BAJAJ FINSERV LIMITED

Investor Presentation – Q3 FY18*

* Financial year 2017-18

Bajaj Finserv – A diversified financial services
group

55.13%* 74% 74%

Bajaj Finance Limited Bajaj Allianz General Bajaj Allianz Life

Insurance # Insurance #
• Diversified NBFC present in
consumer finance, SME, • Highest PAT among private • Among the top 5 private sector
commercial and rural lending players and 2nd highest in Life insurers in India on new
• Highest Credit rating of industry in FY17. ROE of 23% in business in FY17
FY17 • Deep, pan India distribution
AAA/Stable by CRISIL, ICRA,
• 2nd largest private General reach
CARE & India Rating
insurer in India as of FY17 in • Diversified distribution mix –
• Strong distribution presence terms of Gross Premium agency, banca, alternate
• AUM++ of Rs 780 Bn as on 31 • Offers a wide range of products channels, direct etc
Dec 17 across retail & corporate segments • AUM of Rs 524 Bn as on 31 Dec 17
• Combined ratio of 91.9% for • Net-worth of Rs 90 Bn as on
• Net NPA stood at 0.53% as on 9M FY18 31 Dec 17
31 Dec 17 • Recognized in the market for • One of the most profitable
claims servicing private life insurers in India

• Bajaj group has a long track record of building large scale, profitable businesses
• Bajaj Finserv is a diversified financial services group spanning life insurance, general insurance, and lending, with
a pan India presence
• Bajaj Finserv is also a listed opportunity to participate in India’s insurance sector
• BFL raised capital through Qualified Institutional Placement in the month of Sep 2017, as a consequence BFS shareholding in BFL reduced
from 57.80% to 55.13% , during the period ended 31 Dec 2017
++ Includes AUM of Rs.16 Bn of Bajaj Housing Finance Limited. BHFL is a 100% subsidiary of BFL which became fully operational in Q3 FY18
Shareholding is as of 31 Dec 2017. Chart shows only major subsidiaries. # Not listed 2
 Bajaj Finserv performance highlights

All Figures in Rs Million

Performance Highlights of Q3 FY18 over Q3 FY17

CY 76,655 17,635 7,486 28,693

21% 28% 22% 4%

PY 63,172 13,782 6,138 27,597

Total Revenue Profit before Tax PAT Net Worth
(Consolidated) (Consolidated) (Consolidated) (Standalone)

• Bajaj Finserv remains a debt free company. Bajaj Finserv’s surplus funds stood at
Rs. 6.6 Bn as on 31 Dec 2017 (Rs. 5.6 Bn as on 31 Dec 2016)

• Consolidated Net Worth stood at Rs. 201 billion (Rs. 153 Bn as on 31 Dec 2016) and
Consolidated Book Value Per Share at Rs. 1,261 ( Rs.959 as on 31 Dec 2016)

3
Consolidated profit components
All Figures in Rs Million
Consolidated profit components for Q3 FY18
Intercompany
adjustments
Bajaj Finserv-
Standalone -
Others
110
Life 7,486
Insurance 2 Bajaj Finserv
General -
Insurance 1,206
Consolidated
Bajaj Finance 1,936

4,232

Consolidated profit components for Q3 FY17

Intercompany
adjustments
Bajaj Finserv-
Standalone -
Others 63
Life
Insurance 6,138
- Bajaj Finserv
General
Insurance
1,424 -
Consolidated
Bajaj Finance 1,458

3,193
4
 9M Highlights
All Figures in Rs Million

Highlights of Group Companies

BAJAJ FINSERV 9M FY18 9M FY17 Growth BAJAJ FINANCE 9M FY18 9M FY17 Growth
Total Revenue 217,701 174,676 25% AUM 763,837 576,048 33%
Net worth (Cons) 200,614 152,625 31% Total Income 97,720 73,193 34%
PAT 20,560 17,271 19% PAT 19,257 13,874 39%

