#1BAJAJ B FINSERV Bajaj Finance Limited Q3 FY21 Investor Presentation 20 January 2021#2Presentation Path Section 01 Executive summary - Q3 FY21 Financial performance - Q3 FY21 Kil Section 03 MM Section 05 Section 07 Customer franchise and distribution reach Update on credit quality 3 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#3☐ Section 01 - Executive summary Q3 FY21 1.1 Quarter gone by 1.2 Executive summary on Q3 FY21 B BAJAJ FINSERV 3#4Quarter gone by BAJAJ B FINSERV A quarter marked by granular business recovery, significant improvement in risk metrics, tracking implementation of business transformation plan and putting into motion a plan for pre-COVID growth and financial perform ance from Q1 FY22. ROE Net NPA * AUM Opex to NII PAT Q3 FY21 1,43,550 Crore Yo Y Grow th 32.3% Q3 FY20 33.8% (1%) Yo Y Growth (29%) 1,146 Cr 3.3% Q3 FY20 5.9% This NPA is based on Hon'ble Supreme Court's interim order of not classifying NPA. *Not annualized 0.19% Q3 FY20 0.70% 4#5Executive summary - Q3 FY21 Balance Sheet and Franchise: 1. 2. BAJAJ B FINSERV Q3 AUM was at 143,550 crore as against 145,092 crore last year. Core AUM growth in Q3 FY21 was approximately 8,000 crore (adjusted for IPO receivable of 987 crore and higher ECL of Rs 520 crore) as compared to 9,559 crore in Q3 FY20. The Company expects core AUM growth to resume to pre-COVID levels by Q4 FY21. AUM growth is back across all businesses except auto finance. AUM growth was granular across all lines. The Company booked 6.04 MM new loans in Q3 FY21 as against 7.67 MM in Q3 FY20. Most businesses have started disbursing 85-100% of last year's volumes with incremental growth being observed every month. 3. In Q3, urban consumption businesses (B2B) were at 86%, rural consumption business (B2B) at 100%, credit card origination at 102%, ecommerce at 107% and auto finance business was at 62% of last year's volume. 4. In Q3, loan disbursements (B2C, SME, Rural B2C, Mortgages) were at 81% of last year's disbursements. 5. Mortgages disbursement was at 90% of Q3 FY20 level. How ever, AUM growth for the quarter was 770 crore as against 3,700 crore in Q3 FY20 due to significant portfolio attrition caused by pricing pressures. The Company has taken pricing actions to revert to pre-COVID growth levels by Q4 / Q1. 6. Commercial business AUM grew by 15%. LAS business AUM de-grew by 22%. 7. The Company acquired 2.19 MM new customers in the current quarter v/s 2.46 MM in Q3 FY20. Total customer franchise stood at 46.31 MM as of 31 Dec 2020, a growth of 15% YoY. Cross sell franchise stood at 25.25 MM, a growth of 8% YoY. 8. Existing customers contributed to 64% of new loans booked during Q3 FY21 vs 68% in Q3 FY20 9. Risk metrics of new volumes originated across businesses are tracking significantly better than pre-COVID-19 origination. 10. The Company has received RBI approval for issuance of cobranded credit card in association with DBS Bank (India) Limited. LO 5#6Executive summary - Q3 FY21 NIM Metrics 11. Margin profile in all lines of businesses was steady at pre-COVID levels other than mortgages. B BAJAJ FINSERV 12. Net Interest Income (NII) for Q3 FY21 was 4,296 crore as against 4,535 crore in Q3 FY20. NII for the quarter was lower by 239 crore compare to Q3 FY20. This was mainly caused by interest reversal of 450 crore versus 83 crore in Q3 FY20 and cost of surplus liquidity of 213 crore against 83 crore in Q3 FY20. Liquidity Management 13. As of 31 Dec 2020, the Company had consolidated liquidity buffer of 14,347 crore. This represents 11.6% of its total borrowing. Average consolidated liquidity buffer for the quarter was 19,373 crore. 14. Given stable market conditions, the Company has brought down its liquidity buffer to 11.6% of its total borrowing as of 31 Dec 2020 from 21.9% as of 20 Oct 2020. The company will go back to its pre-COVID liquidity buffer of 7-8% of its borrowings by Marʼ21. This will ensure that the cost of excess liquidity normalizes to pre-COVID levels in Q4. 15. In the last 45 days, as part of its strategy to reduce liquidity buffer and optimize cost of funds, the Company has made prepayments of approximately 6,600 crore. The Company's consolidated cost of fund for Q3 FY21 was 7.78% and is expected to go down to 7.5% by Mar'21. 16. Deposits book stood at ₹23,777 crore, a growth of 18% YoY. Its contribution to consolidated balance sheet was 19% as of 31 Dec 2020. The Company continued to attract sizable retail deposits in Q3. The Retail Corporate mix stood at 76 24 in Q3 FY21 as against 61 39 in Q3 FY20 in line with its strategy of reducing its reliance on corporate deposits. 6#7Executive summary - Q3 FY21 Operating expense management BAJAJ B FINSERV 17. Operating expenses for Q3 FY21 were 1,389 crore, lower by 9% YoY despite 58 crore increase in recovery costs. It was lower due to marginally lower business volumes and the measures taken to reduce operating expenses. Some of the opex measures have now been institutionalized to deliver sustained cost savings going forward. 