Fedbank Financial Services Ltd. · NSE:FEDFINA
Fedbank Financial Services — Q2 FY25 Earnings Presentation
49 slides from Fedbank Financial Services's earnings presentation, Oct 23, 2024
Slide 1: Investor meet presentation cover letter to exchanges
Secretarial Department October 23, 2024 Ref. FEDFINA/ CS/ 178/ 2024-25 The Manager The Manager Listing Department Department of Corporate Services The National Stock Exchange of India Limited BSE Limited Exchange Plaza, Bandra-Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (E), Mumbai – 400 051 Fl
Slide 2: Fedbank Financial Services Investor Presentation Q2 FY25
FEDBANK FINANCIAL SERVICES INVESTOR PRESENTATION EMPOWERING EMERGING INDIA WITH EASY ACCESS TO LOANS Q2 FY25
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: Agenda: Who we are
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 5: Q2FY25 Result Summary
Q2FY25 Result Summary YoY QoQ ₹ 142.2bn ₹ 38.1 bn ₹ 645.5 mn ₹ 24,024.1 mn 86.4% AUM Disbursements Profit After Tax Shareholder’s Funds Secured AUM 41.8% 7.8% 29.9% -23.9% 11.8 % -8.1% 60.6 % 3.5 % 241 bps 58 bps 665 18 ₹ 98.3 bn 21.4% 4,743 Branches States and UTs Borrowings1 CRAR Employees 58 46 1
Slide 6: Executive Summary
Executive Summary Fedfina made steady progress on its “Twin-Engine Strategy”. Our AUM grew to ₹142.2 bn in Q2 FY25, achieving a growth of 7.8% QoQ. Mortgage AUM increased to ₹71.8 bn (up 9.0% QoQ), while Gold loans AUM grew to ₹49.3 bn (up 8.2% QoQ). We continue to invest in the future. We inc
Slide 7: Agenda: Who we are
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 8: About Fedfina
About Fedfina We are a majority subsidiary of the Federal Bank Limited, catering to the Product Suite emerging self-employed segment in India. Our parentage provides us with unfettered access to debt and equity. Our vision is to “Empower Emerging India with Easy Access to Loans”. Armed with the
Slide 9: Our Board of Directors
Our Board of Directors Non-Executive and/or Nominee Directors Executive Director Independent Directors Shyam Srinivasan Anil Kothuri Gauri Shah Non- Executive Chairman & MD & CEO Independent Director Non-Executive Director Harsh Dugar Sunil Gulati Non-Executive Independent Director Nominee Director
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: Our Growth Journey
Our Growth Journey Delivery: FY23 onwards.. • AUM: ₹142 bn (Q2 FY25) Scale-up : FY20 – FY22 • Branches: 665 (Q2 FY25) • Employees: 4,743 (Q2 FY25) • AUM: ₹62 bn (FY22) Initial Public • Branches: 516 (FY22) 142 Offering of ₹10.9 Foundation : FY16 – FY19 • Employees: 2,855 (FY22) Bn 122 • AUM: ₹20 bn
Slide 12: Transformational Journey
Transformational Journey FY19 FY24 Operational Parameters No. of Branches 149 4.2x 621 No. of Employees 964 4.5x 4,298 Disbursement (₹ mn) 19,686 6.9x 1,35,787 Disbursement per Branch p.a. (₹ mn) 132 1.7x 219 Disbursement per Employee p.a. (₹ mn) 20 1.6x 32 Financial Parameters (₹ mn) Asset Under Ma
Slide 13: Our Historical Performance
Our Historical Performance Particulars (in ₹Mn) FY19 FY20 FY21 FY22 FY23 FY24 CAGR Operational Information Branches (#) 149 303 359 516 575 621 Disbursements 19,686 43,795 58,937 74,698 1,07,487 1,35,787 AUM 20,193 38,382 48,624 61,872 90,696 1,21,919 43% Employees (#) 964 1,890 2,125 2,855 3,570 4,
Slide 14: 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 15: 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 16: Our Product Suite
Our Product Suite Secured Against Collateral Mortgage Loans Gold Loan Business Loan AUM (₹Mn) 71,758 49,340 19,323 (% of total) (50.5%) (34.7%) (13.6%) Avg. Ticket Size (₹ Lakh) 31.7 1.2 23.4 Disbursement 8,410 26,103 3,592 (INR Mn) & (Origination Yield) (13.3%) (15.8%) (16.9%) Average LTV 52.5% 70.
