Bajaj Finserv Limited : Bajaj Finserv Results – Q3/2011-12

Press Release Income ? 55%; Profit After Tax ? 59% !!

A meeting of the Board of Directors of Bajaj Finserv Limited was held today to consider and approve the results for Q3 FY12.

Bajaj Finserv - a holding company, is the financial services arm of the Bajaj group with business interest in

"Protection", "Lending", and "Financial advisory and Wealth management" through its subsidiary companies.
While the total income for Q3 FY12 is up by 55%, Profit After Tax has increased by 59% to ` 170 crore. The strong results are due to the performance of the underlying subsidiaries, each of which has reported robust numbers.

HIGHLIGHTS -

Q3 FY12 v/s Q3 FY11

?Consolidated profit after tax - ` 170 crore v/s ` 107 crore ? 59%
?Bajaj Finance, profit after tax - ` 120 crore v/s ` 76 crore ? 58%
?General insurance, profit after tax - ` 60 crore v/s ` 35 crore ? 71%
?Life insurance, business profit - ` 283 crore v/s ` 300 crore
of which, shareholders' profit - ` 63 crore v/s ` 40 crore ? 58%

9M FY12 v/s 9M FY11

?Consolidated profit after tax - ` 457 crore v/s ` 242 crore ? 89%
?Bajaj Finance, profit after tax - ` 298 crore v/s ` 176 crore ? 69%
?General insurance, profit after tax - ` 162 crore v/s ` 100 crore ? 62%
?Life insurance, business profit - ` 854 crore v/s ` 666 crore ? 28%
of which, shareholders' profit - ` 173 crore v/s ` 61 crore ?184%
Summary of consolidated results is given in Annexure A.
A synopsis on the performance of the individual companies is given below:

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A. Bajaj Finance Limited (BFL)

?Profit after tax - ` 120 crore in Q3 FY12 v/s ` 76 crore in Q3 FY11 ? 58%.
?Deployments ? 68%; ` 4649 crore in Q3 FY12 v/s ` 2774 crore during Q3 FY11.
?Assets under management stood at ` 11919 crore as on 31st December 2011 v/s ` 7571 crore as on
31st March 2011.
?Gross income ? 55%; ` 603 crore in Q3 FY12 v/s ` 388 crore during Q3 FY11.
?Loan losses and provisions for Q3 FY12 20% at ` 36 crore v/s ` 45 crore in Q3 FY11. Net NPA for
Q3 FY12 stood at 0.25% - the lowest for the company in the last 5 years.
?Capital adequacy ratio stood at a healthy 17.3%. Summary of financial results is given in Annexure B.

B. Bajaj Allianz General Insurance Company Limited (BAGIC)

?During the current quarter, the company posted a profit after tax of ` 60 crore v/s ` 35 crore in
Q3 FY11 - an increase of 71%.
?Gross written premium for Q3 FY12 increased by 15% to ` 775 crore v/s ` 675 crore in Q3 FY11.

?Combined ratio (excluding motor pool losses) improved by 8% from 99.4% in Q3 FY11 to 91.4%

in Q3 FY12. Similarly, combined ratio (including motor pool losses) was at impressive 98.9% in Q3
FY12.

? Loss ratio improved by 6.1% from 64.2% in Q3 FY11 to 58.1% in Q3 FY12.

?Cash and investments as on 31st December 2011 stood at ` 4220 crore.
?IRDA has recently issued Order dated 3rd January 2012 directing member companies of the Indian Motor Third Party Insurance Pool to carry as a reserve, in respect of Motor Pool losses, calculated at an Ultimate Loss Ratio of 159%, 188%, 200% and 213% for the years 2007-08 to 2010-11 respectively and consequently relaxed the Solvency Margins required to be maintained for the next
4 years starting 31st March 2012. Based on discussion with IRDA officials with respect to the timing of the recognition of the said reserve, it has been clarified that the said amount is intended to be provided as at 31st March 2012 and consequent to this the relaxation in the Solvency Margin, as per the order, has been made available w.e.f. 31st March 2012.
The company is also awaiting clarifications on the various issues raised by the industry arising out of the above said Order. In the event of the company being required to provide for the motor pool losses for all the years from 2007-08 as per the above order, the additional liability that would be required to be booked on 31st March 2012, works out to approximately ` 329 crore
Summary of financial results and key ratios is given in Annexure C.

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C. Bajaj Allianz Life Insurance Company Limited (BALIC)

?BALIC's business profit for Q3 FY12 was ` 283 crore v/s profit of ` 300 crore in Q3 FY11.
?Shareholders' profit during the current quarter was ` 63 crore v/s ` 40 crore in Q3 FY11.
?Gross written premium was ` 1674 crore in Q3 FY12 v/s ` 2256 crore in Q3 FY11.
?New business premium for Q3 FY12 was ` 653 crore v/s ` 826 crore in Q3 FY11. The decline in new business premium for Q3 FY 12 was 21% compared to 37% and 38% respectively for Q1 FY12 and Q2 FY12.
?Renewal premium for Q3 FY12 was ` 1021 crore v/s ` 1430 crore in Q3 FY11.
?Solvency ratio stood at a healthy 504% as on 31st December 2011 as against the minimum regulatory requirement of 150%.
?Total investments as at 31st December 2011 stood at ` 35545 crore.
Summary of financial results is given in Annexure D.