18. The Company has rolled back some of the transient cost cuts (eg Employee costs) as it reverts to pre-COVID growth. However, business transformation should lead to structural reductions in call center costs, travel costs, advertising & promotion and employee trainings costs etc. Credit Costs 19. Loan losses and provisions for Q3 FY21 was ₹1,352 crore as against ₹ 831 crore in Q3 FY20. During the quarter, the Company has also done one-time principal write-off of 1,970 crore on account of COVID-19 related stress. The Company holds management overlay provision of 800 crore as of 31 Dec 2020 for COVID-19 related stress. 20. Loan loss and provisions estimates for FY21 are based on lifetime loss estimates on account of COVID-19. This also means that the Company is accounting for additional losses that may otherwise occur in FY22. 21. FY22 onwards, the Company expects loan losses and provisions to revert to pre-COVID-19 levels of 160-170 bps of average assets. If recoveries are better in FY22, we may experience lower net loan loss to average assets. 22. The Company experienced continued improvement in portfolio quality in Q3. In Q3, Collection efficiencies in bucket O was back to pre-COVID levels and in early buckets (1 and 2), it was significantly better than pre-COVID levels. 7#8Executive summary - Q3 FY21 BAJAJ B FINSERV 23. The Company last provided an update on its credit cost scenario model as part of Q2 earnings call. It expected the residual loan loss and provision in second half at ₹2,600-2,900 crore with a downward bias. Post 1,352 crore of provisioning in current quarter, the Company estimates residual credit costs in Q4 at 1,200 -1,250 crore. Thus, an overall credit cost of 5,925 -5,975 crore in FY21 on account of COVID-19. However, if the collection efficiencies remain better through Q4, there could be a further reduction in credit cost estimates. 24. The Company offered resolution plan to its customers pursuant to the RBI resolution framework for COVID-19 related stress dated 6 Aug 2020. Stage 1 receivables under resolution plan were ₹ 2,040 crore (Mortgages - 930 crore, unsecured 523 crore, B2B incl. retailer account 407 crore and AF - 179 crore) as of 31 Dec 2020 against which the Company is holding a provision of ₹397 crore. 25. Based on Hon'ble Supreme Court's interim order of not classifying customers as NPA after 31 Aug 2020, GNPA & NNPA for the quarter stood at 0.55% & 0.19% respectively. 26. Adjusted GNPA and NNPA stood at 2.86% and 1.22% respectively as against 1.61% and 0.70% as of Dec'19. B2B businesses (Urban and rural) have seen increase in NNPA by 7 bps, SME by 48 bps, B2C (urban and rural) by 89 bps and auto finance business by 348 bps. The Company expects to revert to pre-COVID NNPA by H1 FY22 except auto finance business which may take longer due to underlying collateral value. Profitability 27. Consolidated PBT for Q3 contracted by 28% to 1,555 crores due to increase in loan loss provisions by 520 crore, interest reversals by 367 crore and cost of additional liquidity by 130 crore v/s Q3 FY20. As the loan loss provisions, interest reversals and cost of surplus liquidity normalizes to pre-COVID levels by Q1 FY22, it will lead to natural addition to profitability. 8#9Executive summary - Q3 FY21 Capital BAJAJ B FINSERV 28. The Company continues to remain very well capitalized with CRAR of 28.18% as of 31 Dec 2020. Tier-1 capital was 24.73%. The Company has adequate capital to meet its next 3 years growth aspiration. Update on Business transformation: 29. The Company has accelerated its business transformation journey to provide financial products and services to its 46 MM. customers in a seamless manner by creating an omnichannel framework. The omnichannel model will enable the customer to move between online to offline and vice versa in a frictionless manner. 30. Business transformation required significant change in operating processes and core technology stack of the Company. The Company has made significant progress on these counts and expects to complete this process by May'21. An integrated offering & Omnichannel model will enable the Company to become a moment of truth company for the customers. 31. The Company is also developing or significantly transforming 4 'Productivity apps' - Sales One app, Merchant app, Collections app and Partner app. These apps will significantly im prove the productivity and efficiencies of our employees, channel partners and merchant ecosystem by May'21. Once deployed, this will require much lower headcount addition as a proportion of growth. 32. The Company is in the process of launching 'Bajaj Pay for consumers' in Q4. Bajaj Pay will offer an integrated payment solution comprising of UPI, PPI, EMI card and credit card to its customers. 33. The Company is building 'Bajaj Pay for merchants'. This will broaden payment solution offering for our ~103 K merchants and enable disproportionate growth in our market share from these merchants in the medium term. 34. The Company is building 5 proprietary marketplaces, 'EMI Store', 'Insurance Marketplace', 'Investment Marketplace', 'BF Health' and broking app with the help of group Companies. These 5 apps will provide customers with an option to review, compare and buy host of financial products and services across electronics, insurance, investments and health. 9#10Executive summary - Q3 FY21 BAJAJ B FINSERV 35. The Company also plans to partner with 25+ adjunct app ecosystem which have relevant product/services for its customers. These apps will provide adjacency to BFL's core offerings thereby increasing stickiness. 