Consolidated Profit Components *

3% 2% 4% 3% 2% BAGIC 9M FY18 9M FY17 Growth

23% GWP 67,225 54,276 24%

29% 33% 40% 47% Total Investments 132,578 104,726 27%
14%
20% PAT 7,346 5,630 30%
25%
22%
24%
60%
49% BALIC 9M FY18 9M FY17 Growth
38% 35% 27%
GWP 49,084 39,355 25%
2012-13 2013-14 2014-15 2015-16 2016-17 Investments 524,008 468,057 12%
BALIC BAGIC BFL Others PAT 5,450 6,380 -15%

• Others includes Bajaj Finserv Standalone, and all remaining components. 5

 Bajaj Finance Limited #

# Standalone 6
Bajaj Finance - Overview

Business Construct

 Non-bank with strategy & structure of a bank with consistent track

record of profitability
 Focused on mass affluent & above clients with strong cross sell
orientation
 Diversified financial services strategy seeks to optimise risk and
profit to deliver a sustainable business model
 Business construct is to deliver a superior ROE and ROA
 Focused on continuous innovation to transform customer experience
to create growth opportunities

7
Bajaj Finance – Overview
DIFFERENTIATORS

Part of the Bajaj Group – one  A trusted brand with strong brand equity
of the oldest & most
respected business houses

Focus on mass affluent and  Overall franchise of 24.81 Mn and Cross sell client
above customers base of 14.37 Mn

Strong focus on cross selling  Centre of Excellence for each business vertical to
assets, insurance and wealth bring efficiencies across businesses and improve
products to existing customer cross sell opportunity

 AUM mix for Consumer : SME : Commercial : Rural

Diversified lending strategy stood at 47.9% : 31.5% : 13.5% : 7.1%

 Continuous improvement in features of products &

Highly agile and innovative
timely transitions to maintain competitive edge

Deep investment in  Has helped establish a highly metricised company

technology and analytics and manage risk & controllership effectively

8
Bajaj Finance’s businesses
BAJAJ FINANCE

Consumer SME Commercial Rural

• Largest consumer • Focused on affluent • Wholesale Lending • Unique hub-and-

electronics, digital SMEs with an average products covering spoke model in 588
products & furniture annual sales of ₹ 10-12 short, medium and locations and retail
lender in India Crores with established long term financing presence across
financials & needs of selected 7,200+ points of sale
• Presence in 529
demonstrated sectors viz. • Diversified rural
locations with 46,000+
active points of sale borrowing track  Auto component lending model with 9
records and ancillary product lines for
• Amongst the largest
• Offer a range of manufacturers consumer and MSME
personal loan lenders
working capital &  Light engineering segments
• EMI (Existing Member growth capital vendors
Identification) Card products and mortgage
franchise of over 11.4 (Loan against property,
 Financial
Mn (incl EMI & Virtual Lease Rental
institutions
EMI cards) Discounting & Home • Structured products
• Among the largest Loans) products to SME collateralized by
new loans acquirers in & self employed marketable securities
India (4.53 Mn in professionals or mortgage
Q3 FY18) • Relationship
management approach
to cross sell

9
Bajaj Finance has clocked healthy growth in
revenues All Figures in Rs Million

Book Size Total Income

800,000 730,687 120,000

700,000 99,890
100,000
600,000 568,323 542,848
80,000 73,334
500,000 427,558
400,000 60,000 54,182
311,994
300,000
40,744
229,710 40,000 31,097 35,433
167,436 27,000
200,000
20,000
100,000

- -
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18 FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18

Net Interest Income

70,000 61,856
60,000
50,000 44,065
40,000
31,699
30,000 25,011 23,724
19,040 17,198
20,000
10,000
-
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18

10
Portfolio quality continues to be good, and
operating costs remain under control All Figures in Rs Million

Operating expenses as a % of NII Loss Provision and Net NPA%

9,000 8,039 2.0%
60.0% 8,000
45% 46% 45%
50.0% 43% 41% 40% 40% 7,000
5,429
6,000
40.0%
5,000
3,846
30.0% 4,000
3,000
2,588 0.45% 0.44% 2,468
20.0% 1,818 0.28% 0.28% 1,758
2,000 0.19% 0.53%
10.0% 1,000 0.39%
0.0% 0 0.0%
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18 FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18
Loss Provision (Rs. millions) Net NPA %

