Bajaj Finserv Limited · NSE:BAJAJFINSV
Bajaj Finserv — Investor Presentation (August 2009)
40 slides from Bajaj Finserv's investor presentation, August 2009
Slide 1: Bajaj FinServ Limited
SAJAS Bajaj FinServ Limited
Slide 2: Bajaj Finserv Ltd.
Bajaj FinServ Limited Bajaj FinServ Ltd. 74%(1) 74%(2) 42% Bajaj Allianz Life Bajaj Allianz Bajaj Auto Others(3) Insurance General Insurance Finance plus planned (BALIC) (BAGIC) (BAFL) investments Business: Life Insurance General Insurance Auto and Consumer Investments, Windmills, (property, motor,
Slide 3: Demerger process
Demerger process Current Shareholders 100% Current Bajaj Holdings and Current Shareholders Investment Limited Shareholders Investments & Cash 70% 30% 30% 70% Bajaj Auto Limited Bajaj Finserv Limited Auto Business Cash Cash Wind-farm Project Rs. Rs. 15 bln 8 bln Insurance Businesses Consumer Finance
Slide 4: Rationale for de-merger
Bajaj FinServ Limited Rationale for de-merger Greater management focus on : Auto business Financial Services Investment Company Enable investors to hold focused stocks and participate in pure play auto and / or financial services More transparent benchmarking with peers in their respective industrie
Slide 5: Executive Summary
Executive Summary Bajaj FinServ Limited One of the leading financial services business in India with a focus on: • Life and General Insurance • Consumer Finance • Asset Management and Financial Product Distribution planned Only listed financial services company with pure play private sector insuranc
Slide 6: Bajaj Finserv Limited – Results Highlights
Bajaj Finserv Limited – Results Highlights Bajaj FinServ Limited Quarter ended Quarter ended FY (Rs in million) 30.06.2009 30.06.2008 2008-09 Revenue: General Insurance 4903 4434 21419 Life Insurance 67708 4809 75941 Insurance (subtotal) 72611 9243 97360 Investment & Others 321 157 948 Windmill 106
Slide 7: Bajaj Allianz Life Insurance Co.
Bajaj FinServ Limited Bajaj Allianz Life Insurance Co. 7
Slide 8: Indian Life Insurance Industry Overview
Indian Life Insurance Industry Overview Bajaj FinServ Limited Opportunities • One of the lowest life insurance penetration levels in the world – 4.7% of GDP – Insurance per capita of US$47 • Low penetration of life insurance, pension and provident funds – 26% of gross household financial assets – Ba
Slide 9: Life insurance market
Life insurance market Bajaj FinServ Limited (Rs in billion) 600 564 550 525 500 450 430 293 400 Market CAGR = 30% 309 350 Pvt. Life Insurers CAGR = 71% 159 APE (INR Bn) 300 250 220 YoY 31% YoY (7)% 200 165 78 141 150 44 YoY 95% 271 216 21 271 YoY 17% YoY 34% 100 120 142 50 121 - 2003/04 2004/05 2005
Slide 10: Indian Life Insurance Industry Overview – Challenges
Indian Life Insurance Industry Overview Bajaj FinServ Limited Challenges • General slowdown in the economy during 2008-09 • Sector driven by unit liked products • High lapsation and lower persistency ratio(1) • Ability of insurers to raise capital • Agent productivity Note: 1) Ratio showing the perc
Slide 11: Bajaj Allianz Life Insurance Overview
Bajaj Allianz Life Insurance Overview Bajaj FinServ Limited • Owned 74% by Bajaj FinServ and 26% by Allianz SE • Third largest private life insurer in India with a market share of 10.6% of private sector (by APEs) • 5 year APE CAGR of 83% compared to market CAGR of 30% and private insurer CAGR of 71
Slide 12: Bajaj Allianz Life Insurance Overview
Bajaj Allianz Life Insurance Overview • Total Premium underwritten – Comparison Premium In INR Million Q1 FY10 Q1 FY 09 FY 09 FY 08 New Business Premium 5,775 8,288 44,914 66,745 Growth rate -30% 14% -33% 55% Renewal Premium 14,233 10,182 61,331 30,508 Growth rate 40% 208% 101% 193% Gross Written Pr
Slide 13: BALIC’s Focus and Initiatives
BALIC’s Focus and Initiatives Bajaj FinServ Limited • Balance growth with fair return for all stake holders • Diversify product mix and reduce dependence on any single product • Control commission costs and operating expenses – New Business commission for Q1/FY10: 22% (Q1/FY09 : 23%) – Operating exp
Slide 14: BALIC’s Strategy and Strengths
BALIC’s Strategy and Strengths Bajaj FinServ Limited • 3rd largest private life insurer with 10.6% of private sector market share for Q1/FY10 (by APE) • Strong growth in the past 5 years while maintaining best in class capital and operating efficiencies • Focus on improving profitability and not agg
Slide 15: BALIC – Performance Summary
BALIC – Performance Summary Bajaj FinServ Limited Q1 Q1 FY Rs. in billion 2009-10 2008-09 2008-09 Gross written premium 20.0 18.5 106.2 New business premium 5.8 8.3 44.9 Renewal premium 14.2 10.2 61.3 APE * 5.2 7.6 40.6 Policyholder surplus/(deficit) 0.6 0.7 1.2 Shareholder Profit/(Loss) 0.1 (0.7) (
Slide 16: New Business Achieved Profit (NBAP) trend
New Business Achieved Profit (NBAP) trend Bajaj FinServ Limited NBAP Period INR Mn Q1 FY 2009/10 829 FY 2008/09 7,212 Q1 FY 2008/09 1,487 FY 2007/08 12,029 NBAP Comparison with other Life Companies might not be very relevant as actuarial Assumptions & methodology used are likely to vary from Company
Slide 17: Bajaj Allianz General Insurance Co.
