#1BAJAJ B FINSERV Bajaj Finance Limited Q4 FY19 Investor Presentation 16th May, 2019#2Presentation Path Section 01 Bajaj Finance Limited overview Section 02 Kil Ind AS financial performance FY19 q Section 03 Non financial commentary 03 - - Q4 FY19 & 14 19 $ Section 04 Asset liability management Section 05 Customer Franchise and distribution reach 28 Section 06 Business segment wise AUM 32 $ 21 * 'III N BAJAJ B FINSERV Section 07 Bajaj Housing Finance Limited overview Section 08 Update on credit quality 34 42 Section 09 Leverage risk assessment of unsecured portfolios 49#3Section 01 – Bajaj Finance Limited overview B BAJAJ FINSERV 3#4Bajaj group structure I I I I I Bajaj Auto Limited (Listed) Auto business arm 33.43% 1 Bajaj Finance Limited (Listed) Lending business arm Bajaj Holdings & Investment Limited (Listed) BAJAJ B FINSERV 39.29% 2 Bajaj Finserv Limited (Listed) Financial services arm 74% 54.99% 3 Bajaj Allianz Life Insurance Company Ltd Protection and retiral 100% 100% Bajaj Housing Finance Limited Bajaj Financial Securities Limited Mortgage Lending Broking Above shareholding is as of 31 March 2019 Bajaj Allianz General Insurance Company Ltd Protection and retiral 74% 1. 51.18% holding through promoter holding company and promoter group 58.37% holding through promoter holding company and promoter group 2. 3. 55.17% holding through promoter holding company and promoter group#5Bajaj Finserv group - Executive summary B BAJAJ FINSERV B BAJAJ FINSERV Bajaj Finserv is the financial services arm of the Bajaj group with business interest in "Lending" and "Protection and Retiral" through its various subsidiaries • BAJAJ B FINSERV Bajaj Finance Limited. • A 32 year old non bank finance company Diversified across consumer, payments, rural, SME, commercial & mortgages segments 927 urban locations and 903 rural locations with over 91,700+ distribution points • Investment grade long term issuer credit • • • rating of BBB-/ Stable and short term rating of A-3 by S&P Global Ratings Credit rating of AAA/Stable by CRISIL, India Ratings, CARE Ratings and ICRA Credit rating for short term debt program is A1+ by CRISIL, ICRA & India Ratings Large customer franchise of 34.48 MM • 23.5 MM new loans booked in FY19 . BAJAJ Allianz Bajaj Allianz General Insurance Limited • 2nd largest private general insurer in India as of FY 19 • Consistently profitable amongst the private players. ROE of 16.2% in FY19 • Multi-channel distribution supported by a wide range of products across all retail & corporate segments • Offers a wide range of general insurance products across retail and corporate segments • Combined ratio of 96.7% for FY19 and 103.9% for Q4 FY19 Recognized in the market for claims servicing • AUM of 17.2K crores Solvency ratio of 255%, well above regulatory solvency margin of 150% BAJAJ Allianz Bajaj Allianz Life Insurance Limited Amongst top 5 private players as of FY19 on new business Diversified distribution mix consisting of agency, bank assurance, other partners, direct etc. • Deep pan India distribution reach of 600+ branches • AUM of 566 BN as on 31 March 19 • Networth of 96.5 BN as on 31 March 19 • One of the most profitable private life insurers in India Solvency ratio of 804% LO 5#6What 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 envisages an optimal mix of risk and profit to deliver a sustainable business model" "Business construct to deliver a sustainable ROA of 3% and ROE of 18-20% in the medium term " "Focused on continuous innovation to transform customer experience to create growth opportunities..." 6#7Key strategic differentiators Part of the Bajaj group - one of the oldest & most respected business houses A trusted brand with strong brand equity Focus on mass affluent and above clients B BAJAJ FINSERV Overall franchise of 34.48 MM and cross sell client base of 20.67 MM Strong focus on cross selling assets, insurance and wealth products to existing customer A well diversified balance sheet 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: Mortgage stood at 39% 8% 14% 10%: 29% Consolidated borrowing Mix for Banks: Money Markets: Deposits stood at 37%: 50%: 13% Highly agile & innovative Continuous improvements in product features and digital technologies to maintain competitive edge Deep investment in technology and analytics. Has helped establish a highly metricised company and manage risk & controllership effectively 7#8Bajaj Finance - Shareholder profile Resident ind 9.23% FII & FPI 20.67% B BAJAJ FINSERV Corporates 6.08% Others S.No Name of Shareholder 1 BAJAJ FIN SERV LTD Top 20 investors & their holdings As on 31 As on 31 As on 31 Mar'19 Dec'18 Mar'18 54.99% 2 GOVERNMENT OF SINGAPORE 54.99% 54.99% 3.68% 3.70% 3.81% MF 1.69% 3 MAHARASHTRA SCOOTERS LTD. 3.28% 3.28% 3.28% 7.17% 4 STEADVIEW CAPITAL MAURITIUS LTD. 1.26% 1.17% 0.63% 5 AXIS LONG TERM EQUITY FUND 0.87% 0.72% 0.78% 6 NEW HORIZON OPPORTUNITIES MASTER FUND 7 NEW WORLD FUND INC. Shareholding profile 8 SMALLCAP WORLD FUND INC 9 VANGUARD EMERGING MARKETS STOCK INDEX FUND 10 VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 11 SBI ETF NIFTY 50 0.80% 0.80% 0.80% 0.62% 0.62% 0.56% 0.56% 0.56% 0.91% 0.48% 0.47% 0.50% 0.46% 0.45% 0.41% 0.45% 0.40% 0.32% 12 SBI EQUITY HYBRID FUND 13 SBI LIFE INSURANCE CO. LTD. Promoters & 14 UTI EQUITY FUND Promoter Group 15 NOMURA INDIA INVESTMENT MOTHER FUND 55.17% 16 AXIS FOCUSED 25 FUND 0.43% 0.36% 0.33% 0.41% 0.41% 0.28% 0.40% 0.41% 0.32% 0.38% 0.38% 0.62% 0.37% 0.37% 0.17% 17 MOTILAL OSWAL MOST FOCUSED MULTICAP 35 FUND 18 ISHARES INDIA INDEX MAURITIUS COMPANY 19 ISHARE CORE EMERGING MARKET MAURITIUS CO 20 WASATCH ADVISORS INC 0.31% 0.31% 0.39% 0.48% 0.31% 0.35% 0.31% 0.29% 0.24% 0.28% 0.25% 0.33% 8#9Financial snapshot 58.1% 7.05% B 34.5 BAJAJ FINSERV PBT 6,179 26.2 CAGR 62% 50.6% 5.50% 20.1 16.1 47.0% 