PAT
20,000 18,366
18,000
16,000
14,000 12,785
12,000
10,000 8,979
7,190 7,668
8,000
5,913 5,557
6,000
4,000
2,000
-
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18
11
Bajaj Finance – Q3 highlights
All Figures in Rs Million

Performance Highlights of Q3 FY18 over Q3 FY17

CY 730,687 35,433 7,668

35% 31% 38%

PY 542,848 27,000 5,557

Book Size Total Income Profit After Tax

CY 1.08% 5.0%

• Borrowing mix is not excessively

dependent on banks. (Mix of 32 : 57 : 11
between banks, money markets and
deposits as of 31 Dec 2017)
PY • Capital Adequacy stands at 24.84% as of
1.07% 6.4% 31 Dec 2017
Return on Assets ROE
(Non-annualized) (Non-annualized)

12
Bajaj Allianz General Insurance

13
General Insurance – Overview

STRATEGY

 Grow faster than market in chosen segments

 Presence across retail and commercial lines, with a
focus on retail business
 Emphasis on profitability through superior
underwriting, & strong cash flow generation, resulting
in superior ROE & CoR
 Deliver industry leading customer experience

14
General Insurance – Overview
DIFFERENTIATORS

 Industry leading combined ratios over the last several

years with superior ROE
Strong selection of Risk
 Highest PAT in private sector in FY17

 Trend-setter in the industry for cash-less claims. First

to insource health insurance administration
Disruptive Innovation  Geographic expansion through unique models viz.
virtual points of sale
 Multi channel distribution network with motor
Balanced distribution dealers, manufacturer tie ups, agency,
mix Bancassurance, direct etc.
 Over 9.9 Mn policies in FY17
 Has a consistent track record of excellence in claims
Excellent claims servicing
servicing  Winner of “Private Sector General Insurance Company
of the Year” in Fintelekt Insurance Awards 2017”

15
BAGIC has maintained consistent industry
leading Combined ratio, below 100%

Combined Ratios
(Including Motor TP Pool Losses)
120.0%
99.5% 98.1% 96.7% 99.3% 96.8% 99.6%
100.0% 92.1%

80.0%

60.0%

40.0%

20.0%

0.0%
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18

1. Combined Ratios are in accordance with the Master Circular on ‘Preparation of Financial statements of General Insurance Business’
issued by IRDA effective from 1 st April, 2013. (Net claims incurred divided by Net Earned Premium) + ( Expenses of management including
net Commission divided by Net Written Premium). Pool losses, wherever applicable, include the impact of the erstwhile IMTPIP and
Declined Risk Pool.

2. Combined ratio ex Motor Third Party Pool for BAGIC for FY13 & FY14 were 89.4% and 94.2% respectively.

16
Consistently delivering industry leading
combined ratios and RoEs
Combined Ratio
110.0% 105.0% 104.7%
99.5% 102.2% 98.1% 101.0% 96.7%
101.5% 99.3% 96.8%
101.7% 99.2%
100.0% 94.3%
88.8%
90.0%
80.0%
70.0%
60.0%
50.0%
FY13 FY14 FY15 FY16 FY17 Q2 FY17 Q2 FY18
BAGIC Top 5 Private Players

ROE (for the period non-annualized)

35.0%
28.0% 28.9%
30.0% 26.7% 25.2%
25.0% 21.7% 22.5% 23.0%
20.8% 20.1%
20.0% 15.7%
15.0%
10.0% 7.7% 6.7%
6.0% 5.1%
5.0%
0.0%
FY13 FY14 FY15 FY16 FY17 Q2 FY17 Q2 FY18

BAGIC Top 5 Private Players

Source : Public disclosures of General insurance Companies

17
BAGIC continues to deliver high efficiency of
capital All Figures in Rs Million

BAGIC - Capital Invested - Networth

43,018
35,346

33,486
50,000

27,897
22,255
40,000

16,643
12,553

30,000

20,000

10,000
2,768 2,768 2,768 2,768 2,768 2,768 2,768
0
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18
No Capital infused after FY08 Net Worth Capital Invested