Bajaj FinServ Limited Bajaj Allianz General Insurance Co. 17
Slide 18: General Insurance Industry Overview
General Insurance Industry Overview Bajaj FinServ Limited General Insurance Penetration Insurance Density Premium (US $) to GDP Premium (US $) to Population 5.0% 4.7% 2,500 2,164 4.0% 3.6% 2,000 3.0% 1,428 1,383 3.0% 1,500 2.4% 2.1% 2.0% 1.6% 1,000 736 1.1% 1.0% 0.6% 500 203 107 26 6 0.0% 0 US Germa
Slide 19: General Insurance: Industry Overview
General Insurance: Industry Overview Bajaj FinServ Limited Opportunities • Market is still in its infancy – General insurance premium to GDP of 0.6% • Deregulated operating environment – Focus on expanding product lines and creating customized risk solutions • Intense competition has led to industry
Slide 20: Bajaj Allianz General Insurance Overview
Bajaj Allianz General Insurance Overview Bajaj FinServ Limited • Owned 74% by Bajaj FinServ and 26% by Allianz SE • Second largest private general insurance company in India, with 8.6% market share • Premiums have grown at a 5 year CAGR of 41% vs. 14% for industry and 41% for private players • The C
Slide 21: Focus and Strategy
Focus and Strategy Bajaj FinServ Limited • In this challenging environment, the company seeks to concentrate on – Preserving profitability – Maintaining market share – Efficiently utilizing capital • Key focus areas: – Push renewal ratios – renewal monitoring centralized – Improve operating efficien
Slide 22: Summary Results - BAGIC
Summary Results - BAGIC Bajaj FinServ Limited Q1 Q1 Rs. in million 2009-10 2008-09 FY 2009 Gross Written Premium 6,347 7,335 26,491 Net Earned Premium 4,321 4,064 16,960 Underwriting results excluding losses 6 (235) (196) from Motor Pool Net loss from Motor Pool (165) (120) (531) Underwriting loss i
Slide 23: Bajaj Auto Finance Ltd.
Bajaj FinServ Limited Bajaj Auto Finance Ltd. 23
Slide 24: BAFL product portfolio
BAFL product portfolio Bajaj FinServ Limited Cross sell Personal loans Insurance services 24
Slide 25: Q1 / FY10 overview
Bajaj FinServ Limited Q1 / FY10 overview • Macro Environment continues to be challenging. Some improvement visible in Q1 / FY10. Need to wait and watch • Strong momentum in durable financing & mortgages despite a tough economic environment • Started acquiring portfolios in related businesses to leve
Slide 26: Summary Income Statement
Bajaj FinServ Limited Summary Income Statement (Rs Lakhs, except EPS) Q1’ 10 Q1’09 %▲ Income from operations 16486 10372 58.95% Other operating income 2470 2414 2.32% Total Income 18956 12788 48.23% Interest & other finance charges 4163 4344 4.17% Net interest income 14793 8444 75.19% Operating expe
Slide 27: Snapshot - Q1 / FY10
Bajaj FinServ Limited Snapshot - Q1 / FY10 Disbursements up by 71.39% QoQ Revenues up by 47.83% QoQ Disbursements(Rs.Lakhs) Revenues(Rs.Lakhs) Revenues(Rs.Lakhs) 2 per. Mov. Avg. (Revenues(Rs.Lakhs)) 2 per. Mov. Avg. (Disbursements(Rs.Lakhs)) 18956 17580 15800 98350 12823 13736 Disbursements 57384 6
Slide 28: Snapshot – Q1 / FY10
Bajaj FinServ Limited Snapshot – Q1 / FY10 Pre-tax profit up by 417.29% QoQ. Net NPA Reducing NPA Net NPA(%) 2 per. Mov. Avg. (Net NPA(%)) Pre-tax profit(Rs.Lakhs) Pre-tax profit(Rs.Lakhs) 2 per. Mov. Avg. (Pre-tax profit(Rs.Lakhs)) 7.05 6.38 6.16 2314 2333 5.45 Net NPA(%) 4.5 1628 711 451 Q1'09 Q2'
Slide 29: Snapshot – Q1 / FY10