46.0% 3,843 12.9 44.8% 44.4% 44.6% 10.1 45.0% 43.1% 8.1 2,818 6.4 4.9 40.2% 3.7 2.5 2.9 1,965 41.4% 2.20% 1,357 1,091 35.3% 872 602 370 30 51 134 0.80% 0.63% 0.45% 0.44% 0.43% 0.12% 0.19% 0.28% 0.28% AUM 2,478 2,539 4,032 7,573 13,107 17,517 24,061 32,410 44,229 60,196 82,422 1,15,888 CAGR 42% FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 RoA 0.9% 1.4% 2.8% 4.4% 4.2% 4.1% 3.6% 3.3% 3.5% 3.7% 3.7% 4.2% RoE 2.0% 3.2% 8.0% 19.7% 24.0% 21.9% 19.5% 20.4% 20.9% 21.6% 20.1% 22.5% AUM PBT All figures including FY17 are as per previous GAAP, whereas for FY18 and FY19 are as per Ind AS Customer Franchise (MM) *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 are at 3 months overdue. Hence NPA across periods are not comparable NNPA * Opex to NII 9#10Product suite • Consumer SME Consumer Durable Loans Digital Product Loans (E) Lifestyle Product Loans Life care financing EM I Cards Unsecured Working Capital Loans (E) Loans to Professionals (E) Secured Enterprise Loans • EMI cards - Retail Spend Financing 2-Wheeler & 3-Wheeler Loans . Personal Loan Cross-Sell Salaried Personal Loans (E) E-Commerce Consumer Finance Retailer Finance Salaried Home Loans (E) Salaried Loan Against Property • Used-car financing BAJAJ FINANCE LIMITED B BAJAJ FINSERV • Commercial • Securities Lending • Large Value Lease Rental Discounting Auto Component Manufacturer Lending Rural Consumer Durable Loans • Digital Product Loans • • Lifestyle Product Loans Personal Loans Cross Sell Salaried Personal Loans • Financial Institutions Lending • Light Engineering • Gold Loans • Specialty Chemicals Lending Lending Loans to Professionals Deposits Retail Term Deposits Corporate Term Deposits Partnerships & Services Life Insurance Distribution General Insurance Distribution Health Insurance Distribution Co-Branded Credit Card Co-Branded Wallet Financial Fitness Report Corporate Finance Loans BAJAJ HOUSING FINANCE LIMITED Loan Against Property Developer Finance Self Employed Home Loans Lease Rental Discounting • Loan Against Property Home Loans Secured Enterprise Loans • Property search services Property Fitness Report (E) Also available through digital channels 10#11- Executive summary – Bajaj Finance Limited Consolidated Overview • 32 year old non bank with a demonstrated track record of profitable growth BAJAJ B FINSERV • · · Diversified financial services company focused on Consumer, Payments, Rural, SM E, Commercial and Mortgages Focused on mass affluent client with a strategy to cross sell Strong focus on deposits acceptance and fee product distribution Present in 927 urban locations and 903 rural locations in India with over 91,700+ distribution points • Large customer franchise of 34.48 MM with loans cross sell franchise of 20.67 M M • Consolidated AUM mix of Consumer: Rural: SME: Commercial: Mortgages stood at 39% 8% 14% 10% 29% as of 31 Mar 2019 • Consolidated AUM of 1,15,888 crore as of 31 Mar 2019 and a post tax profit of 3,995 crore in FY19 · Subsidiaries • Amongst the largest new loan acquirers in India (5.83 MM in Q4 FY19) 100% shareholding in Bajaj Housing Finance Limited. Treasury • 100% shareholding in Bajaj Financial Securities Limited Strategy is to create a balanced mix of wholesale and retail borrowings Consolidated borrowings of ₹1,01,588 crore with a mix of 37: 50: 13 between banks, money markets and deposits as of 31 Mar 2019 Credit Quality • Consolidated Gross and Net NPA as of 31 Mar 2019 stood at 1.54% and 0.63%, respectively Provisioning coverage ratio of 60% as of 31 Mar 2019 Standard assets provisioning of 85 bps (ECL stage 1 & 2) under Ind AS as against requirement of ~40 bps as per RBI and NHB 11#12Executive summary - Bajaj Finance Limited Standalone Overview • Focused on Consumer, Payments, Rural, SME and Commercial lines of businesses B BAJAJ FINSERV Strategic business unit organization design supported by horizontal com m on utility functions to drive domain expertise, scalability and operating leverage Focused on cross sell, custom er experience and product & process innovations to create a differentiated & profitable business model . AUM mix of Consumer: Rural: SM E: Commercial: Mortgage (residual) stood at 45% 9% 16% 12% 18% as of 31 Mar 2019 . AUM of 98,671 crore as of 31 Mar 2019 and a post tax profit of 3,890 crore in FY19 • Capital adequacy ratio (including Tier II capital) stood at 20.66% as of 31 Mar 2019. The Tier I capital stood at 16.27% Consumer business • Present in 927 locations with 74,400+ active distribution point of sale • Largest consumer electronics, digital products & lifestyle products lender in India Payments Rural business . • • • Financed 44% of Bajaj Auto's domestic two wheeler sales in Q4 FY19 - disbursed 268K accounts Financed 39% of Bajaj Auto's three wheeler sales in Q4 FY19 - disbursed 40K accounts Amongst the largest personal loan lenders in India EMI Card franchise crossed 18.7 MM cards in force (CIF) Bajaj Finserv - RBL Bank co-branded credit card CIF stood at 10.53 Lacs as of 31 Mar 2019 Bajaj Finserv Mobikwik app has 8.3 MM active users as at 31 Mar 2019 who have linked their EMI card to the wallet • Highly diversified lender in rural markets offering 10 loan products across consumer and professional business categories. • Operates with a unique hub and spoke business model • Geographic presence across 903 towns and villages with retail presence across 14,500+ stores 12#13Executive summary - Bajaj Finance Limited Standalone SME Business • Offers unsecured working capital loans to SME & self employed professionals Secured offerings include enterprise loans against property and financing against used car Commercial business • · . • Treasury · Credit Quality Credit Rating B BAJAJ FINSERV Focused on affluent SM Es (average sales of 10-12 crore) with established financials & demonstrated