Fedbank Financial Services Ltd. · NSE:FEDFINA
Fedbank Financial Services — Q3 FY24 Earnings Presentation
42 slides from Fedbank Financial Services's earnings presentation, Jan 15, 2024
Slide 1: Investor meet presentation cover letter to exchanges
Secretarial Department January 15, 2024 Ref. FEDFINA/ CS/ 31/ 2023-24 To, To, National Stock Exchange of India Ltd., BSE Limited, Listing Department The Corporate Relationship Dept. Exchange Plaza, C-1, Block G, Rotunda Building, Bandra Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (E), Mumbai –
Slide 2: Fedbank Financial Services Investor Presentation 9M / Q3 FY24
FEDBANK FINANCIAL SERVICES INVESTOR PRESENTATION EMPOWERING EMERGING INDIA WITH EASY ACCESS TO LOANS 9M / Q3 FY24
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (‘Presentation”), which have been prepared by Fedbank Financial Services Limited or Fedfina (the "Company"), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subs
Slide 4: IPO and Listing Ceremony
IPO and Listing Ceremony Listing Date: 30th November, 2023 Stock Exchanges: NSE & BSE Total IPO Size: ₹10.9 bn Primary Size: ₹6.0 bn Secondary Size: ₹4.9 bn Secondary Pre-IPO Size: ₹3.3 bn Only listed NBFC of a listed private bank 3
Slide 5: Who we are
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 6: Q3FY24 Result Summary
Q3FY24 Result Summary YoY QoQ ₹ 107 bn ₹ 33 bn ₹ 654 mn ₹21,637 mn 84% AUM Disbursement Profit After Tax Shareholder’s Fund Secured AUM 34% 7% 24% 14% 28% 13% 65% 45% 48 bps 47 bps 609 17 ₹ 80 bn 25.8% 4,134 Branches States and UTs Borrowings1 CRAR Employees 38 2 2 - 16% -2% 710 bps 610 bps 653 164
Slide 7: Executive Summary
Executive Summary Net profit of ₹654 mn in Q3 FY24, up 28% YoY. RoA and RoE for Q3 FY24 stood at 2.5% and 14.3% respectively. AUM growth of 34% YoY to ₹107.1 bn in Q3 FY24. Disbursals were up 24% YoY at ₹33,441 mn in Q3FY24. Credit rating upgraded to AA+/Stable by CARE ratings. CRISIL ha
Slide 8: Who we are
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 9: Our Board of Directors
Our Board of Directors Independent Directors Executive Director Non-Executive and/or Nominee Directors Balakrishnan Krishnamurthy Anil Kothuri Shyam Srinivasan Chairman & MD & CEO Non-Executive Director Independent Director Ashutosh Khajuria Gauri Shah Non-Executive Independent Director Nominee Dire
Slide 10: Experienced Management Team
Experienced Management Team Anil Kothuri MD & CEO C.V. Ganesh Siddharth K Shardul Kadam Anila Rajneesh Chief Financial Chief Operating Chief Risk Chief Human Officer Officer Officer Resource Officer Vikas Srivastava K Sureshkumar Ramchandar R Jagadeesh Rao CBO – Mortgage CBO – Mortgage CBO – CBO - G
Slide 11: Shareholding Pattern
Shareholding Pattern Shareholding Pattern - 30th December 2023 Top Institutional Shareholders : 30th December 2023 Others 17.2% Investor Details % Holding Federal Bank Ltd 61.7 FII 2.5% MFs 2.4% True North Fund VI LLP 8.8 Insurance Cos 7.4% The Federal Bank SBI Life Insurance 2.5 61.7% True North Fu
