B) 1,111 1.239 1,443 2,299 3,729 Net Stage 1 & 2 assets (C = A-B) 1,27,459 1,34,312 1,42,091 1,41,900 1,32,732 ECL Provision % Stage 1 & 2 assets (D = B/A) 0.86% 0.91% 1.01% 1.59% 2.73% Gross Stage 3 assets (E) @ 2,094 2,213 2,354 2,363 1,938 ECL Provision Stage 3 (F) 1,270 1,325 1,335 1,425 1,257 Net Stage 3 assets (G = E-F) 824 888 1,019 938 681 Coverage Ratio % Stage 3 assets (H= F/ E) 61% 60% 57% 60% 65% Overall coverage ratio 1.82% 1.86% 1.90% 2.54% 3.60% * Gross stage 1 & 2 assets represent loans balance as per Ind AS after adjusting for the impact of am ortisation of fees earned and acquisition cost incurred including other assets like security deposits, advance to dealer, receivable from related parties, capital advances etc @ Gross Stage 3 assets represents loans balance as per Ind AS after adjusting for the impact of (i) am ortisation of fees earned and acquisition cost incurred and (ii) overdue interest considered recoverable under Ind AS and other receivables considered as non-performing as at the end of respective periods. Back 46#47ECL summary - Bajaj Housing Finance Limited BAJAJ B FINSERV ECL categorization Jun'19 Sep'19 Dec'19 Mar'20 Jun'20 Stage 1 & 2 (represents standard assets) 99.94% 99.94% 99.93% 99.92% 99.92% Stage 3 (represents GNPA) 0.06% 0.06% 0.07% 0.08% 0.08% Summary of stage wise assets and ECL provisioning in Crore Financial Assets & ECL provision Jun'19 Sep'19 Dec'19 Mar'20 Jun'20 Gross Stage 1 & 2 assets* (A) 20,601 23.481 26,532 28,199 28,739 ECL Provision Stage 1 & 2 (B) 34 37 43 112 156 Net Stage 1 & 2 assets (C = A-B) 20,567 23,443 26,488 28,088 28,582 ECL Provision % Stage 1 & 2 assets (D = B/A) 0.16% 0.16% 0.16% 0.40% 0.54% Gross Stage 3 assets (E) 13.1 13.3 19.9 23.7 24.1 ECL Provision Stage 3 (F) 4.2 6.0 6.3 9.0 9.3 Net Stage 3 assets (G = E-F) 8.9 7.3 13.6 14.7 14.8 Coverage Ratio % Stage 3 assets (H= F/ E) 32% 45% 32% 38% 38% ECL/ Total Assets 0.18% 0.18% 0.19% 0.43% 0.58% * Gross stage 1 & 2 assets represent loans balance as per Ind AS after adjusting for the impact of am ortisation of fees earned and acquisition cost incurred including other assets like security deposits, receivable from related parties, capital advances etc @ Gross Stage 3 assets represents Loans balance as per Ind AS after adjusting for the impact of (i) amortisation of fees earned and acquisition cost incurred and (ii) overdue interest considered recoverable under Ind AS and other receivables considered as non-performing as at the end of respective periods. Back 47#48BAJAJ FINANCE LIMITED Q1 FY21 Investor Presentation Thank You B BAJAJ FINSERV Back#49Disclaimer B BAJAJ FINSERV 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 does not constitute or does not intend to constitute or form part of any offer or invitation or inducement to sell, or any solicitation of any offer or recommendation to purchase, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment therefor. In particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. There is no obligation to update, modify or amend this communication or to otherwise notify the recipient if information, opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. However, the Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. These materials are being given solely for your information and may not be copied, reproduced or redistributed to any other person in any manner. The distribution of these materials in certain jurisdictions may be restricted by law and persons into whose possession these materials comes should inform them selves about and observe any such restrictions. Certain statements contained in this presentation that are not statements of historical fact constitute "forward-looking statements." You can generally identify forward-looking statements by terminology such as "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "intend", "may", "objective", "goal", "plan", "potential", "project", "pursue", "shall", "should", "will", "would", or other words or phrases of similar import. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. Important factors that could cause actual results, performance or achievements to differ materially include, among others: (a) material changes in the regulations governing the Company's businesses; (b) the Company's ability to comply with the capital adequacy norms prescribed by the RBI; (c) decreases in the value of the Company's collateral or delays in enforcing the Company's collateral upon default by borrowers on their obligations to the Company; (d) the Company's ability to control the level of NPAs in the Company's portfolio effectively; (e) internal or external fraud, operational errors, systems malfunctions, or cyber security incidents; (f) volatility in interest rates and other market conditions; and (g) any adverse changes to the Indian economy. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. The information contained in this presentation is only current as of its date and the Company does not undertake any obligation to update the information as a result of new information, future events or otherwise. 49