borrowing track record Dedicated SM E relationship management strategy to provide a wide range of cross sell products to SM Efranchise Offers short, medium and long term financing to mid market corporates. Offers a range of structured products collateralised 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 86,352 crore with a mix of 34: 51: 15 between banks, money markets and deposits as of 31 Mar 2019 Gross and Net NPA as of 31 Mar 2019 stood at 1.80% and 0.73%, respectively Provisioning coverage ratio of 60% as of 31 Mar 2019 Standard assets provisioning of 97 bps (ECL stage 1 & 2) under Ind AS as against requirement of 40 bps as per RBI Investment grade long term issuer credit rating of BBB-/ Stable & short term rating of A-3 by S&P Global Ratings Credit rating for Long Term Credit rating for Short Term Debt Program is AAA/Stable by CRISIL, ICRA, CARE & India Ratings Debt Program is A1+ by CRISIL, ICRA & India Ratings Credit rating for FD program is FAAA/ Stable by CRISIL & MAAA (Stable) by ICRA 13#14B BAJAJ FINSERV - Section 02 - Ind AS financial performance Q4 FY19 & FY19 14#15Consolidated key performance highlights for Q4 FY19 B BAJAJ FINSERV Customer franchise as of 31 Mar 2019 32% to 34.48 MM from 26.22 MM as of 31 Mar 2018. During the quarter, the company acquired 1.92 MM new customers New loans booked during Q4 FY19 53% to 5.83 MM from 3.80 MM in Q4 FY18 Existing customers contributed to 67% of new loans booked during Q4 FY19 versus 63% in Q4 FY18 AUM as of 31 Mar 2019 was 41% to 1,15,888 crore from 82,422 crore as of 31 Mar 2018. The Company has added receivables of 8,386 crore in Q4 FY19 Net Interest Income for Q4 FY19 50% to 3,395 crore from 2,265 crore in Q4 FY18 Operating expenses to net interest income ratio im proved to 34.6% in Q4 FY19 versus 39.5% in Q4 FY18 Loan losses and provisions for Q4 FY19 were 409 crore as against 227 crore in Q4 FY18 Profit after tax for Q4 FY19 57% to ₹1,176 crore from 748 crore in Q4 FY18 Return on Assets and Return on Equity, non annualized, for Q4 FY19 were 1.1% and 6.2% respectively Gross and Net NPA stood at 1.54% and 0.63%, respectively. The provisioning coverage ratio was 60% Standard assets provisioning of 85 bps (ECL stage 1 & 2) under Ind AS as against requirement of ~40 bps as per RBI and NHB Capital adequacy ratio (including Tier-Il capital) as of 31 March 2019 stood at 20.66%. The Tier-I capital stood at 16.27%. Deposits book 69% to 13,193 crore as of 31 Mar 2019 from 7,793 crore as of 31 Mar 2018. Deposits contributed to 13% of the consolidated borrowings 15#16Consolidated key performance highlights for FY19 B BAJAJ FINSERV Custom er franchise as of 31 Mar 2019 32% to 34.48 MM from 26.22 MM as of 31 Mar 2018. During the year, the company acquired 8.27 MM new customers • New loans booked during FY19 53% to 23.50 MM from 15.34 MM in FY18 • Existing customers contributed to 65% of new loans booked during FY19 versus 60% in FY18 • AUM as of 31 Mar 2019 was 41% to 1,15,888 crore from 82,422 crore as of 31 Mar 2018. The Company has added receivables of 33,410 crore in FY19 • Net Interest Income for FY19 ◆46% to ₹11,878 crore from ₹8,143 crore in FY18 • Operating expenses to net interest income ratio im proved to 35.3% for FY19 versus 40.2% for FY18 • Loan losses and provisions for FY19 were 1,501 crore as against ₹1,030 crore in FY18 • Profit after tax for FY19 60% to 3,995 crore from 2,496 crore in FY18 • Return on Assets and Return on Equity for FY19 were 4.2% and 22.5% respectively • Gross and Net NPA stood at 1.54% and 0.63%, respectively. The provisioning coverage ratio was 60% • Standard assets provisioning of 85 bps (ECL stage 1 & 2) under Ind AS as against requirement of ~40 bps as per RBI and NHB • Capital adequacy ratio (including Tier-Il capital) as of 31 March 2019 stood at 20.66%. The Tier-1 capital stood at 16.27%. • Deposits book 69% to 13,193 crore as of 31 Mar 2019 from 7,793 crore as of 31 Mar 2018. Deposits contributed to 13% of the consolidated borrowings The Board of Directors has recommended a dividend of ₹6 per equity share of the face value of ₹2 (300%) for FY19 (Previous year 4 per equity share of the face value of 2 i.e. 200%) 16#17Financial Statement Summary - Consolidated B BAJAJ FINSERV in crore Financials snapshot Assets under management Total income Q4 FY19 Q4 FY18 Yo Y FY19 FY18 Yo Y 1,15,888 82,422 41% 1,15,888 82,422 41% 5.308 3,492 52% 18,502 12,757 45% Interest expenses 1,913 1,227 56% 6,624 4,614 44% Net Interest Income (NII) 3,395 2,265 50% 11,878 8,143 46% Operating Expenses 1,174 894 31% 4,198 3.270 28% Impairment of financial assets (ECL stage 1 & 2)^ 34 12 183% 260 129 102% Impairment of financial assets (ECL stage 3 & write off)^ 375 215 74% 1,241 901 38% Profit before tax 1,812 1,144 58% 6,179 3,843 61% Profit after tax 1,176 748 57% 3,995 2,496 60% Ratios Q4 FY19 Q4 FY18 FY 19 FY18 Total Opex to NII 34.6% 39.5% 35.3% 40.2% Loan loss to AUM* 0.35% 0.28% 1.30% 1.25% Earning per share Basic () * - 20.4 13.0 69.3 44.4 Return on Average Assets* 1.1% 1.0% 4.2% 3.7% Return on Average Equity * 6.2% 4.8% 22.5% 20.1% ^ Read it as loan losses and provisions * Not annualized 17#18Reconciliation of consolidated profit with previous GAAP B in crore BAJAJ FINSERV Particulars Profit before tax as per previous GAAP ® Ind AS adjustments increasing / (decreasing) profit: Adoption of Effective Interest Rate (EIR) for financial assets recognised at am ortised cost. Adoption of Effective Interest Rate (EIR) for financial liabilities. recognised at am ortised cost Q4 FY19 Q4 FY18 Yo Y FY19 FY18 Yo Y 1,710 1,134 51% 6,675 4,096 63% 60 11 (422) (197) 54 (0) 107 13 Expected credit Loss (21) 37 (131) 9 Fair value of stock options as per Ind AS 102. (18) (12) (75) (45) Actuarial loss on employee defined benefit plan recognised in 