36. The Company plans to roll out the first phase of its business transformation by mid Jul'21. The business transformation oncefully delivered will drive significant velocity gains, reduction in operating costs and significant improvement in customer experience. Customer Experience: The Company's has a stated business strategy of 'acquire and cross sell'. The Company has 46 MM customers as of 31 Dec 2020 and it continues to add 1.8-2.5 MM new customers every quarter. It is imperative for the Company to design its product, processes, technology stack and practices that reduce friction for purchase and post purchase experience of customers. Some of the initiatives taken by the Company in last 2 quarters are as below: 37. Business transformation process will lead to significant enhancements in self service infrastructure for customers resulting in superior experience, greater stickiness and larger share of customer's financial services wallet. 38. As a proactive measure, the Company has appointed an Internal Ombudsman (IO) and has institutionalized a process to strengthen customer grievance redressal mechanism. 39. The Company has invested in centralized call monitoring infrastructure for its outsourced agency network to significantly improve controllership over its outsourced agency network. 40. As a proactive measure, the Company has started to invest in Debt Recovery Agent (DRA) certification for its collections infrastructure. It plans to cover all the agents in next 12-18 months in a phased manner. 41. The Company has a well-established Net promoter score (NPS) methodology to gauge customer experience. As a proactive measure, the Company has now started NPS for its collections processes. 10#11Executive summary - Q3 FY21 Subsidiaries B BAJAJ FINSERV 42. Bajaj Housing Finance Ltd (BHFL) profit after tax contracted by 24% to 99 crore in Q3 FY21 against 131 crore in Q3 FY20 due to higher provisioning. 43. BHFL'S AUM increased by 18% to 35,492 crore as of 31 Dec 2020 from 30,035 crore as of 31 Dec 2019. 44. BHFL's Net Interest Income for Q3 FY21 increased by 15% to 329 crore from 285 crore in Q3 FY20. 45. BHFL's Opex to NII improved to 26.4% in Q3 FY21 as against 33.7% in Q3 FY20. 46. During the quarter, BHFL has further increased its provision on stage 1 and 2 assets by 72 crore taking the overall contingency provision to 292 crore as of 31 Dec 2020. 47. Bajaj Financial Securities Ltd (B Finsec) made a net profit of 0.7 crore in Q3 FY21. 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 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 52.74% 3 Bajaj Holdings & Investment Limited (BHIL) (Listed) 100% 100% Bajaj Financial Securities Limited Broking & Depositary Above shareholding is as of 31 Dec 2020 33.43% 2 Bajaj Allianz Life Insurance Company Ltd Protection and retiral Bajaj Auto Limited (Listed) Auto business arm 74% BAJAJ B FINSERV Bajaj Allianz General Insurance Company Ltd Protection 1. 60.80% holding through promoter holding company and promoter group 2. 53.70% holding through promoter holding company and promoter group 3. 56.12% holding through promoter holding company and promoter group 74% 13#14What do we stand for “Non-bank with strategy & structure of a bank” B BAJAJ FINSERV "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" 14#15Our general long-term guidance on financial metrics 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 B BAJAJ FINSERV 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% 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 46.31 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 36% 9% 13% 9% 33% Consolidated borrowing mix for Money Markets :Banks: Deposits: ECB stood at 42% 35% 19% 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 16#17Our shareholder profile B BAJAJ FINSERV Top 20 investors & their holdings As on 31 As on 30 As on 31 MF 6.25% Others S.No Name of Shareholder Dec 20 Sep 20 Dec 19 1 BAJAJ FIN SERV LTD 52.74% 2 GOVERNMENT OF SINGAPORE 52.74% 4.28% 4.20% 4.62% 52.82% 3 MAHARASHTRA SCOOTERS LIMITED 3.15% 3.15% 3.15% 0.87% 4 AXIS LONG TERM EQUITY FUND 0.79% 0.93% 0.77% 5 NEW HORIZON OPPORTUNITIES MASTER FUND 0.77% 0.77% 0.77% Resident & non resident individuals 8.95% 6 AXIS BLUECHIP FUND 0.68% 0.64% 0.31% 7 STEADVIEW CAPITAL MAURITIUS LIMITED 0.63% 0.77% 0.89% 8 LIFE INSURANCE CORPORATION OF INDIA 0.62% 0.94% 0.10% 9 NEW WORLD FUND INC Corporates Shareholding profile 10 SMALLCAP WORLD FUND, INC 11 SBI-ETF NIFTY 50 0.56% 0.56% 0.56% 0.54% 0.54% 0.54% 0.52% 0.68% 0.57% 12 VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 0.50% 0.53% 0.48% 3.92% 13 VANGUARD EMERGING MARKETS STOCK INDEX FUND 0.45% 0.43% 0.44% 14 SBI EQUITY HYBRID FUND 0.45% 0.55% 0.42% Promoters & Promoter Group 15 ST. JAMES'S PLACE EMERGING MARKETS EQUITY UNIT TRUST MANAGED BY WASATCH ADVISORS INC 0.44% 0.46% 0.23% 56.12% 16 AXIS FOCUSED 25 FUND 0.44% 0.46% 0.32% FII & FPI 23.89% 17 PEOPLE'S BANK OF CHINA 0.42% 0.31% 0.30% FIDELITY INVESTMENT TRUST FIDELITY SERIES EMERGING 18 0.42% 0.00% 0.00% MARKETS OPPORTUNITIES FUND 19 SBI LIFE INSURANCE CO. LTD 0.39% 0.39% 0.43% 20 DF INTERNATIONAL PARTNERS 0.38% 0.38% 0.22% Above shareholding is as of 31 Dec 2020 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. 