PAT
8,000 7,278

6,000 5,623 5,642

4,090
4,000 2,951 2,617
1,971
2,000

-
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18

18
BAGIC retains its position among top 2 private
insurers in terms of GWP
Industry Premium Trends
(Ex Specialized GDPI) 1,134
1,200
1,050 874 537
900 776
706
Rs. Billion

750 629 397

600 351
320
450 279 330
282
300 597
386 425 477 127 157
150 350
155 173
-
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18
PSU Private Insurers

BAGIC Premium Trend

76,871
90,000

59,006
53,007

49,370
75,000
45,839

42,236
41,094

38,319
34,931
Rs. Million

60,000
29,243

18,924
45,000

17,216

14,861
12,588
30,000
15,000
-
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18

GWP NEP

Source : IRDAI 19
BAGIC has a balanced business mix

Business Mix
100%
9% 9% 9% 10% 9% 9% 8%
8% 6%
19% 18% 19% 18% 19%
16% 16%
8% 9% 13%
6% 6% 13% 15%
5% 5%
6% 6%
7% 9% 9%
50% 6% 5% 5%

59% 59% 55% 56%

46% 46% 44%

0%
FY13 FY14 FY15 FY16 FY17 9M FY17 9M FY18
Motor (Retail) Health (Retail) Group Health Prop, Liability, Engg Agri (Crop Insurance) Others

 Business mix is retail focused

 Ex Crop GWP Growth for Q3 FY18 was 23% & for 9M FY18 growth was 23%

20
BAGIC continues strong AUM growth

AUM(cash and investments) - Rs Billion

(as of end of period)
140 133

120
108 BAGIC
105
continues to
100 grow its
92
AUM
79 strongly
80
70
58 Investments
60 are largely
in fixed
40
income
securities

20

0
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18
21
Bajaj Allianz General – Q3 highlights
All Figures in Rs Million

Performance Highlights of Q3 FY18 over Q3 FY17

CY 18,924 14,861 2,617 6.3%

10% 18% 33%

PY 17,216 12,588 1,971 6.1%

Gross Written Net Earned Premium Profit After Tax ROE
Premium (Not Annualized)

 Ex Crop GWP was Rs. 18,187 Mn in Q3 FY18 (Rs.14,815 Mn Q3 FY17) a growth of 23%

 Solvency Ratio was 313% as against regulatory requirement of 150% as of 31 Dec 2017

22
Bajaj Allianz Life Insurance

23
Life Insurance - Overview

STRATEGY

 Grow regular premium

 Diversified distribution channels with an emphasis on

individual agents

 Maintain a balanced product mix

 Maintain leadership amongst private companies in the

financial inclusion segment

24
Life Insurance - Overview

DIFFERENTIATORS

 Large pan proprietary agency force

Large Proprietary  Wide distribution reach of offices and agents
Agency Force  Lean support structure

 In terms of lives covered in group schemes, BALIC

Financial Inclusion leads the private sector, with about 35% share of
lives covered in FY17
 Unique, well entrenched participant in rural markets
through partnerships with MFIs, banks etc.

 Balanced product mix between Unit-Linked Insurance

Sustainable Model Plans (ULIP) and Traditional products– ULIP was 72%
of individual rated new business in Q3 FY18

25
Strong growth in Individual Rated premiums
All Figures in Rs Million

Individual Rated NB Agency Individual Rated NB

12,000 12,000
10,101
10,000 10,000
8,667
8,000 7,172 8,000
6,429
6,000 6,000

4,000 3,648 4,000

2,854 2,555 2,882

2,000 2,000

- -
FY16 FY17 Q3 FY17 Q3 FY18 FY16 FY17 Q3 FY17 Q3 FY18

• Focus for Q3 was on balancing product mix between ULIP and Traditional.
• BALIC’s focus is to grow regular premium which is reflected in Individual Rated New Business
premium
• BALIC’s Individual Rated New Business has grown 41% in FY 17, 28% in Q3 FY18 over Q3 FY17 & by
48% in 9M FY18 over 9M FY17