'Other comprehensive income' as per Ind AS 19 16 8 16 8 Gain/ (losses) on fair valuation of financial assets at fair value through profit and loss 4 (34) 7 (41) Recognition of service asset on assignment 1 (4) Others 6 6 Net profit before tax as per Ind AS 1,812 1,144 58% 6,179 3,843 61% Tax expense (including current tax and deferred tax) (637) (397) (2,186) (1,347) Net profit after tax as per Ind AS 1,176 748 57% 3,995 2,496 60% Net profit after tax as per previous GAAP * @ 1,116 745 50% 4,347 2,674 63% @ Amounts as per previous GAAP for Q4 FY19 and FY19 are management estimates and not reviewed by auditors 18#19Section 03 - Non financial commentary B BAJAJ FINSERV 19#20Non financial commentary B BAJAJ FINSERV Bajaj Finance Limited, for its foreign currency borrowings program, received a long-term issuer credit rating of 'BBB-' with a stable outlook and a short-term issuer credit rating of 'A-3' by S&P Global Ratings in January 2019. The 'BBB-' rating is equivalent to India's sovereign rating assigned by S&P Global Ratings Bajaj Housing Finance Limited has optimized its cost metrics to build a sustainable mortgage business. The Company is on a strong grow th momentum and we are confident that it will deliver high growth along with threshold ROES over the next few years Consolidated opex to NII im proved to 34.6% in Q4 FY19 as against 39.5% in Q4 FY18, strongly aided by continued focus on expanding fee revenue pool and better cost management The Company continued to focus on granularity of the portfolio across products and geographies to reduce risk and augment profitability. It is reflected in better margin, low er operating expenses and better risk metrics in Q4 FY19 and full year FY19 Portfolio quality remained at its record best in Q4 FY19 adjusted for IL&FS exposure. With strong portfolio quality, BFL is well placed to grow its business in a robust manner The Company continued to manage its ALM well with a judicious mix of borrowings between banks, money markets and deposits and focus on long term borrowings. It continued to remain well covered on ALM to manage any impact of liquidity hardening and higher interest rates on its P&L over short to medium term period BFL's co-branded credit card with RBL Bank (SuperCard) crossed a milestone of one million cards in force in a little over two years Bajaj Finserv Mobikwik app has 8.3 MM active users as of 31 Mar 2019 Bajaj Financial Securities Limited (B Finsec) a 100% subsidiary of Bajaj Finance Limited is set to start its business. Its strategy is to offer a full product suite (broking) to Loan Against Securities (LAS) clients and grow the profit pool of LAS business 20#21Section 04 - Asset liability management B BAJAJ FINSERV 21#22- Behaviouralized ALM snapshot as on 31 March 2019 BFL in crore 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 5,524 2 2 7 10 344 510 4,181 10,580 Loan repayments 7,642 5,263 5,199 12,203 17,014 31,771 12,409 5,991 97,492 Other inflow s* 2,150 63 215 590 445 2,726 544 1,136 7,868 Total Inflows (A) 15,316 5,328 5,416 12,800 17,469 34,840 13,462 11,308 1,15,940 Cumulative Total Inflows (B) 15,316 20,644 26,060 38,860 56,330 91,170 1,04,632 1,15,940 Borrowings 5,361 430 2,345 3,638 10,045 27,182 14,616 11,422 75,039 Other Outflows* 4,752 463 2,059 2,619 4,179 4,690 1,122 469 20,354 Capital and Reserves and Surplus 20,547 20,547 Total Outflows (C) 10,113 893 4,404 6,257 14,225 31,872 15,738 32,438 1,15,940 Cumulative Total Outflows (D) 10,113 11,006 15,410 21,667 35,892 67,765 83,502 1,15,940 E. Mismatch (A-C) 5,203 4,435 1,013 6,543 3,244 2,968 (2,276) (21,130) F. Cumulative mismatch (B-D) Cumulative Gap as a % (F/D) 5,203 9,638 10,650 17,193 20,437 23,406 21,130 0 51% 88% 69% 79% 57% 35% 25% 0% Permissible cumulative GAP % Additional borrowings possible -15% -15% 7,904 30,369 * Other inflows include fixed assets, tax paid in advance, interest and income receivable, line of credit committed by other institutions *Other outflows include deposits, CBLO, sundry creditors, interest payable on bonds/ deposits, loan commitments pending disbursal, lines of credit committed to other institutions As per previous GAAP 22#23Disciplined ALM Management over the last 8 years 36% 38% 36% 16% Cumulative gap upto 1m Cumulative gap upto 12m Permissible Limit 141% 119% 120% 106% 71% 48% 61% 50% 44% 96% 83% 57% 64% 55% 51% 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 Sep '18 Dec '18 Mar '19 23#24Liability mix over the last 8 years 5% 5% 8% 8% 9% 8% 10% 11% 12% 13% 4% 3% 3% 4% 6% 7% 5% 5% 3% LO 31% 33% 35% 25% 38% 38% 35% 43% 36% 40% 34% 34% 58% 54% 48% 32% 58% 31% 53% 35% 15% 12% 14% 15% 8% 0% 0% Mar'12 Mar'13 1% Mar'14 4% Mar'15 6% Mar'16 Mar'17 Mar'18 ■Deposits ■Bank Loans (incl. CC/OD/W CDL) NCD Subordinate Debt Sep '18 Short term borrowings Dec' 18 Mar'19 * Standalone borrowing mix 24#25Conservative leverage standards 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 6.8 24.7% 6.6 6.4 22.0% 6.2 6.3 6.3 22.1% 6.2 20.3% 20.7% 5.3 19.1% 19.5% 19.7% 5.9 21.4% 18.0% 17.5% 17.2% 18.7% 16.2% 16.1% 5.2 16.8% 16.3% 15.0% 14.6% 14.2% 5.7% 5.0% 4.9% 4.6% 4.4% 3.8% 3.3% 3.4% 3.0% 2.5% Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Sep '18 Dec '18 Mar '19 -Capital Adequacy Tier 1 Capital Adequacy Tier 2 -Total Capital Adequacy * Standalone leverage is approximately 5.5X -Leverage Ratio Leverage Threshold denotes point when the Company initiated its capital raising plan. 25#26Key takeaways on liquidity The Company and its housing finance subsidiary (BHFL) have continued to maintain a strong ALM profile as of 31 Mar 2019 The Company continued to maintain strong liquidity profile: • The total consolidated liquidity buffer (free cash and cash equivalents) was at ₹6,612 crore as of 31 Mar 2019 The liquidity buffer (free cash and cash equivalents) as