18#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 5. Medical equipment 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 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 1,210 urban locations and 1,604 rural locations in India with over 1,02,800+ point of sale Large customer franchise of 46.31 MM Amongst the largest new loan acquirers in India (6.04 MM in Q3 FY21) AUM mix of Consumer: Rural: SME: Commercial: Mortgages stood at 36% 9% 13% 9% 33% as of 31 Dec 2020 AUM of 1,43,550 crore as of 31 Dec 2020 and a post tax profit of 1,146 crore in Q3 FY21 Capital adequacy ratio (including Tier II capital) stood at 28.18% as of 31 Dec 2020. Tier I capital stood at 24.73% 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 124,162 crore with a mix of 42: 35: 19: 4 between money markets, banks, deposits & ECB as of 31 Dec 2020 • Consolidated Gross and Net NPA as of 31 Dec 2020 stood at 0.55% and 0.19%, respectively Provisioning coverage ratio as of 31 Dec' 2020 was 65% • Provisioning coverage on stage 1 & 2 stood at 190 bps as of 31 Dec 2020 versus 369 bps as of 30 Sept 2020. This was 90-100 bps during pre-pandemic situation. 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% 11% 13% as of 31 Dec 2020 Consumer business • AUM of 1,09,598 crore as of 31 Dec 2020 and a post tax profit of ₹1,049 crore in Q3 FY21 . Present in 1,210 locations with 75,100+ active distribution points of sale as of 31 Dec 2020 Largest consumer electronics, digital products & lifestyle products lender in India • 2-wheeler financing business disbursed 228 K accounts in the quarter (degrowth of 33% YOY) • 3-wheeler financing business disbursed 18K accounts in the quarter (degrowth of 67% YOY) • Amongst the largest personal loan lenders in India Payments Rural business . • • EMI Card franchise stood at 23.55 MM cards in force (CIF) as of 31 Dec 2020 Bajaj Finserv - RBL Bank co-branded credit card CIF stood at 1.95 MM as of 31 Dec 2020 Bajaj Finserv Mobikwik app has 18.30 MM users as of 31 Dec 2020 who have linked their EMI card to the wallet Highly diversified lender in rural markets offering 10 loan products across consumer and SME business categories Operates with a unique hub and spoke business model Geographic presence across 1,604 towns and villages with retail presence across 22,500+ points of sale 21#22Executive 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 97,335 crore with a mix of 44: 26: 24: 6 between money markets, banks, deposits & ECB as of 31 Dec 2020 Credit Quality . Gross and Net NPA as of 31 Dec 2020 stood at 0.68% and 0.24% respectively . Provisioning coverage ratio as of 31 Dec 2020 was 65% • Provisioning coverage on stage 1 & 2 stood at 218 bps as of 31 Dec 2020 versus 451 bps as of 30 Sep 2020. Credit Rating • . 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 35,492 crore as of 31 Dec 2020 and a post tax profit of 99 crore for Q3 FY21 • Capital adequacy ratio (including Tier II capital) stood at 24.94% as of 31 Dec 2020 Home Loans Loan Against Property . • Offers home loans to salaried customers for an average ticket size of approximately 45 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 51 lakhs Strategy is to sell LAP product to existing customers as well as focus on building distribution network • Currently present across 14 locations in India Rural • • Offers home loans and loans against property to salaried and self-employed customers with an average ticket size of approximately 17 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 78 locations in India 23#24- Executive summary – Bajaj Housing Finance Limited Lease Rental Discounting • B BAJAJ 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 · 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) Developer Financing • 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 ● 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 31 Dec 2020 stood at 0.06% and 0.03% respectively Treasury • Strategy is to create a balanced and sustained mix of borrowings · Borrowings stood at 26,694 crore with a mix of 66: 34 between banks and money markets as of 31 Dec 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 24#25B BAJAJ FINSERV 3.1 Financial statement summary - Consolidated il Section 03 Financial performance - Q3 FY21 3.2 Financial statement summary - Bajaj Finance Limited 3.3 Financial statement summary - Bajaj Housing Finance Limited 25#26Financial statement summary - Consolidated Financials snapshot B BAJAJ FINSERV in crore Q3 FY21 Q3 FY20 Y-o-Y 9 M FY21 9 M FY20 Y-o-Y FY20 Assets under management 143,550 145,092 (1%) 143,550 145,092 (1%) 147,153 Assets under finance 137,920 139,561 (1%) 137,920 139,561 (1%) 141,376 Interest income 5,723 6,104 (6%) 17,279 16,668 4% 22,970 Fee and other income 797 777 3% 2,009 2.125 (5%) 2,879 Net gain on fair value changes on investment 139 143 (3%) 540 362 49% 537 Total Income 6,659 7,024 (5%) 19,828 19,155 4% 26,386 Interest expenses 2,363 2,489 (5%) 7,218 6,926 4% 9.473 Net Interest Income 4,296 4,535 (5%) 12,610 12,229 3% 16,913 Operating Expenses 1,389 1,534 (9%) 3,702 4,209 (12%) 5,662 Loan losses and provisions 1,352 831 63% 4,738 1,976 140% 3,929 ECL stage 1 & 2 (2,391) 203 (1278%) 409 462 (11%) 1,318 ECL