Published in May 2021
Bajaj Finserv Limited is the holding company for the various financial services businesses under the Bajaj group. It serves millions of customers in the financial services space by providing solutions for asset acquisition through financing, asset protection through general insurance, family protection and income protection in the form of life and health insurance and retirement and savings solutions.
More specifically, the areas are:
Lending Bajaj Finance Limited (BFL), participates in the financing business and is a company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
BFL also operates through a 100% subsidiary namely, Bajaj Housing Finance Limited (BHFL) which is registered with National Housing Bank (NHB) as a Housing Finance Company (HFC) for its mortgage business. BHFL started its operations in FY2018 and all the incremental mortgage business is now done through BHFL. Protection and savings-these are done through (i) Bajaj Allianz General Insurance Company Limited (BAGIC) for general insurance including health insurance; and (ii) Bajaj Allianz Life Insurance Company Limited (BALIC) for life insurance and retirement plans. BAGIC and BALIC are both unlisted joint ventures with Allianz SE, oneof the world’s leading composite insurers.
Digital and Online platform-during the year under review, Bajaj Financial Holdings Ltd., a wholly-owned subsidiary, has firmed up new business plans for undertaking activities on digital and online platform to augment the business of the Company’s subsidiaries and has changed its name to Bajaj Finserv Direct Ltd. with effect from 27th February 2018.
In addition, there are wind-farm assets in Maharashtra with an installed capacity of 65.2 MW.
As required by regulation, BFS has adopted Indian Accounting Standards (Ind AS) for FY2021 which require Ind AS compliant comparatives for FY2020. Accordingly, figures for previous year/period have been recast and reviewed by statutory auditors as per new accounting standards. The insurance companies are not covered under Ind AS. They have prepared Ind AS financials only for the purpose of consolidation. Accordingly, for BAGIC and BALIC, standalone numbers reported below are based on non-Ind AS accounting standards (Indian GAAP) as applicable to insurance companies.
In brief, here is how the three operating entities performed in FY2021.
Lending: Bajaj Finance Limited (BFL)
BFL has continued to deliver outstanding results. Here is a summary:
- Number of new loans booked in FY2021 was 16.88 million
- The Company’s customer franchise grew by 14% to 48.57. Despite COVID-19, assets under management (AUM) increased by 4% to Rs. 152,947 crore
- Total income increased by 1% to Rs. 26,683 crore
- Net interest income (NII) rose by 2% to Rs. 17,269 crore
- Total operating expenses (opex) reduced by 6% to Rs. 5,308 crore. Consequently, opex to NII improved to 30.7% from 33.5% in FY2020
- Pre-impairment operating profit increased by 6% to Rs. 11,961 crore
- Loan losses and provisions grew by 52% to Rs. 5,969 crore
- Profit before tax decreased by 18% to Rs. 5,992 crore
- Profit after tax reduced by 16% to Rs. 4,420 crore
- Bajaj Finance’s capital adequacy ratio as of 31 March 2021 was over 28.31%, which continued to be well above the RBI norms. Tier I adequacy was over 25%
General Insurance: Bajaj Allianz General Insurance Company Limited (BAGIC)
BAGIC is one of India’s leading composite general insurers offering all types of general insurance including motor, health, crop insurance, marine, and various forms of commercial lines of insurance. It has built a strong retail franchise and retained a leading position among private insurers. It was able to hold ground during FY2021 despite COVID-19 affecting not just the general and health insurance industry, but virtually all economic activity. The key results for FY2021 were:
- Gross written premium (GWP) was Rs. 12,624 crore in FY2021
- BAGIC’s market share in the industry, including standalone insurers, was at 6.8% in FY2021, versus 7.2% a year earlier
- Net earned premium reduced by 9% to Rs. 7,436 crore
- Profit before tax increased by 29% to Rs. 1,769 crore
- Profit after tax increased by 33% to Rs. 1,330 crore, the highest ever since its inception in 2001
- The combined ratio was 96.9%
- BAGIC’s return on average equity was 20.3% in FY2021, which was 220 bps higher than the previous year
Life Insurance: Bajaj Allianz Life Insurance Company Limited (BALIC)
In life insurance, BALIC recorded an all-time high Gross written premium (GWP) of Rs. 12,025 crore and an AUM of Rs. 73,773 crore in FY2021. Though market conditions for the industry, which depend on consumer savings, remained depressed for more than two quarters, BALIC recorded excellent growth, well above that of the market. The key results for FY2021 were:
- New business premium grew by 22% to Rs. 6,313 crore
- Individual rated new business premium increased by 28% to Rs. 2,468 crore
- Renewal premium rose by 25% to Rs. 5,712 crore
- Consequently, GWP increased by 23% to Rs. 12,025 crore. This was BALIC’s highest ever GWP
- New Business Value (NBV), a key metric used to measure profitability of life insurance businesses, increased by strong 59% to Rs. 361 crore
- Shareholders’ PAT increased by 29% to Rs. 580 crore
Thanks to excellent business and financial performance of BFL, BAGIC and BALIC under these severely trying times, your Company’s financials have also done well.
- Consolidated revenue stood at Rs. 60,592 crore
- Consolidated PAT was Rs. 4,470 crore
Thank you for your support.