of 31 Mar 2019 was 4,857 crore in BFL and 1,755 crore in BHFL The Company also has undrawn CC/ OD and bank lines of ₹3,003 crore in BFL and 635 crore in BHFL Deposits franchise continued to grow in a healthy manner. The consolidated deposits contribution was at 13% of total liability mix as of 31 Mar 2019. The Company is confident of growing deposits contribution to 18-20% by Mar 2020. The Company continued to get access to funding from money markets, banks, retail and corporate depositors despite the continued challenges faced by the NBFC and HFC sector in Q4 FY19 Total funds raised by BFL and BHFL through money market and term loans were ₹21,299 crore • BFL raised 10,671 crore from money market and ₹ 4,700 crore through term loans from banks in Q4 FY19 BHFL raised 4,528 crore from money market and 1,400 crore from bank loans in Q4 FY19 26#27Resilient business model 47.0% 46.0% 44.6% 45.0% 43.1% 41.4% 41.8% * 38.7% 38.4% 38.6% 37.9% 36.0% 32.9% 33.3% 36.4% 35.9% 35.3% 29.9% 28.4% 26.4% 9.7% 9.9% 9.9% 9.1% 9.5% 9.0% 8.2% 8.2% 8.2% 8.3% 4.2% 4.1% 3.6% 3.3% 3.5% 3.7% 3.9% 4.0% 4.0% 4.1% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% @ Mar'12 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Sep 18 Dec'18 Mar '19 COF Fee Income to PBT -Operating Leverage Benchmark ROA -ROA Fee Income includes Service and Admin charges, Penal Income, Foreclosure Income and Misc charges and receipts @ Sep '18, Dec'18 & Mar '19 numbers are as per Ind AS for H1 FY19, 9M FY19 & FY19 respectively 27#28Section 05 - Customer franchise and distribution reach B BAJAJ FINSERV 28#29Customer franchise Q4 FY18 26.22 MM 19.77 MM Total Franchise Credit segment filter B BAJAJ FINSERV Q4 FY19 Q3 FY19 34.48 MM 32.57 MM 26.93 MM 18.88 MM Overall Cross sell franchise 25.89 MM 25.30 MM 24.29 MM 17.22 MM Non delinquent customers 23.26 MM 22.07 MM Cross sell franchise 15.43 MM 20.67 MM 19.69 MM Addition of 0.98 MM Cross sell franchise in Q4 New to Bajaj Finance Customers Q4 FY18 14,11,324 Q1 FY19 20,71,054 Q2 FY19 17,69,841 Q3 FY19 25,14,930 Q4 FY19 19,17,490 Growing customer cross sell franchise by 25-30% every year... 29#30Geographic presence Map not to scale BAJAJ B FINSERV 31 Mar 31 Mar 31 Mar 31 Mar 31 Mar Geographic Presence 2015 2016 2017 2018 2019 Urban 161 262 377 730 927 Rural 232 397 538 602 903 Of which Rural Lending branches 50 105 177 219 347 Of which Rural Lending franchisees 182 292 361 383 556 Total Bajaj Finance presence 393 659 915 1.332 1,830 30 0#31Strong distribution reach B BAJAJ FINSERV Active distribution - point of sale 31 Mar 2015 31 Mar 2016 31 Mar 2017 31 Mar 2018 31 Mar 2019 Consumer durable stores - Urban 7,000+ 9,400 + 14,000+ 15,500+ 20,400+ Consumer durable stores - Rural 1,500+ 3,200+ 5,500+ 8,200+ 14,500+ Digital product stores 2,650+ 5,200+ 5,900+ 15,900+ 22,500+ Lifestyle retail stores 1,150+ 3,200+ 3,900+ 6,000+ 7,700+ EMI card - retail spends stores 5,600+ 12,100+ 19.100+ Bajaj Auto dealers, sub-dealerships and ASSC 3.000+ 3,000+ 3,200+ 3,900+ 4,600+ Direct Sales Agents 700+ 800+ 1,500+ 2,100+ 2,800+ Overall active distribution network 16,000+ 24,800+ 39,600 + 64,300+ 91,700+ Fixed deposit independent financial advisors 90+ 300+ 560+ 1,000+ 2,300+ 31#32Section 06 - Business segment wise AUM B BAJAJ FINSERV 32#33Business segment wise AUM as of 31 March 2019 B BAJAJ FINSERV Assets Under Management Standalone as of 31 Mar 2019 BHFL as of 31 Mar 2019 Consolidated as of 31 Mar 2019 Consolidated as of 31 Mar 2018 Growth crore Composition as of 31 Mar 2019 Consumer B2B -Auto Finance Business 9,726 9,726 6,291 55% 8% Consumer B2B - Sales Finance Businesses 12,261 12,261 9,253 33% 11% Consumer B2C Businesses 22,551 451 23,002 15,402 49% 20% Rural B2B Business 2,142 2,142 1,281 67% 2% Rural B2C Business 7,101 7,101 4,177 70% 6% SME Business 15,678 81 15,759 11,434 38% 14% Securities Lending Business 6,359 6,359 6,790 (6%) 5% Commercial Lending Business 5,668 5,667 4.151 37% 5% Mortgages 17,185 17,030 33,871 23,643 43% 29% Total 98,671 17,562 1.15.888 82,422 41% 100% Credit Card - CIF 1053 K 382 K 176% EMI Card - CIF 18.7 MM 12.9 MM 45% Wallets 8.3 MM 1.3 MM 33 3#34Section 07 – Bajaj Housing Finance Limited Overview B BAJAJ FINSERV 34#35Executive summary - Bajaj Housing Finance Limited Bajaj Housing Finance Limited Home Loans Loan Against Property Lease Rental Discounting B BAJAJ FINSERV Bajaj Housing Finance Limited is 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. Also offers inventory finance and construction finance to developers. Focused on mass affluent and above customer (salaried and self employed) AUM of 17,562 crore as of 31 March 2019 and a post tax profit of 110 crore for FY19 • Capital adequacy ratio of BHFL (including Tier II capital) stood at 25.81% • Offers home loan with an average ticket size of approximately 37 lakhs. Focused on developing the B2B business in home loans by leveraging existing developer finance relationships and through tie- ups with new project launches Currently present across top 44 locations in India Offers loans to mass affluent and above self employed customers with an average ticket size of approximately 27 lakhs • Strategy is to sell LAP product to existing customers only via direct to customer channel Currently present across top 30 locations in India • Offers loan against lease rentals on commercial property to high net worth individuals and developers . All LRD transactions are backed by rentals through escrow mechanism Ticket size of lease rental discounting ranges from 5 - 100 crore with an average ticket size of approximately 20 crore Currently present across top 8 locations in India (Mumbai, Delhi, Bangalore, Pune, Ahmedabad, Chennai, Kolkata, Hyderabad) 35#36Executive summary - Bajaj Housing Finance Limited BAJAJ B FINSERV Developer Finance • 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, Surat) Credit Quality Gross and Net NPA as of 31 Mar 2019 stood at 0.05% and 0.04%, respectively Treasury Strategy is to create a balanced and sustained mix of borrowings Borrowings stood at 15,236 crore with a mix of 50 50 between banks and money markets as of 31 Mar 2019 Credit Rating . Credit rating for Long Term Debt Program is AAA/Stable by CRISIL & Ind AAA/ Stable by India Ratings • Credit rating for Short Term Debt Program is A1+ by CRISIL & Ind A1+ by India Rating 36#37Portfolio composition - Bajaj Housing Finance Limited LAP LRD Product Category 1,705, 10% 2,719, 16% DF Others 705. 