stage 3 & write off 3.743 628 496% 4,329 1,514 186% 2,611 Profit before tax 1,555 2,170 (28%) 4,170 6,044 (31%) 7,322 Profit after tax 1,146 1,614 (29%) 3,073 4,316 (29%) 5,264 Ratios Operating expenses to Net Interest Income 32.3% 33.8% 29.4% 34.4% 33.5% Loan loss to average AUF* 1.00% 0.61% 3.39% 1.57% 3.10% Earning per share Basic (*) * 19.08 27.32 51.18 74.17 89.77 Return on Average Assets* 0.9% 1.2% 2.2% 3.4% 4.1% Return on Average Equity * 3.3% 5.9% 9.1% 16.6% 20.2% 26 *Not annualized#27Financial statement summary - Bajaj Finance Limited B BAJAJ FINSERV in Crore Financials snapshot Q3 FY21 Q3 FY20 Y-o-Y 9 M FY21 9 M FY20 Y-o-Y FY20 Assets under management 109,598 116,460 (6%) 109,598 116,460 (6%) 116,102 Assets under finance 107,056 113,601 (6%) 107,056 113,601 (6%) 113,417 Interest income 4,973 5,486 (9%) 15,141 15,052 1% 20,668 Fee and other income 745 709 5% 1,908 1,952 (2%) 2,706 Net gain on fair value changes on investment 129 121 7% 487 315 55% 460 Total Income 5,847 6,316 (7%) 17,536 17,319 1% 23,834 Interest expenses 1,870 2,051 (9%) 5,723 5,801 (1%) 7,857 Net Interest Income 3,977 4,265 (7%) 11,813 11,518 3% 15,977 Operating Expenses 1,310 1,449 (10%) 3,502 3,975 (12%) 5,364 Loan losses and provisions 1.245 817 52% 4,520 1,940 133% 3,805 ECL stage 1 & 2 (2,463) 198 (1344%) 229 445 (49%) 1,233 ECL stage 3 & write off 3,708 619 499% 4,291 1,495 187% 2,572 Profit before tax 1,422 1,999 (29%) 3,791 5,603 (32%) 6,808 Profit after tax 1,049 1,488 (30%) 2,795 3,990 (30%) 4,881 Ratios Operating expense to Net Interest Income 32.9% 34.0% 29.6% 34.5% 33.6% Loan loss to Average AUF* 1.19% 0.74% 4.10% 1.86% 3.65% Return on Average Assets* 1.0% 1.3% 2.5% 3.8% 4.7% Return on Average Equity* * Not annualized 3.1% 5.6% 8.4% 15.5% 19.0% 27#28Financial statement summary - Bajaj Housing Finance Limited B in Crore BAJAJ FINSERV Financials snapshot Q3 FY21 Q3 FY20 Yo Y 9 M FY21 9M FY20 Yo Y FY20 Assets under management 35,492 30,035 18% 35,492 30,035 18% 32,705 Assets under finance 30,772 25,961 19% 30,772 25,961 19% 27,975 Interest income 747 620 20% 2.134 1,616 32% 2,303 Fee and other income 65 81 (20%) 130 212 (39%) 269 Net gain on fair value changes on Investments 9 22 (59%) 51 44 16% 74 Total Income 821 723 14% 2,315 1,872 24% 2,646 Interest expenses 492 438 12% 1,495 1,125 33% 1,616 Net Interest Income 329 285 15% 820 747 10% 1,030 Operating Expenses 87 96 (9%) 231 266 (13%) 339 Loan losses and provisions (ECL stage 1 & 2) 72 CO 6 1100% 180 18 900% 86 Loan losses and provisions (ECL stage 3 & write off) 35 8 338% 37 18 106% 38 Profit before tax 135 175 (23%) 372 445 (16%) 567 Profit after tax 99 131 (24%) 274 331 (17%) 421 Ratios Operating expense to Net Interest Income 26.4% 33.7% 28.2% 35.6% 32.9% Loan loss to Average AUF* 0.36% 0.06% 0.74% 0.17% 0.55% Return on Average Assets* 0.3% 0.5% 0.9% 1.5% 1.9% Return on Average Equity* * Not annualized 1.7% 3.3% 4.8% 8.7% 9.1% 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 4.5 4.6 Consolidated Behaviouralized ALM as of 31 Dec- Bajaj Finance Limited Behaviouralized ALM as of 31 Dec - Bajaj Housing Finance Limited Disciplined ALM Management - Bajaj Finance Limited Liability mix over the last 9 years Bajaj Finance Limited 29#30- Conservative 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 7.0 7.0 28.2% 26.4% 26.6% 24.7% 6.6 25.0% 6.4 22.0% 6.2 5.3 19.1% 17.5% 18.7% 18.0% 16.2% 16.1% 15.0% 14.2% 14.6% 6.31 24.7% 22.6% 23.0% 20.3% 5.4 20.7% 21.3% 19.5% 19.7% 5.1 * 4.7 4.7 4.6 16.3% 5.7% 5.0% 4.4% 3.8% 3.3% 3.4% 3.7% 3.8% 3.6% 3.5% 3.0% 2.5% Mar'12 Mar'13 -Tier 1 Capital Mar'14 Mar'15 -Tier 2 Capital Mar'17 Mar'16 -Total Capital Adequacy Ratio (CRAR) Mar'18 Mar'19 Mar 20 -Leverage Ratio Jun '20 Sep'20 Dec'20 Leverage Threshold * Standalone leverage is approximately 3.9X as of 31 Dec 2020 Capital Adequacy Ratios (CRAR) are on standalone basis Mar '19 onwards numbers are as per Ind AS denotes point at which the Company initiated its capital raising plan in last 9 years 30#31Resilient business model - Consolidated BAJAJ B FINSERV 47.0% 46.0% 44.6% 45.0% 43.7% 44.0% 43.8% 43.1% 41.4% 41.8% 38.4% 36.0% 35.3% 35.4% 32.9% 33.3% 32.3% 29.9% 28.4% 33.5% 27.9% 27.8% 27.2% 26.4% 9.74% 9.85% 9.87% 9.16% 9.47% 9.00% 8.24% 8.27% 8.39% 8.17% 8.02% 7.78% 4.2% 4.1% 3.6% 3.3% 3.5% 3.7% 3.9% 4.1% 4.1% 3.4% 2.8% 2.9% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 COF -ROA Mar'18 Fee Income to PBT Mar '19 Mar'20 Jun '20 Sep'20 Dec 20 Opex to NII Mar '19 onwards numbers are as per Ind AS. Jun 20, Sep/20 & Dec'20 numbers of COF are for the quarter Post Ind AS, Fee income to PBT represents non-loan fees and commission income as a % of Profit Before Tax 31#32Behaviouralized ALM as of 31 Dec 2020 - BFL As per previous GAAP BAJAJ B FINSERV in Crore Particulars 1-7 D 8 - 14 D 15 30 D >1-2 M Cash & Investments 12,307 0 110 1 > 2-3 M 1 > 3-6 M > 6M -1Y > 1-3Y - > 3 5 Y > 5 Y Total 695 1,069 1,716 0 5,580 21,479 Advances 3,520 1,263 2,308 5,334 4,986 11,589 19,217 36,836 18,364 6,660 1,10,076 Other inflow S 534 802 3,814 29 570 250 919 1,214 0 4,429 12,562 Total Inflows (A) 16.361 2,064 6,232 5,364 5,557 12,535 21,205 39,766 18,364 16,668 1,44,116 Cumulative Total Inflows (B) 16,361 18,426 24,658 30,022 35,578 48,113 69,318 1,09,084 1,27,448 1,44,116 