Snapshot – Q1 / FY10 Bajaj FinServ Limited Capital adequacy increasing leverage Book Size increasing book size Book Size(Rs.Lakhs) 2 per. Mov. Avg. (Book Size(Rs.Lakhs)) Capital adequacy ratio(%) Capital adequacy ratio(%) 2 per. Mov. Avg. (Capital adequacy ratio(%)) 311481 Book size(Rs.Lakhs) 261300
Slide 30: Summary
Summary Bajaj FinServ Limited • Manage current cycle in a safe and responsible way – Keep a gradual pace of organic growth – Manage credit cycle through efficient collections & stricter credit screens • Expand product line strategy – Launch Construction equipment finance business • Explore portfolio
Slide 31: Thank you
Bajaj FinServ Limited Thank you No part of this presentation is to be circulated, quoted, or reproduced for any distribution without prior written approval from Bajaj FinServ Limited, Mumbai-Pune Road, Akurdi, Pune-411 035, India. Certain part of this presentation describing estimates, objectives an
Slide 32: Appendix – Life Insurance
Bajaj FinServ Limited Appendix – Life Insurance 32
Slide 33: Capital Position – Private Players
Capital Position – Private Players Bajaj FinServ Limited ( Rs. In billion ) Capital as at GWP to Capital GWP GWP 31st Mar 09 Insurers ratio (Apr – Mar Apr – Mar 08 Apr – Mar 09 09) ICICI Prudential 135.61 153.56 47.80 3.21 SBI Life 56.22 72.12 10.05 7.18 Bajaj Allianz 97.25 106.25 12.11 8.78 Relianc
Slide 34: Market Share
Market Share Bajaj FinServ Limited Rs. in million New Business Premium (NB) * Individual (APE) ** S. Apr – Market Apr – Market Apr – Market Apr – Market INSURER No. Jun 09 Share Jun 08 Share Jun 09 Share Jun 08 Share 1 SBI Life 10,727 7.4% 11,487 8.0% 4,935 6.4% 4,723 5.6% 2 ICICI Prudential 8,071 5
Slide 35: Shareholders Funds and Investments
Bajaj FinServ Limited Rs. in million As on As on As on Shareholders Jun 09 Mar 09 Mar 08 1,507 1,507 1,507 Funds Share Capital Share premium 10,600 10,600 10,600 sub-total 12,107 12,107 12,107 Balance in P & L account (5,518) (5,606) (4,899) Total 6,589 6,501 7,208 No fresh capital infused during th
Slide 36: Appendix – General Insurance
Bajaj FinServ Limited Appendix – General Insurance 36
Slide 37: Key highlights Investment in shares
RsBajaj FinServ Limited in Mns As on As on As on Key Rs. in million 30-Jun-09 31-Mar-09 31-Mar-08 highlights Investment in shares NIL NIL 399 Bonds, cash, mutual funds etc. 25,958 24,786 20,084 Total Cash and investments 25,958 24,786 20,483 Share Capital + premium 2,768 2,768 2,768 Total shareholde
Slide 38: Market Share
Market Share Bajaj FinServ Limited FY 2009 2008-09 Apr-Feb FY 2008 11.9% 11.2% 10.0% 8.5% 8.2% 8.6% 6.9% 6.3% 4.4% 5.0% ICICI Bajaj Allianz Reliance IFFCO Others ICICI Bajaj Allianz Reliance IFFCO Others Lombard TOKIO private Lombard TOKIO Private • Private sector share increased from 40 % to 41.1%
Slide 39: Capital efficiency
Capital efficiency Bajaj FinServ Limited 2008-09 Apr-Feb • Bajaj Allianz continues to be the most efficient utilizer of capital amongst top private companies • Bajaj Allianz is the only company to increase capital efficiency during 2009 – no new capital raised in 2009 Capital efficiency measured as
Slide 40: Profitability compared to peers
Bajaj FinServ Limited Profitability compared to peers 2008-09 Apr-Feb PBT PBT Rs. in million 2008 - 09 2007 - 08 ICICI Lombard 3 1,302 Reliance General (loss) (502) (1,628) Bajaj Allianz 1,498 1,679 Bajaj Allianz continues to be the most profitable company amongst its peers under extremely difficult