532 4% 3% Home Loan Portfolio Customer Categorisation Self-Employed 1,785, 15% OO Home Loan 11,901, 68% Salaried 10,116, 85% B BAJAJ FINSERV As of 31 Mar 2019 in Crore Salaried focused Home Loans acquisition strategy (92% of Q4 acquisition) 37#38BAJAJ B FINSERV Customer profile - Bajaj Housing Finance Limited Home loan Average loan size - Overall 37 lakhs Average loan size – Urban - 38 lakhs Average loan size – Rural - 17 lakhs 69% Loan Against Property 27 lakhs 44 lakhs 11 lakhs 49% LTV (at origination) Average loan term - overall Average customer age Primary security Repayment type 18 years 11 years 40 years 42 years Mortgage of property financed Mortgage of property Monthly amortizing Monthly amortizing 38#39Financial statement summary - Bajaj Housing Finance Limited in crore Financials snapshot Assets under management Total Interest & fee income Q4 FY19 Q4 FY18 FY19 FY18 17,562 3,570 17,562 3,570 431 66 1,156 106 Interest expenses Net Interest Income (NII) Operating Expenses Impairment of financial assets (ECL stage 1 & 2)^ 269 34 685 47 162 32 471 59 68 25 297 44 CO 6 3 21 4 Impairment of financial assets (ECL stage 3 & write off)^ 2 4 Profit before tax 86 4 149 11 Profit after tax 62 4 110 10 Ratios Total Opex to NII Loan loss to AUM* Return on Average Assets* Return on Average Equity* Q4 FY19 Q4 FY18 FY19 FY18 42.0% 78.1% 63.1% 74.6% 0.0% 0.1% 0.1% 0.1% 0.4% 0.1% 1.1% 0.6% 2.0% 0.4% 4.2% 1.1% Λ ^ Read it as loan losses and provisions * Not annualized B BAJAJ FINSERV 39#40ECL summary - Bajaj Housing Finance Limited ECL categorization Stage 1 & 2 Stage 3 Jun '18 100.00% Sep '18 99.98% Dec '18 Mar'19 99.97% 99.95% 0.00% 0.02% 0.03% 0.05% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Jun '18 Sep '18 Dec '18 Mar'19 Gross stage 1 & 2 assets 7.260 10,701 14.004 17,363 Impairment allowance stage 1 & 2 10 14 20 26 Net stage 1 & 2 assets 7,250 10,687 13,984 17,337 Coverage ratio stage 1 & 2 assets 0.14% 0.13% 0.14% 0.15% Gross stage 3 assets 0.25 2.15 4.03 9.49 Impairment allowance stage 3 0.1 0.5 1.0 3.4 Net stage 3 assets 0.2 1.6 3.0 6.1 Coverage ratio stage 3 assets 33% 24% 26% 35% Overall coverage ratio 0.14% 0.14% 0.15% 0.17% B BAJAJ FINSERV 40#41Behaviouralized ALM snapshot as on 31 March 2019 - BHFL in crore Particulars 1 m >1 to 2 m >2 to 3 m >3 to 6m >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 1,861 1,861 Loan Repayments 284 198 196 575 1,111 3,912 2,703 1,999 2,269 4,182 17,430 Trade Receivable & Others* 2,017 0 9 22 38 2,086 Total Inflows (A) 4,162 198 196 584 1,111 3,935 2,703 1,999 2,269 4,220 21,377 Cumulative Total Inflows (B) 4,162 4,360 4,556 5,140 6,251 10,186 12,889 14,888 17,157 21,377 Borrowings repayment 2,042 1,285 154 33 1,067 6,044 4,475 535 15,637 Other Outflows* 324 44 14 8 1,612 12 0 76 2,089 Capital Reserves and Surplus 3,652 3,652 Total Outflows (C) 2,367 1,285 198 47 1,075 7,656 4,487 535 3,727 21,377 Cumulative Total Outflows (D) 2,367 3,652 3,850 3,897 4,972 12,628 17,115 17,650 17,650 21,377 E. GAP (A - C) 1,795 (1,087) (2) 537 36 (3,721) (1,784) 1,464 2,269 493 F. Cumulative GAP (B-D) 1,795 708 706 1,243 1,279 (2,442) (4,227) (2,762) (493) 0 Cumulative GAP as % (F/D) 76% 19% 18% 32% 26% (19%) (25%) (16%) (3%) 0% Permissible cumulative GAP % -15% Additional borrowings possible 2,526 -15% 2,381 *Other inflows include fixed assets, tax paid in advance, interest and income receivable, line of credit committed by other institutions *Other outflows include CBLO, sundry creditors, interest payable on bonds / deposits, loan commitments pending disbursal, lines of credit committed to other institutions As per previous GAAP 41#42Section 08 - Update on credit quality B BAJAJ FINSERV 42#43Credit quality - Portfolio composition Consumer durable 1st Bucket Two & three wheeler BAJAJ B FINSERV 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1st Bucket ■ 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket ■5+ Bucket Bkt 0 97.83% 98.38% 98.58% 98.83% 98.91% 99.04% 98.91% 98.96% 98.69% Bkt 0 85.67% 85.88% 85.82% 87.85% 88.76% 87.60% 88.32% 89.68% 90.15% 30+ 30+ 1.35% 0.95% 0.83% 0.69% 0.65% 0.53% 0.62% 0.59% 0.75% 6.84% 6.98% 7.14% 6.21% 5.55% 5.96% 5.68% 5.04% 4.65% 2.50% 16.00% 14.00% 2.00% 12.00% 1.50% 10.00% 8.00% 1.00% 6.00% 4.00% 0.50% 2.00% 0.00% T 0.00% Mar'17 Jun '17 Sep '17 Dec 17 Mar'18 Jun '18 Sep '18 Dec'18 Mar'19 Mar'17 Jun '17 Sep '17 Dec'17 Mar'18 Jun '18 Sep '18 Dec' 18 Mar'19 Lifestyle 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Digital product 1st Bucket ■ 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Bkt 0 97.32% 97.32% 98.35% 98.63% 98.66% 98.59% 98.73% 98.77% 98.49% 30+ 1.70% 1.71% 0.94% 0.75% 0.77% 0.80% 0.67% 0.59% 0.79% 3.00% Bkt 0 30+ 3.00% 97.27% 97.87% 98.68% 98.86% 98.49% 98.47% 98.72% 98.81% 98.30% 1.72% 1.30% 0.74% 0.60% 0.88% 0.89% 0.74% 0.70% 1.01% 2.50% 2.50% 2.00% 2.00% 1.50% 1.50% 1.00% 1.00% 0.50% 0.50% 0.00% 0.00% Mar'17 Jun '17 Sep '17 Dec 17 Mar'18 Jun '18 Sep '18 Dec' 18 Mar'19 Mar'17 Jun '17 Sep '17 Dec 17 Mar'18 Jun '18 Sep '18 Dec'18 Mar'19 43#44Portfolio Credit quality - Including BHFL Personal loans cross sell 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 15th Bucket BAJAJ B FINSERV