Borrowings 6,338 3,256 623 1,358 2,807 5.149 13,696 44,125 10,377 11,146 98.875 Capital Reserves and Surplus 35.772 35,772 Other Outflows 3,295 214 342 352 541 1,621 421 1,375 709 Total Outflows (C) 9.634 3,470 965 1,710 3,348 6,770 14,117 45,500 11,086 598 47,517 1,44,116 9,469 Cumulative Total Outflows (D) 9,634 13,104 14,069 15,779 19,127 25,897 40,014 85,514 96,600 1,44,116 Mismatch (EAC) 6,727 (1,406) 5,267 3,654 2,209 5,765 7,088 (5,734) 7,278 (30,849) Cumulative mismatch (F = B-D) 6,727 5,322 10,589 14,243 16,451 22,216 29,304 23,570 30,849 Cumulative mismatch as % 70% 41% 75% 90% 86% 86% 73% 28% 32% 0% (F/D) Permissible cumulative gap % -20% -15% Additional borrowings possible 16,753 24,783 # Includes Rs 3,975 crore of prepayment to banks. In last 60 days, BFL has prepaid 6,600 crore of term loans. 32 2#33Behaviouralized ALM as of 31 Dec 2020 - BHFL As per previous GAAP Particulars 1-7 D 7-14 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 BAJAJ B FINSERV in Crore Total Cash, Cash Equivalents & 509 250 750 1,509 Investments Advances 335 152 279 583 595 1,655 3,005 9,161 5,687 3,740 3,301 2,788 31,280 Other inflow s 221 1440 2 151 1,518 53 786 Total Inflows (A) 1,066 402 1,718 585 Cumulative Total Inflows (B) 1,066 1,468 3,186 3.772 746 4,517 3,924 3,058 9,947 8,441 11,499 21,446 839 567 6,525 4,307 3.481 27,972 32,279 35,760 180 709 6,467 3,497 39,257 39,257 Borrowings 1,059 48 290 3,432 3,506 12,622 4,119 1,001 0 Capital and Reserves and Surplus Other Outflows 229 274 477 284 182 971 Total Outflows (C) 229 274 1,536 331 473 4,403 Cumulative Total Outflows (D) 229 503 2,038 2,370 2,843 7,246 78 153 0 0 2,500 385 3,584 12,775 4,119 1,001 2,500 8,033 10,829 23,605 27,724 28,725 31,225 39,257 1,800 27,877 5,847 5,847 5,533 39.257 Mismatch (E = A-C) 837 128 183 254 273 (479) (526) (2,828) 2,406 3,306 981 (4,536) Cumulative mismatch (F= B-D) 837 965 1,148 1.402 1,675 1.195 670 (2,158) 248 3.554 4,536 Cumulative mismatch as a % (F/D) 366% 192% 56% 59% 59% 16% 6% -9% 1% 12% 15% 0% Permissible cumulative gap % Additional borrowings possible -20% 1,994 -15% 753 33 33#34Disciplined ALM Management - Bajaj Finance Limited -Cumulative gap upto 1 month -Cumulative gap upto 12 month -Permissible limit 300% BAJAJ B FINSERV 141% 119% 120% 220% 182% 36% 36% 61% 48% 71% 50% 44% 75% 96% 88% 51% 70% 73% 57% 54% 38% 16% 4% -15% -15% -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 Sept'20 Dec'20#35Liability mix over the last 9 years - Bajaj Finance Limited BAJAJ B FINSERV 4% 5% 5% 5% 5% 6% 9% 8% 8% 8% 10% 3% 13% 4% 3% 4% 6% 4% 5% 3% 4% 6% 5% 4% 4% 4% 7% 3% 33% 38% 31% 25% 35% 38% 35% 38% 35% 35% 43% 40% 30% 31% 28% 26% 34% 54% 58% 48% 58% 31% 53% 35% 21% 21% 22% 24% 15% 12% 0% 0% Mar'12 Mar 13 Mar'14 4% Mar'15 6% 8% Mar'16 Mar'17 Mar'18 Mar'19 Deposits I Bank Loans (incl. CC/OD/W CDL) NCD Subordinate Debt ■Short term Borrowings Mar 20 Jun '20 Sept 20 Dec 20 ECB 35 Standalone borrowing mix#365.1 Customer franchise Section 05 Customer franchise and distribution reach 5.2 Geographic presence 5.3 Strong distribution reach BAJAJ B FINSERV 36#37Customer franchise Q3 FY20 40.38 MM * 31.86 MM Total Franchise Credit segment filter BAJAJ B FINSERV Q3 FY21 Q2 FY21 46.31 MM 44.11 MM 36.60 MM 30.76 MM Overall Cross sell franchise 35.32 MM Non delinquent 27.41 MM customers 30.80 MM Cross sell franchise 23.48 MM 25.25 MM * * (58%) (55%) New to Bajaj Finance Customers Q2 FY20 Q3 FY20 19,21,238 24,61,473 Represents cross sell franchise as a % of total franchise Q4 FY20 19,00,989 34.72 M M 33.48 MM 29.63 M M 23.87 M M (54%) * Q1 FY21 5,32,441 Q2 FY21 12,18,724 Q3 FY21 21,92,461 37#38Geographic presence Map not to scale Blue dots indicates newly opened locations in Q3 FY21 B BAJAJ FINSERV 31 Mar 31 Mar 31 Mar 31 Mar 30 Sep 31 Dec Geographic Presence 2017 2018 2019 2020 2020 2020 Urban 377 730 927 1,035 1,134 1,210 Of which urban lending branches 377 730 927 1,035 1,134 1,137 Of which urban lending franchise 73 Rural 538 602 903 1,357 1,507 1,604 Of which rural lending branches 177 219 347 527 527 527 Of which rural lending franchise Total Bajaj Finance presence 361 383 556 830 980 1,077 915 1,332 1,830 2,392 2,641 2.814 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 Sept 2020 31 Dec 2020 Consumer durable stores – Urban 14,000+ 15,500+ 20,400+ 24,200+ 24,200+ 24.700+ Consumer durable stores - Rural 5,500+ 8,200+ 14,500+ 19,600+ 19,600 + 22,500+ Digital product stores 5,900+ 15,900 + 22,500+ 26,400+ 26,400+ 25,400+ Lifestyle retail stores 3,900+ 6.000+ 7,700+ 9,500+ 9,500+ 8,800+ EMI card - retail spends stores 5,600 + 12,100+ 19,100+ 24,300+ 24,300+ 10,400+ ' Bajaj Auto dealers, sub-dealerships and ASSC 3,200+ 3,900+ 4,600+ 5,500+ 5,500+ 5,800+ Direct Sales Agents 1,500+ 2,100+ 2,800+ 4,900+ 4,900+ 5.200+ Overall active distribution network 39,600+ 64,300+ 91,700+ 1,14,400+ 1,14,400+ 1,02,800+ 39#40B BAJAJ FINSERV Section 06 Business segment wise AUM 6.1 6.2 Business segment wise AUM as of 31 Dec- Consolidated Business segment wise AUM as of 31 Dec – Mortgages 40#41Business segment wise AUM as of 31 Dec 2020 - Consolidated B BAJAJ FINSERV in crore Composition as Assets Under Management Standalone as of 31 Dec 2020 BHFL as of 31 Dec 2020 Consolidated as of 31 Dec 2020 Consolidated as of 31 Dec 2019 Growth