BFL Loan Loss Provision and Operating Expenses

BFL's - Summary of COVID-19 ВАЈАЈ B FINSERV ☐ It was a muted quarter impacted by severe second wave of pandemic. Both businesses & debt management efficiencies were affected due to strict lockdowns in majority of the states Second wave caused a marginal increase in EMI bounce rate in Q1 FY22 over Q4 FY21. Average EMI bounce rate in Q1 FY22 were approximately 1.08X of Q4 FY21; The bounce rate for July 2021 has improved to 0.96X of Q4 FY21 Cost of Funds for Q1 FY22 was 7.11% vs 7.39% in Q4 FY21. Company's liquidity buffer was Rs. 108,572 Mn (represents 8% of total borrowing) as of 30 June 2021 vs Rs. 164,855 Mn as of 31 March 2021 Company follows Expected Credit Loss (ECL) methodology of provisioning and has to provide for expected losses over the tenor of the loans; accordingly accounted for higher credit cost in Q1 FY22 ◉ Wave 2 resulted in subdued debt management efficiencies leading to higher stage 2 & 3 assets GNPA for the quarter increased by Rs. 2,006 crore from Rs. 2,731 crore as of 31 March 2021 to Rs. 4,737 crore as of 30 June 2021; Auto Finance Business was worst affected NNPA as of 30 June 2021 was Rs. 2,307 crore vs Rs. 1,136 crore as of March 2021 ☐ As per current estimates, the company expects credit costs for FY2022 to be in the range of Rs. 4,200 crore to Rs. 4,300 crore (FY21 credit cost was Rs. 5,969 crore) ☐ Planned business transformation is on track for phase 1 go live in late Q2/Q3 FY22 14

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