Slide 12: Our Growth Journey
Our Growth Journey Delivery: FY23 onwards.. • AUM: ₹107 bn (9M FY24) Scale-up : FY20 – FY22 • Branches: 609 (9M FY24) • Employees: 4,134 (9M FY24) • AUM: ₹62 bn (FY22) Initial public offering 107 • Branches: 516 (FY22) of ₹10.9 Bn Foundation : FY16 – FY19 • Employees: 2,855 (FY22) 91 Credit Rating •
Slide 13: Transformational Journey - Over the years
Transformational Journey - Over the years FY19 FY23 Operational Parameters No. of Branches 149 3.9 x 575 No. of Employees 964 3.7 x 3,570 Disbursement (₹ mn) 19,686 5.5 x 1,07,487 Disbursement per Branch p.a. (₹ mn) 132 1.4 x 187 Disbursement per Employee p.a. (₹ mn) 20 1.5 x 30 Financial Parameters
Slide 14: Our Historical Performance
Our Historical Performance Particulars (in ₹Mn) FY19 FY20 FY21 FY22 FY23 CAGR Operational Information Branches (#) 149 303 359 516 575 Disbursements 19,686 43,795 58,937 74,698 1,07,487 AUM 20,193 38,382 48,624 61,872 90,696 46% Employees (#) 964 1,890 2,125 2,855 3,570 Financial Information Total I
Slide 15: Our Vision & Values
Our Vision & Values Vision Empower Emerging India with Easy Access to Loans Values Execution Excellence People Focus Integrity Customer Centric Clear Objectives Empowerment Transparency Customer Goals Resource Optimization Development Opportunities Accountability Clear Communication
Slide 16: Opportunity and our Strengths
Opportunity and our Strengths Opportunity* Core Strengths MSME Credit Addressable Market Pedigree Phygital Risk People Management Model ₹25 Tn ₹92 Tn credit gap Access to low Branches Great Established cost coupled with Place to Work Risk Culture borrowing digital Credit Gap Formal Sector distributi
Slide 17: Our Product Suite
Our Product Suite Secured Against Collateral Mortgage Loans Gold Loan Business Loan AUM (₹Mn) 54,707 34,036 16,638 (% of total) (51.1%) (31.8%) (15.5%) Avg. Ticket Size 2.0 0.1 2.4 (₹ Mn) Disbursement 7,587 22,239 3,614 (INR Mn) & (Origination Yield) (14.8%) (15.3%) (17.7%) Average LTV 53.8% 70.7% N
Slide 18: Our Mortgage Business
Our Mortgage Business Mortgage Loans Small Ticket LAP and HL Medium Ticket LAP AUM (₹Mn) 27,291 27,416 (% of total) (25.5%) (25.6%) Avg. Ticket Size 1.3 4.9 (₹ Mn) Disbursement 4,172 3,416 (INR Mn) & (Origination Yield) (16.5%) (12.7%) Average LTV 52.8% 55.1% Underwriting Assessed Income Income Base
Slide 19: Our Underwriting Approach
Our Underwriting Approach Category Small Ticket LAP Medium Ticket LAP Business Loan Gold Loan Customer Retail Trading of Snacks and Trading and Installation of Industrial Food and Tea Stall Tailoring Business Savories Electrical Products Expand his product offering and to Refurbish a few existing ou
Slide 20: Our Franchise
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 21: Growing Branch Footprint
Growing Branch Footprint Comprehensive Branch Network… 83 18.9% 609 17 2,000+ Branches States Local channel Branch AUM 282 47.5% 9 and UTs partners Mix Mix 1 1 244 14 33.6% 38 22 20 92 South West North South West North 15 1 More than 70 branches 109 Branch Expansion 20-70 branches 49 Less than 20 br