of 31 Dec 2020 Auto Finance Business 12,707 12,707 13.176 -4% 9% Sales Finance Business 10,186 10.186 13,960 -27% 7% Consumer B2C Business 28,060 981 29,042 29,381 -1% 20% Rural Sales Finance Business 2,438 2,438 2,708 -10% 2% Rural B2C Business 10,954 10,954 9,957 10% 7% SM E Lending Business 18,716 165 18,882 18,703 1% 13% Securities Lending Business 4,977 5,074 6,514 -22% 4% Commercial Lending Business 7,510 7,510 6,503 15% 5% Mortgages 14,050 34,346 46,758 44,192 6% 33% Total 109,598 35,492 143,550 145,092 -1% Credit Card - CIF 1.9 MM 1.7 MM 17% EMI Card - CIF 23.5 MM 20.5 MM 15% Wallets 18.3 M M 13.5 MM 36% 41#42- Break-up of AUM as of 31 Dec 2020 Mortgages Bajaj Housing Finance Limited Mortgage - All B BAJAJ FINSERV in crore Assets Under Management Composition as 31 Dec 2020 31 Dec 2019 Grow th 31 Dec 2020 31 Dec 2019 Growth of 31 Dec 2020 Home Loans 22,217 19,570 14% 26,120 25,170 4% 56% Loan against property 4,417 3,561 24% 11,249 11,823 -5% 24% Lease rental development 3,972 2,879 38% 5.075 3,480 46% 11% Developer Finance 1,893 1,665 14% 1,930 1,890 2% 4% Rural 1,846 1,486 24% 2,384 1,829 30% 5% Total 34.346 29,160 18% 46,758 44,192 6% 100% Home loan portfolio customer categorisation Home Loan to Salaried Home Loan to Self Employed Home Loan to Professional Bajaj Housing Finance Limited Mortgage - All Composition as of 31 Dec 2020 31 Dec 2019 Growth 31 Dec 2020 31 Dec 2019 Grow th 31 Dec 2020 20,632 17,870 15% 22,741 18,765 21% 84% 1.271 1,245 2% 2.821 3.014 -6% 11% 1,156 1,062 9% 1,448 1,315 10% 5% Salaried focused home loans acquisition strategy (94% of Q3 FY21 acquisition) 42#43☐ Section 07 Update on credit quality Provisioning Coverage - 7.1 Consolidated 7.2 Provisioning Coverage Consolidated (Proforma) 7.3 ECL summary - Consolidated ECL summary - Bajaj Housing 7.4 Finance Limited 7.5 Portfolio stagewise provisioning BAJAJ B FINSERV 7.6 Portfolio credit quality - Consolidated 43#44Provisioning Coverage - Consolidated BAJAJ B FINSERV in Crore Consol AUM PCR GNPA % NNPA % Assets Under Management GNPA NNPA 31 Dec 2020 (%) 31 Dec 19 31 Dec 20 31 Dec 19 31 Dec 20 Auto Finance Business 12,707 443 146 67% 5.68% 3.16% 2.61% 1.07% Sales Finance Business 10,186 8 1 85% 0.92% 0.05% 0.18% 0.01% Consumer B2C Business 29,042 82 20 76% 1.34% 0.28% 0.38% 0.07% Rural Sales Finance Business 2,438 1 0 79% 0.59% 0.02% 0.12% 0.00% Rural B2C Business 10,954 37 9 74% 1.33% 0.32% 0.44% 0.08% SM E Lending Business 18,882 100 25 75% 1.41% 0.51% 0.36% 0.13% Securities Lending Business 5,074 Commercial Lending Business 7,510 0.60% 0.25% Mortgages 46,758 131 81 38% 1.36% 0.30% 0.99% 0.19% Total 143,550 801 283 65% 1.61% 0.55% 0.70% 0.19% Note: Above data is basis Hon'ble Supreme Court's interim order dated 3 Sep 2020, which has directed that accounts which were not declared NPA till 31 Aug 2020 shall not be declared as NPA till further orders. 44#45Provisioning Coverage - Consolidated (Proforma) BAJAJ B FINSERV in Crore Consol AUM Assets Under Management GNPA NNPA 31 Dec 2020 PCR (%) GNPA % NNPA % 31 Dec 19 31 Dec 20 31 Dec 19 31 Dec 20 Auto Finance Business 12,707 1.617 804 50% 5.68% 11.54% 2.61% 6.09% Sales Finance Business 10,186 265 32 88% 0.92% 1.91% 0.18% 0.24% Consumer B2C Business 29,042 982 355 64% 1.34% 3.34% 0.38% 1.23% Rural Sales Finance Business 2,438 52 6 כס 88% 0.59% 2.08% 0.12% 0.26% Rural B2C Business 10,954 416 162 61% 1.33% 3.64% 0.44% 1.45% SM E Lending Business 18,882 452 160 65% 1.41% 2.33% 0.36% 0.84% Securities Lending Business 5,074 Commercial Lending Business 7,510 0.60% 0.25% Mortgages 46,758 410 242 41% 1.36% 0.95% 0.99% 0.56% Total 143,550 4,194 1,761 58% 1.61% 2.86% 0.70% 1.22% Note: Above data is before considering Hon'ble Supreme Court's interim order dated 3 Sep 2020, which has directed that accounts which were not declared NPA till 31 Aug 2020 shall not be declared as NPA till further orders. 45#46ECL summary - Consolidated B BAJAJ FINSERV Assets categorization Dec '19 Mar'20 Jun'20 Sep'20 Dec'20 Stage 1 & 2 (represents standard assets) 98.39% 98.39% 98.60% 98.66% 97.14% Stage 3 (classified as NPA) 1.61% 1.61% 1.40% 1.03% 0.55% Stage 3 (not classified as NPA) 0.31% 2.32% Summary of stage wise assets and provision for impairment allow ance in Crore Assets and impairment allowance Dec '19 Mar'20 Jun'20 Sept 20 Dec'20 Gross Stage 1 & 2 assets* (A) 1,43,534 1,44,199 1,36,461 1,38,035 1.42.287 ECL Provision Stage 1 & 2 (B) 1,443 2,299 3,729 5,099 2,708 Net Stage 1 & 2 assets (C = A-B) 1,42,091 1,41,900 1,32,732 1,32,936 1,39,579 ECL Provision % Stage 1 & 2 assets (D = B/A) 1.01% 1.59% 2.73% 3.69% 1.90% Gross Stage 3 assets (E) 2.354 2.363 1,938 1,873 4,194 ECL Provision Stage 3 (F) 1.335 1,425 1,257 1,102 2,433 Net Stage 3 assets (G = E-F) 1,019 938 681 771 1,761 Coverage Ratio % Stage 3 assets (H= F/ E) 57% 60% 65% 59% 58% Overall coverage ratio 1.90% 2.54% 3.60% 4.43% 3.51% * 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. 