Sanjiv Bajaj Managing Director

18th January 2012

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Annexure A

Bajaj Finserv Limited Registered Office : Mumbai - Pune Road, Akurdi, Pune 411 035 Corporate Office : Off Pune - Ahmednagar Road, Viman Nagar, Pune - 411 014
CONSOLIDATED RESULTS
(` In Lakh)
Particulars QUARTER QUARTER NINE MONTHS NINE MONTHS YEAR ENDED ENDED ENDED ENDED ENDED 31.12.2011 31.12.2010 31.12.2011 31.12.2010 31.03.2011 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Gross revenue i. Gross written premium a) Life Insurance - Bajaj Allianz Life Insurance Co. Ltd. b) General Insurance - Bajaj Allianz General Insurance Co. Ltd. ii. Gross income - Bajaj Finance Ltd. iii. Income from windpower generation - Bajaj Finserv Ltd. iv. Investment income (excluding accretions on unit linked investment) v. Others Total	1674 2256 4740 6407 9610 775 675 2384 2094 3129 603 388 1549 715 1109 20 7 72 36 42 271 253 749 589 766 16 15 46 40 55
Gross revenue i. Gross written premium a) Life Insurance - Bajaj Allianz Life Insurance Co. Ltd. b) General Insurance - Bajaj Allianz General Insurance Co. Ltd. ii. Gross income - Bajaj Finance Ltd. iii. Income from windpower generation - Bajaj Finserv Ltd. iv. Investment income (excluding accretions on unit linked investment) v. Others Total	3359 3594 9540 9881 14711
Income from operations 825 532 2151 1126 1508 Transfer from Policyholders' Account - - - - 935 TOTAL INCOME 825 532 2151 1126 2443 Expenditure : a) Transfer to Policyholders' Account (2) 3 1 53 32 b) Employees Cost 69 53 197 115 177 c) Marketing & Other Commission 47 32 119 52 85 d) Recovery Cost 24 15 63 26 38 e) Provision for Doubtful Debts net and Bad Debts written off 36 45 114 106 144 f) Depreciation 4 6 12 15 20 g) Other expenditure 69 45 169 97 133 h) Total 247 199 675 464 629 Profit from Operations before Other Income, Interest & Exceptional Item 578 333 1476 662 1814 Other Income - - 1 1 1 Profit before Interest & Exceptional Item 578 333 1477 663 1815 Interest 206 103 515 187 305 Profit after Interest but before Exceptional Item 372 230 962 476 1510 Exceptional item Surplus on pre-payment of sales tax deferral incentive/loan liability - - - - 139 Profit / (Loss) from ordinary activities before tax and share of profit on Investments in Associates 372 230 962 476 1649 Add: Share of Profit after tax on Investments in Associates - - - 21 21 Profit / (Loss) from ordinary activities before tax 372 230 962 497 1670 Tax expense 117 70 287 153 178 Profit / (Loss) after tax 255 160 675 344 1492 Less: Minority Interest in Net Income of subsidiaries 85 53 218 102 377 Net Profit / (Loss) for the period 170 107 457 242 1115 Basic and Diluted Earnings Per Share ( `) (not annualised) before and after extraordinary items 11.8 7.3 31.6 16.7 77.1

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Annexure B - Summary financial results of BFL

` in crore	Q3 FY12	Q3 FY11	9M FY12	9M FY11	FY 11
Gross income	603	388	1549	1012	1406
Interest and finance charges	207	103	517	260	378
Net interest income	396	285	1032	752	1028
Operating expenses	183	125	477	321	453
Loan losses & provisions	36	45	114	167	205
Profit before tax (PBT)	177	115	441	264	370
Profit after tax (PAT)	120	76	298	176	247
Earnings per share (EPS), basic	32.8*	20.9*	81.4*	48.1*	67.5

*Not annualised

Annexure C - Summary financial results of BAGIC

` in crore	Q3 FY12	Q3 FY11	9M FY12	9M FY11	FY 11
Gross Written Premium *	775	675	2384	2094	2905
Net Earned Premium *	563	490	1630	1419	1931
Underwriting profit/(loss) excluding Motor pool losses	48	3	111	-1	27
Provision for Motor Pool losses	-42	-11	-126	-32	-246
Interest and dividend income/capital gain & other	96	61	268	186	281
Profit before tax	102	53	253	153	62
Profit after tax	60	35	162	100	43

KEY RATIOS

Loss Ratio	58.1%	64.2%	60.4%	65.9%	63.4%
Combined ratio (excluding pool losses)**	91.4%	99.4%	93.2%	100.1%	98.6%
Combined ratio (including pool losses)**	98.9%	101.6%	100.9%	102.4%	110.2%

* Figures are excluding inward reinsurance premiums from motor pool

** (Net claims incurred + Net commission + operating expenses ) / Net earned premium

Annexure D - Summary financial results of BALIC

` in crore	Q3 FY12	Q3 FY11	9M FY12	9M FY11	FY 11
Gross Written Premium	1674	2256	4740	6407	9610
New Business Premium	653	826	1595	2337	3466
Renewal Premium	1021	1430	3145	4070	6144
Policyholders' surplus*	220	260	681	605	962
Shareholders' Surplus	63	40	173	61	95
Total Profit (Shareholders'+Policyholders')	283	300	854	666	1057

*Policyholders' surplus, if any, will be transferred to shareholders' account only in Q4 FY12 after audited accounts.

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