Executive Summary Q3 FY21

Executive 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

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