46#47ECL summary - Bajaj Housing Finance Limited B BAJAJ FINSERV ECL categorization Dec'19 Mar'20 Jun'20 Sept'20 Dec 20 Stage 1 & 2 (represents standard assets) 99.93% 99.92% 99.92% 99.91% 99.65% Stage 3 (represents GNPA) 0.07% 0.08% 0.08% 0.08% 0.06% Stage 3 (not classified as NPA) 0.01% 0.29% Summary of stage wise assets and ECL provisioning in Crore Financial Assets & ECL provision Dec'19 Mar'20 Jun'20 Sept'20 Dec 20 Gross Stage 1 & 2 assets* (A) 26,532 28,199 28,739 29,601 31,356 ECL Provision Stage 1 & 2 (B) 43 112 156 220 291 Net Stage 1 & 2 assets (C = A-B) 26,488 28,088 28.582 29.381 31,065 ECL Provision % Stage 1 & 2 assets (D = B/A) 0.16% 0.40% 0.54% 0.74% 0.93% Gross Stage 3 assets (E) 19.9 23.7 24.1 26.9 110.2 ECL Provision Stage 3 (F) 6.3 9.0 9.3 10.1 41.3 Net Stage 3 assets (G = E-F) 13.6 14.7 14.8 16.8 68.9 Coverage Ratio % Stage 3 assets (H= F/ E) 32% 38% 38% 38% 38% ECL/ Total Assets 0.19% 0.43% 0.58% 0.78% 1.06% * Gross stage 1 & 2 assets represent loans balance as per Ind AS after adjusting for the impact of amortisation 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) 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. 47#48Portfolio stage wise provisioning - Q3 FY21 B BAJAJ FINSERV in crore Gross Assets Receivable Stagew ise Provision PCR % Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Auto Finance Business 9,779 2,634 1,617 122 375 813 1.2% 14.3% 50.3% Sales Finance Business 10,217 222 265 152 114 233 1.5% 51.4% 87.8% Consumer B2C Business 27,118 1,393 982 357 410 628 1.3% 29.4% 63.9% Rural Sales Finance Business 2,418 34 52 22 19 46 0.9% 54.2% 87.8% Rural B2C Business 10,603 422 416 107 115 254 1.0% 27.1% 61.1% SM E Lending Business 18,469 493 452 243 149 292 1.3% 30.3% 64.6% Securities Lending Business 4,971 11 0 3 0 0 0.1% 3.5% 0.0% Commercial Lending Business 7,483 36 0 16 1 0 0.2% 2.2% 0.0% Mortgages 41,918 647 410 384 120 168 0.9% 18.5% 41.1% Total (Q3 FY21) 1,32,974 5,892 4,194 1,405 1,303 2,433 1.1% 22.1% 58.0% Total (Q3 FY20) 1,36,407 3,579 2,354 770 672 1,335 0.6% 18.8% 56.7% Gross Assets receivables Provision Net Assets receivables Total (Q3 FY21) Total (Q3 FY20) 1,43,061 1,42,339 ' 5,141 1,37,920 2,778 1,39,561 Stage 1 - Customer with no overdue on reporting date; Stage 2 - Customer with 1 & 2 instalments overdue, including weak accounts without any overdue; Stage 3 - Customer with 3 & above instalments overdue 48#49Portfolio credit quality - Consolidated Consumer durable + Lifestyle Two & three-wheeler B BAJAJ FINSERV Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1 98.90% 98.96% 98.73% 98.60% 98.47% 98.55% 98.65% 92.10% 98.92% 1 88.32% 89.68% 90.15% 88.70% 87.63% 85.81% 86.00% 72.62% 76.15% 2 0.74% 0.70% 0.90% 0.96% 1.04% 0.96% 0.89% 7.80% 0.78% 2 9.60% 8.36% 8.06% 9.39% 10.17% 11.69% 11.27% 25.19% 17.59% 9% 30% 8% 25% 7% 6% 20% 5% 15% 4% 3% 10% 2% 5% 1% 0% 0% Sep '18 Dec'18 Mar'19 Jun '19 Sep '19 Dec'19 Feb'20 Sep'20 Dec'20 Sep '18 Dec'18 Mar'19 June '19 Sep 19 Dec'19 Feb 20 Sep 20 Dec'20 Digital product B2C loans Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1 98.51% 98.59% 98.52% 98.29% 98.12% 98.02% 98.00% 90.52% 95.44% 98.72% 98.81% 98.30% 97.69% 97.85% 98.24% 98.49% 88.74% 98.78% 2 0.87% 0.80% 1.21% 1.51% 1.37% 1.08% 0.97% 11.14% 0.88% 1.08% 1.03% 1.09% 1.20% 1.33% 1.39% 1.43% 9.03% 3.35% 2 12% 10% 8% 6% 4% 2% 0% Sep '18 Dec'18 1% 0% Mar'19 June '19 Sep '19 Dec' 19 Feb'20 Sep 20 Dec 20 Sep '18 Dec'18 Mar'19 Jun '19 Sep 19 Dec'19 Feb'20 Sep 20 Dec'20 Dec'20 numbers are net of provision excl stage 1. 49 09876543210 10% 9% 8% 7% 6% 5% 4% 3% 2% do do do do do do do do do do do#50Portfolio credit quality - Consolidated Business & professional loans B BAJAJ FINSERV Rural Lending B2B 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 1st Bucket 2nd Bucket ■3rd Bucket 4th Bucket 15th Bucket Stage 1 2 98.76% 98.82% 98.75% 98.59% 98.42% 98.35% 98.27% 93.43% 97.19% 1 99.44% 99.54% 99.26% 98.93% 98.87% 99.21% 99.33% 92.84% 99.21% 0.81% 0.78% 0.82% 0.92% 1.10% 1.12% 1.13% 6.10% 1.92% 2 0.32% 0.24% 0.45% 0.63% 0.51% 0.36% 0.32% 7.11% 0.52% do do do do do do do 7% 6% 8% 7% 5% 6% 5% 4% 4% 3% 3% 2% 2% 1% 0% do do do do do do do do do 1% 0% Sep '18 Dec 18 Mar'19 June '19 Sep '19 Dec 19 Feb 20 Sep 20 Dec 20 Sep '18 Dec 18 Mar'19 Jun '19 Sep 19 Dec 19 Feb 20 Sep 20 Dec 20 Rural lending B2C Loan against property Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 15th Bucket Stage 1 98.54% 98.80% 98.85% 98.65% 98.47% 98.32% 98.32% 90.94% 94.75% 1 99.16% 96.95% 97.65% 97.70% 97.31% 97.06% 97.06% 96.93% 97.31% 2 1.07% 0.76% 0.74% 0.91% 1.02% 1.13% 1.09% 8.29% 3.44% 2 0.17% 0.19% 0.23% 0.14% 0.60% 0.27% 0.30% 2.36% 1.78% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Sep '18 Dec'18 Mar'19 Jun;19 Dec'20 numbers are net of provision excl stage 1. 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Sep 19 Dec 19 Feb'20 Sep 20 Dec'20 Sep '18 Dec'18 Mar'19 Jun '19 Sep 19 Dec'19 Feb 20 Sep'20 Dec 20 50#51Portfolio credit quality - Consolidated Home loans Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1 99.40% 99.54% 99.52% 99.42% 99.61% 99.63% 99.60% 98.31% 98.67% 2 0.21% 0.20% 0.22% 0.27% 0.13% 0.15% 0.11% 1.40% 1.03% 1.8% 1.6% 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% Sep '18 Dec 18 Mar'19 Jun '19 Sep '19 Dec 19 Feb'20 Sep 20 Dec 20 Dec'20 numbers are net of provision excl stage 1. B BAJAJ FINSERV 51#52BAJAJ FINANCE LIMITED Q3 FY21 Investor Presentation Thank You B BAJAJ FINSERV#53Disclaimer 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. 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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. 53