Slide 22: Growing Disbursements & AUM
Growing Disbursements & AUM ₹ Mn Disbursements YoY: 24% QoQ: 14% 1,07,487 33,440 32,038 29,656 29,329 27,047 74,698 33,122 11,201 10,285 6,683 9,256 58,937 9,471 19,548 43,795 7,602 19,686 17,323 74,365 21,753 22,973 20,073 22,239 51,335 55,150 17,576 8,766 26,472 10,920 FY19 FY20 FY21 FY22 FY23 Q3
Slide 23: Growing Installment Loans Disbursements
Growing Installment Loans Disbursements ₹ Mn Small Ticket LAP & HL Medium Ticket LAP Business Loans 11,022 10,908 11,192 7,654 6,706 5,968 5,181 3,701 3,484 3,278 2,835 2,463 2,873 2,103 5 FY 19 FY 20 FY 21 FY 22 FY 23 FY 19 FY 20 FY 21 FY 22 FY 23 FY 19 FY 20 FY 21 FY 22 FY 23 4,172 3,954 3,614 3,2
Slide 24: AUF Mix by Products
AUF Mix by Products 6% 2% 2% 2% 16% 15% 13% 13% 21% 11% 0% 8% 22% 37% 36% 28% 41% 39% 39% 21% 24% 32% 23% 27% 22% 24% 27% 17% 16% 15% FY19 FY20 FY21 FY22 FY23 Q3 FY24 Small Ticket LAP & HL Medium Ticket LAP Gold Loan Business Loan Other 23
Slide 25: AUM Mix by Products
AUM Mix by Products 2% 2% 2% 6% 16% 15% 13% 16% 21% 11% 0% 8% 22% 37% 32% 28% 41% 39% 39% 26% 24% 32% 23% 27% 22% 24% 26% 17% 16% 15% FY19 FY20 FY21 FY22 FY23 Q3 FY24 Small Ticket LAP & HL Medium Ticket LAP Gold Loan Business Loan Other 24
Slide 26: Off-Book Strategy
Off-Book Strategy ₹ Mn AUM AUF Off Book % Product Q3'24 Q2'24 Q3'23 Q3'24 Q2'24 Q3'23 Q3'24 Q2'24 Q3'23 Mortgage 54,707 50,062 39,802 43,079 40,245 34,823 21.3% 19.6% 12.5% Gold Loan 34,036 32,694 26,106 32,271 32,694 26,106 5.2% 0.0% 0.0% Business Loan 16,638 16,047 12,764 11,389 11,750 11,047 31.5
Slide 27: AUM Mix by Region
AUM Mix by Region Mortgage Loan Gold Loan 1% 5% 0% 3% 6% 9% 9% 14% 18% 13% 17% 17% 20% 34% 28% 27% 29% 28% 29% 32% 30% 38% 40% 100% 77% 65% 67% 66% 62% 63% 56% 53% 55% 45% 42% FY19 FY20 FY21 FY22 FY23 Q3 FY24 FY19 FY20 FY21 FY22 FY23 Q3 FY24 South West North Mortgage Loans includes medium Ticket LAP
Slide 28: Financial Performance
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 29: Financials
Financials ₹ Mn Particulars Q3 FY24 Q2 FY24 Q3 FY23 Operational Information Branches (#) 609 607 571 Disbursements 33,441 29,329 27,047 AUM 1,07,139 1,00,304 79,728 Employees (#) 4,134 3,970 3,481 Financial Information Total Income 4,294 3,980 3,189 Interest Expenses 1,758 1,669 1,252 Net Interest I
Slide 30: Improving Spreads
Improving Spreads Spreads Yields Cost of Borrowings Spreads Yields Cost of Borrowings 17.3% 17.4% 15.8% 16.3% 16.2% 16.1% 15.5% 15.6% 14.5% 13.2% 8.3% 8.4% 8.3% 8.9% 8.5% 8.7% 7.4% 7.8% 7.9% 8.0% 8.2% 8.0% 8.4% 8.2% 8.8% 8.7% 6.1% 7.2% 7.3% 4.9% FY 19 FY 20 FY 21 FY 22 FY 23 Q3 FY23 Q4 FY23 Q1 FY24
Slide 31: Balance Sheet
Balance Sheet ₹ Mn Balance Sheet Q3 FY24 Q2 FY24 Q3 FY23 QoQ YoY FY 23 FY 22 Assets Cash & Cash Equivalents & Other bank 10,967 9,226 6,249 946 1,426 Balance Loans 87,449 85,204 71,952 79,997 56,448 Investments 4,794 3,567 5,220 6,806 5,143 Other Financial Assets & Receivables 1,155 848 381 841 275