Salaried personal loans 1st Bucket ■ 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Bkt 0 30+ 97.29% 97.18% 97.26% 97.46% 97.62% 97.64% 97.69% 97.81% 97.76% Bkt 0 30+ 99.52% 99.50% 99.57% 99.63% 99.70% 99.66% 99.68% 99.70% 99.70% 1.38% 1.50% 1.45% 1.36% 1.27% 1.26% 1.22% 1.20% 1.22% 0.31% 0.37% 0.30% 0.27% 0.22% 0.22% 0.24% 0.23% 0.22% 0.60% 3.00% 0.50% 2.50% 0.40% 2.00% 0.30% 1.50% 1.00% 0.20% 0.50% 0.10% 0.00% 0.00% Mar'17 Jun '17 Sep 17 Dec'17 Mar'18 Jun '18 Sep 18 Dec'18 Mar'19 Mar'17 Jun '17 Sep 17 Dec'17 Mar'18 Jun '18 Sep '18 Dec 18 Mar'19 Business & professional Loan against property* 1st Bucket 2nd Bucket 3rd Bucket ■4th Bucket 15th Bucket 1st Bucket ■ 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket Bkt 0 98.68% 98.51% 98.60% 98.55% 98.68% 98.76% 98.76% 98.82% 98.75% 30+ 0.92% 1.03% 0.94% 0.98% 0.95% 0.84% 0.85% 0.83% 0.86% 1.60% Bkt 0 30+ 3.00% 99.24% 99.07% 98.55% 98.27% 99.16% 99.27% 99.16% 96.95% 97.65% 0.72% 0.88% 1.41% 1.57% 0.80% 0.66% 0.81% 2.97% 2.25% 1.40% 2.50% 1.20% 1.00% 2.00% 0.80% 1.50% 0.60% 1.00% 0.40% 0.50% 0.20% .! 0.00% 0.00% Mar'17 Jun '17 Sep '17 Dec'17 Mar'18 Jun '18 Sep '18 Dec' 18 Mar'19 Mar'17 Jun '17 Sep 17 Dec 17 Mar'18 *Adjusted for IL&FS, Mar '19 current portfolio is 99.32% Jun '18 Sep '18 Dec'18 Mar'19 44#45Portfolio Credit quality - Including BHFL Home loans B BAJAJ FINSERV Rural Lending B2B 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 15+ Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Bkt 0 99.02% 98.91% 98.82% 98.96% 99.48% 99.49% 99.40% 99.54% 99.52% Bkt 0 99.11% 99.25% 99.49% 99.56% 99.46% 99.49% 99.44% 99.54% 99.26% 30+ 0.90% 0.92% 0.93% 0.80% 0.21% 0.47% 0.43% 0.32% 0.41% 30+ 0.68% 0.55% 0.38% 0.30% 0.38% 0.37% 0.38% 0.32% 0.50% 1.00% 1.40% 1.20% 0.80% 1.00% 0.60% 0.80% 0.60% 0.40% 0.40% 0.20% 0.20% 0.00% 0.00% Mar'17 Jun '17 Sep 17 Dec 17 Mar'18 Jun '18 Sep '18 Dec'18 Mar'19 Mar'17 Jun '17 Sep '17 Dec'17 Mar'18 Jun '18 Sep '18 Dec 18 Mar'19 Rural lending B2C 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Bkt 0 99.15% 98.98% 98.73% 98.73% 98.79% 98.72% 98.54% 98.80% 98.85% 30+ 0.58% 0.65% 0.74% 0.83% 0.69% 0.72% 0.85% 0.86% 0.82% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Mar'17 Jun '17 Sep '17 Dec'17 Mar'18 Jun '18 Sep '18 Dec 18 Mar'19 Commercial lending business portfolio is 100% current except one NPA infra account of 36 crore, of which 20 crore has been provided for. Securities lending portfolio is 100% current 45#46Credit quality - provisioning coverage B BAJAJ FINSERV Values in Cr 31 Mar 19 31 Mar 18 31 Mar 19 31 Mar 18 Assets Under Management Consolidated AUM 31 Mar 19 PCR GNPA NNPA GNPA GNPA NNPA NNPA (%) (%) (%) (%) (%) Consumer B2B -Auto Finance Business 9,726 529 206 61% 5.12% 5.70% 2.06% 2.25% Consumer B2B - Sales Finance Businesses 12,261 158 39 75% 1.05% 1.22% 0.26% 0.28% Consumer B2C Businesses 23,002 330 88 73% 1.40% 1.69% 0.38% 0.42% Rural B2B Business 2,142 22 8 61% 0.93% 0.87% 0.36% 0.52% Rural B2C Business 7,101 112 44 61% 1.53% 1.24% 0.61% 0.59% SME Business 15,759 237 50 79% 1.49% 1.85% 0.32% 0.38% Securities Lending Business 6,359 י Commercial Lending Business 5,667 36 16 55% 0.64% 0.29% Mortgages* 33,871 380 275 28% 1.23% 0.46% 0.89% 0.17% Total 1,15,888 1,804 727 60% 1.54% 1.41% 0.63% 0.43% Total (Net of IL&FS Exposure) 1,15,888 1,569 548 65% 1.34% 1.41% 0.47% 0.43% *Mortgages include IL&FS 46#47NPA movement - consolidated BAJAJ B FINSERV Values in Cr Particulars Mar'18* Jun'18 Sep'18 Dec'18 Mar'19 Assets Under Management 82,422 91,287 98,013 1,07,508 1,15,888 Opening GNPA (A) 1,254 1,164 1,280 1,471 1,691 Roll Forward into NPA (i) 298 378 480 702 593 Restructuring (ii) 4 1 3 13 14 Total Slippages (B = i + ii) 302 379 483 715 607 Roll back to standard (iii) 140 117 141 177 204 Realisation on sale of NPA receivables (iv) 64 33 19 Write offs (v) 188 146 150 285 270 Total recoveries and write-offs (C = iii + iv + v) 392 263 291 495 494 Net slippages (B - C) (90) 116 191 220 113 Gross NPA (A + B - C) 1,164 1.280 1,471 1,691 1,804 GNPA % 1.41% 1.39% 1.49% 1.55% 1.54% NNPA % * 0.43% 0.44% 0.53% 0.62% 0.63% PCR % 70% 69% 65% 60% 60% *March'18 numbers are recast as per Ind AS 47#48ECL summary - consolidated Assets categorization Stage 1 & 2 Stage 3 BAJAJ B FINSERV Mar '18 Jun '18 Sep '18 Dec '18 Mar '19 98.59% 1.41% 98.61% 98.51% 98.45% 98.46% 1.39% 1.49% 1.55% 1.54% Summary of stage wise assets and provision for impairment allowance Assets and impairment allowance Mar'18 Jun '18 Sep '18 Dec '18 Mar'19 Gross stage 1 & 2 assets 81,317 90,639 97,366 1,07,148 1,15,347 Impairment allowance stage 1 & 2 721 815 871 947 981 Net stage 1 & 2 assets 80,596 89,824 96,495 1,06,201 1,14.367 Coverage ratio stage 1 & 2 assets 0.89% 0.90% 0.89% 0.88% 0.85% Gross stage 3 assets 1,160 1,276 1,467 1,686 1,799 Impairment allowance stage 3 810 880 950 1,020 1,077 Net stage 3 assets 350 396 517 666 722 Coverage ratio stage 3 assets 70% 69% 65% 61% 60% Overall coverage ratio 1.86% 1.84% 1.84% 1.81% 1.76% 48#49B BAJAJ FINSERV Section 09 - Leverage risk assessment of unsecured portfolios 49#50Leverage risk methodology B BAJAJ FINSERV Methodology used to calculate leverage risk of unsecured portfolios (Personal loan cross sell, Salaried personal loans, Business loans, Professional loans, Rural lending unsecured loans) X axis represents the vintage of portfolio basis quarter of origination. For example, loans sourced in Q4 FY17 has 0 month (OM) vintage in Q4 FY17 and 24 months (24M) vintage in Q4 FY19 Y axis represents the percentage growth in average outstanding unsecured exposure (on-us and off-us) of customers through the vintage period (OM to 24M). Vintage lines within the graph represent the average outstanding unsecured exposure of BFL customers (on-us and off-us) baselined to 100 in the quarter of origination. For example, for