26
Diversified product mix

Individual Rated NB Premium - Product Individual Rated NB Premium - Product

Mix (Annual) Mix (Quarterly)
80% 80% 75% 72%
70%

60% 60%
51%
42%
40% 40%
25% 23%
21%
20% 20%
7% 5% 4% 5%
0% 0%
Individual - Par Individual - Non Individual - Unit Individual - Par Individual - Non Individual - Unit
Par Linked Par Linked
FY16 FY17 Q3 FY17 Q3 FY18

• Individual Rated NB product mix is well diversified across par, non par and UL
• Group Business : Group Fund new business in Q3 FY18 was Rs 3,287 Mn (Q3 FY17 Rs 2,778 Mn) and
in FY 17 Rs 13,902 Mn (FY 16 Rs 10,852 Mn). In Q3 FY18 Group Fund business was 35% of New
Business (PY 36%)
• During Q3 share of ULIP was lower, in line with BALIC’s focus

27
Assets Under Management have grown 12%
AUM as of end of period in
Rs Billion

AUM AUM (Mix)

600
524 Unit Linked Other than Unit Linked
493 350
468

299
500

284
436 441

273
300

249
380 388
400 245

219
250 216 226
213 208
192 195

175
300 200

135
150
200
100
100 50

0 0
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18 FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18

Of the UL Funds of Rs 226 Billion, 66% is equity funds as on 31 Dec 2017

28
BALIC is amongst the most capital efficient
private insurers
All Figures in Rs Million

Capital Invested - Networth

100,000 90,453 BALIC’s Networth is 7.5 times
84,756 82,698
76,315 the Capital infused as of
80,000 67,490
58,708 Q3 FY18
60,000
48,441 No Capital infused after
12,107

12,107

12,107

12,107

12,107

12,107

12,107
40,000 FY08
20,000

-
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18

Capital Invested Networth

PAT
15,000
12,856

10,246 Includes net transfer from

10,000 8,762 8,790 8,363 Policyholders’ account to
P&L – Rs 373 Mn in Q3 FY18
5,000
(Q3 FY17 Rs 299 Mn)
1,924 1,629

-
FY13 FY14 FY15 FY16 FY17 Q3 FY17 Q3 FY18

29
Bajaj Allianz Life – Q3 highlights
All Figures in Rs Million

Performance Highlights of Q3 FY18 over Q3 FY17

CY 3,648 5,685 7,956 17,392

28% 17% 14% 17%

PY
2,854 4,860 6,999 14,847

Individual Rated NB Group NB Renewal Premium Gross Written Premium

CY 1,629 600% 524,008

Solvency Ratio as on
-15% 31 Dec 2017 12%

In addition to this, BALIC had a

fund of Rs 23,969 Mn held
beyond required solvency
PY 1,924 margin forming part of
468,057
PAT shareholders’ investments AUM

30
Disclaimer
This presentation has been prepared by Bajaj Finserv Limited (the “Company”) solely for your information and for your use. This presentation is for
information purposes only and should not be deemed to constitute or form part of any offer or invitation or inducement to sell or issue any
securities, or any solicitation of any offer to purchase or subscribe for, 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 upon in connection with, any contract or commitment therefor. The financial information in this
presentation may have been re-classified and reformatted for the purposes of this presentation. You may also refer to the financial statements of
the Company available at www.bajajfinserv.in, before making any decision on the basis of this information.
This presentation contains statements that may not be based on historical information or facts but that may constitute forward-looking statements.
These forward looking statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and
officers with respect to the results of operations and financial condition of the Company. Such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and actual results may differ from those in such forward-looking statements as a result of
various factors and assumptions which the Company presently believes to be reasonable in light of its operating experience in recent years but
these assumptions may prove to be incorrect. Any opinion, estimate or projection constitutes a judgment as of the date of this presentation, and
there can be no assurance that future results or events will be consistent with any such opinion, estimate or projection. The Company does not
undertake to revise any forward-looking statement that may be made from time to time by or on behalf of the Company.
No representation, warranty, guarantee or undertaking, express or implied, is or will be made as to, and no reliance should be placed on, the
accuracy, completeness, correctness or fairness of the information, estimates, projections and opinions contained in this presentation. Potential
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31
Thank You

32