Slide 32: P&L Statement
P&L Statement ₹ Mn Profit & Loss Statement Q3 FY24 Q2 FY24 Q3 FY23 QoQ YoY FY 23 FY 22 Interest Income 3,759 3,560 2,839 10,754 8,149 Net Gain on Direct Assignment 165 182 66 348 70 Other Income 371 237 284 1,045 618 Total Income 4,294 3,980 3,189 12,147 8,836 Interest Expenses 1,758 1,669 1,252 4,7
Slide 33: RoA Tree
RoA Tree RoA Tree Q3 FY24 Q2 FY24 Q3 FY23 FY 23 FY 22 Interest Income / Average total assets 14.5% 14.6% 14.2% 13.8% 13.6% Net Gain on DA / Average total Assets 0.6% 0.7% 0.3% 0.4% 0.1% Other Income / Average total assets 1.4% 1.0% 1.4% 1.3% 1.0% Total Income / Average total assets 16.5% 16.3% 15.9%
Slide 34: Risk Management
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 35: Quality of the Book
Quality of the Book Over 80% AUM from customers with CIBIL >6501,2 0% 11% 11% 21% 6% 9% 8% 55% 74% 16% 89% >700 650-700 <650 0/-1 >700 650-700 <650 0/-1 >700 <700 0/-1 Medium Ticket LAP Small Ticket LAP & HL Business Loan Granular loan book with high quality collateral 84% 79.4% ₹ 2.1 mn AUM secured
Slide 36: Portfolio Quality Indicators (1/2)
Portfolio Quality Indicators (1/2) Gross NPA % Net NPA % 2.4% 2.3% 2.0% 2.2% 1.8% 1.7% Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 1+ DPD* % 30+ DPD* % 8.4% 5.1% 4.5% 4.3% 7.4% 7.4% Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY23 Q2 FY24 Q3 FY24 * !+ DPD and 30+ DPD are for non Gold Loan portfolio 35
Slide 37: Portfolio Quality Indicators (2/2)
Portfolio Quality Indicators (2/2) ₹ Mn Q3FY24 Gross Stage 3 % Net Stage 3 % Particulars Gross Net AUF PCR (%) Q3FY24 Q2FY24 Q3FY23 Q3FY24 Q2FY24 Q3FY23 Stage 3 Stage 3 Mortgage 43,079 1,191 926 22.2% 2.8% 3.0% 2.9% 2.2% 2.5% 2.4% Gold Loan 32,271 249 227 8.9% 0.8% 0.9% 1.5% 0.7% 0.8% 1.5% Business
Slide 38: Expected Credit Loss
Expected Credit Loss ₹ Mn Particulars Q3FY24 Q2FY24 Q3FY23 FY22 FY23 Gross Stage 1 Assets 82,831 80,574 67,074 51,311 75,690 % of total loan assets 94% 93.5% 91.9% 89.1% 93.3% ECL provision 359 355 273 253 317 ECL provision % of assets 0.4% 0.4% 0.4% 0.5% 0.4% Gross Stage 2 Assets 3,728 3,596 4,182
Slide 39: Treasury & Funding
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 40: Sources of Funding
Sources of Funding Diversified Funding Profile ALM Position as on 31st December 2023 (Cumulative) ₹ Mn Surplus / 19% (Shortfall) 31,398 < 3 months 17,679 1% 13,719 8% 46,424 < 6 months 26,838 19,586 72% 64,365 < 1 year 33,532 30,833 87,099 < 3 years 19,971 Terms Loans NCDs 67,128 Commercial Papers D
Slide 41: Net Securitization Volume
Net Securitization Volume Off-book AUM ₹ 4,263 Mn ₹ 9,669 Mn ₹ 18,640 Mn* Incremental Sell Down ₹ 2,576 Mn ₹ 7,744 Mn ₹ 11,770 Mn 5,272 4,573 3,886 2,401 1,787 1,925 1,395 676 0 175 ₹ Mn Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 * includes ₹1,764 mn of c
Slide 42: Thank You
THANK YOU investor@fedfina.com www.fedfina.com
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