salaried personal loans portfolio, all loans sourced by BFL in Q4 FY17, customer's average unsecured outstanding exposure has been calculated on-us and off- us and is based to 100 for 'OM' vintage. Vintage line represents movement of average unsecured outstanding exposure over a period of 24M. To illustrate, average outstanding exposure of salaried personal loan customers originated in Q4 FY17 has grown by 5% in '12M' and 12% in '24M' as shown in second graph. Nominal GDP growth is at ~11.5%. Hence, if the average unsecured exposure on-us and off-us has grown by ~12% in '12M' & ~25% in '24M', then we consider the leverage is in line For all the portfolios the average unsecured exposure has grown in line and is range bound for all the vintages except for Q4 FY17 vintage for business loans. For personal loan cross sell customers, average outstanding unsecured exposure for Q4 FY17 has grown by 6% in 24 months For salaried personal loan customers, average outstanding unsecured exposure for Q4 FY17 has grown by 12% in 24 months For business loan customers, average outstanding unsecured exposure for Q4 FY17 has grown by 18% in 24 months For professional loan customers, average outstanding unsecured exposure for Q4 FY17 has grown by 30% in 24 months For rural unsecured loan customers, average outstanding unsecured exposure for Q4 FY17 has remained flat 50 0#51Leverage risk assessment of unsecured portfolios Personal loans cross sell Salaried personal loans B BAJAJ FINSERV 110% 106% 102% 115% 111% 106% 102% 98% 97% 94% 93% 90% 88% OM 3M 6 M 9 M 12M 15M 18 M 21M 24M OM 3M 6 M 9 M 12 M 15M 18 M 21M 24M Business loans Professional loans 140% 130% 130% 120% 120% 110% 110% 100% 100% 90% 90% 80% 80% OM 3M 6 M 9 M 12M 15 M 18 M 21M 24M OM 3M 6 M 9 M 12M 15M 18 M 21M 24M -Q4FY17 —Q1FY18 Q2FY18 -Q3FY18 -Q4FY18 -Q1FY19 Q2FY19 -Q3FY19 -Q4FY19 51#52Leverage risk assessment of unsecured portfolios B BAJAJ FINSERV Rural lending unsecured 106% 102% 98% 94% 90% OM 3M 6 M 9 M 12M 15M 18 M 21M 24M -Q4FY17 -Q1FY18 -Q2FY18 -Q3FY18 -Q4FY18 Q1FY19 Q2FY19 -Q3FY19 -Q4FY19 52#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. 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 com es should inform themselves 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#54BAJAJ FINANCE LIMITED Q4 FY19 Investor Presentation Thank You BAJAJ B FINSERV#55Annexures B BAJAJ FINSERV 55#56ALM strategy (standalone) Borrowings - Mar '19 ( 86,352 Crs) 6,355, 11% 415, 1% 56,330 13,193, 15% 4,139, 5% 32,694, 38% Banks ■ NCD s Subordinate Debt 29,556, 34% Deposits ■CPs CBLO Behaviourilised ALM (Crs) - Mar '19 Liabilities Assets 35,892 34,840 31,872 56,418 Borrowings-Dec '18 (80,862 Crs) 740 1% 9,295, 11% 11,489, 14% 4,057, 5% 29,178, 36% B BAJAJ FINSERV Banks NCD S Subordinate Debt 26,103 32% Deposits ■CPs ■ CBLO Behaviourilised ALM (Crs) - Dec '18 Liabilities Assets 36,397 32,438 32,867 29,750 15,738 13,462 11,308 30,915 12,636 0,884 9,529 <= 1 year 1-3 years 3-5 years >5 years 3-5 years >5 years <= 1 year 1-3 years#57Financial snapshot BAJAJ B FINSERV in Crores Financials snapshot FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18° (Consol.) FY19° Yo Y CAGR (Consol.) (FY18-FY19) (12 yrs) Assets under management 2,478 2,539 4.032 7,573 13,107 17,517 24,061 Income from operations 503 599 916 1,406 2,172 3,110 4,073 Interest expenses 170 164 201 371 746 1,206 1,573 5,418 2,248 32,410 44,229 7,333 60,196 82,422 1,15,888 41% 42% 9,989 12,757 18,502 45% 39% 2,927 3,803 4,614 6,624 44% 40% Net Interest Income (NII) 332 435 715 1,035 1,426 1,904 2,500 3,170 4,406 6,186 8,143 11,878 46% 38% Operating Expenses 193 220 320 460 670 850 1,151 1,428 1,898 2,564 3,270 4,198 28% 32% Loan Losses & Provision 109 164 261 205 154 182 258 385 543 804 1,030 1,501 46% 27% Profit before tax 30 51 134 370 602 872 1,091 1,357 1,965 2,818 3,843 Profit after tax 21 34 89 247 406 591 719 898 1,279 1,837 6,179 61% 2,496 3,995 60% 62% 61% Ratios FY08 FY09 FY10 FY11 FY 12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Opex to NII 58.1% 50.6% 44.8% 44.4% 47.0% 44.6% 46.0% 45.0% 43.1% 41.4% 40.2% 35.3% Return on assets 0.9% 1.4% 2.8% 4.4% 4.2% 4.1% 3.6% 3.3% 3.5% 3.7% 3.7% 4.2% Return on equity 2.0% 3.2% 8.0% 19.7% 24.0% 21.9% 19.5% Net NPA * 7.05% 5.50% 2.20% 0.80% 0.12% 0.19% 0.28% 20.4% 0.45% NPA provisioning coverage 29% 32% 55% 79% 89% 83% 76% 71% 20.9% 21.6% 20.1% 22.5% 0.28% 0.44% 0.43% 0.63% 77% 74% 70% 60% @ All figures till including FY17 are as per previous GAAP, whereas for FY18 and FY19 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 57#58Glossary 2W Two Wheeler IFA Independent Financial Advisor 3W Three Wheeler IRR Internal Rate of Return A CM F Auto Components Manufacturer Financing LAP Loan Against Property ALM Asset & Liability Management LAS Loan Against Securities AR Assets Receivable MF ARU Activation, Retention & Usage MM Mutual Fund Million A SC Authorized Service Centers M SM E Micro, Small & Medium Enterprise AUF Assets Under Finance NII Net Interest Income AUM Assets Under Management NNPA Net Non Performing Assets B2B Business to Business NTB New to Bajaj Finance B2C Business to Customer Opex Operating Expenses BHFL Bajaj Housing Finance Ltd. PAT Profit After Tax BL Business Loan PBT Profit Before Tax CA GR Compounded Annual Growth Rate POS Point of Sale CIF Cards in Force PPC Products Per Customer CPI Consumer Price Index RBI Reserve Bank of India ECL Expected Credit Loss ROA Return on Assets EM I Existing Member Identification ROE Return on Equity EPS Earnings Per Share SE Self Employed FIG Financial Institutions Group SME Small & Medium Enterprise FII Foreign Institutional Investor TAT FPI Foreign Portfolio Investment TTD GNPA Gross Non Performing Assets WPI Turn Around Time Through the Door Wholesale Price Index H HL Home Loan B BAJAJ FINSERV 58