Slide 17: Our Mortgage Business
Our Mortgage Business Mortgage Loans Small Ticket LAP and HL Medium Ticket LAP AUM (₹Mn) 35,747 36,012 (% of total) (25.1%) (25.3%) Avg. Ticket Size (₹ Lakh) 13.6 62.4 Disbursement 2,296 6,114 (INR Mn) & (Origination Yield) (16.0%) (12.3%) Average LTV 52.9% 52.3% Underwriting Assessed Income Income
Slide 18: Underwriting and Risk Management
Underwriting and Risk Management Initial Assessment Collateral Assessment Controls KYC Ownership check Team of skilled appraisers OCR Data Capturing Multi-step purity check Maker & checker concept KYC doc validations Deductions Internal deduping and geo Gold Loan eSign Caratage
Slide 19: Underwriting and Risk Management
Underwriting and Risk Management Collateral Assessment Initial Assessment / Underwriting Checks Controls Personal discussion Legal checks : Title, charge creation, Risk containment unit Financial and cash flow analysis CERSAI, vetting of documents, etc.. Fraud check Reference checks Te
Slide 20: Our Customers
Our Customers 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 outlets and Pu
Slide 21: Environmental, Social & Governance
Environmental, Social & Governance Purpose Create substantial and profound impacts by actively promoting and nurturing a sustainable culture within the workplace, fostering a sense of care and support for employees and undertake initiatives to develop sustainable communities and protect the environm
Slide 22: ESG : Framework & Structure
ESG : Framework & Structure Framework Structure ESG and CSR Committee (Board) Key Performance ESG Committee ESG Policy Indicators (Comprising of MD&CEO, COO & CFO, Clearly identified list of ESG Head & CHRO) Board approved policy in place to follow and KPI’s in place, metrics adopt ESG Practices for
Slide 23: Making a Change
Making a Change Blood Donation Drive Fedbank Financial Services Limited in partnership with Umang foundation and in collaboration with Sir J.J. Mahanagar Raktpedhi, Byculla, had organized blood donation drive. This donation provided support to patients across various hospitals in the Mumbai City. 22
Slide 24: Digital Landscape
Digital Landscape Fedfina Loans Fedfina Lite Fedfina Collect 10 Lakh+ Downloads 70%+ Digital Registration 60%+ Digital Payments Customer Acquisition & Collection Management Servicing Employee Productivity 23
Slide 25: Technology Landscape
Technology Landscape Origination Underwriting Loan Operations Customer Service • Fully Integrated API stack : OCR, KYC • Cloud based Loan Origination System • Seamless API integration between core • Ubiquitous presence in digital universe - Validation, Aadhaar Vault with robust Loan Management Syste
Slide 26: Agenda: Our Franchise
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 27: Branch Footprint
Branch Footprint Comprehensive Branch Network… 104 21.2% 665 18 2,100+ Branches States Local channel Branch 296 AUM 44.2% 9 and UTs partners Mix Mix 2 2 23 265 39 34.6% 28 24 96 South West North South West North 20 1 2 More than 70 branches 118 Branch Expansion 20-70 branches 49 Less than 20 branche
Slide 28: Disbursements & AUM
Disbursements & AUM ₹ Mn Disbursements YoY: 29.9% QoQ: -23.9% 1,35,787 50,046 43,361 1,07,487 10,340 38,104 42,016 33,440 29,329 14,875 74,698 33,122 12,001 58,937 11,201 19,548 9,256 43,795 7,602 39,706 93,771 28,486 19,686 17,323 74,365 22,239 26,103 51,335 55,150 20,073 8,766 26,472 10,920 FY19 F
Slide 29: Installment Loans Disbursements
Installment Loans Disbursements ₹ Mn Small Ticket LAP & HL Medium Ticket LAP Business Loans 14,750 13,591 13,675 11,022 10,908 11,192 7,654 5,968 6,706 5,181 3,701 3,484 3,278 2,835 2,103 2,463 2,873 5 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 19 FY 20 FY 21 FY 22 FY
Slide 30: AUF Mix by Products
AUF Mix by Products 2% 2% 2% 2% 6% 16% 13% 13% 11% 21% 15% 11% 0% 8% 22% 37% 35% 39% 28% 41% 39% 39% 22% 23% 24% 32% 23% 27% 24% 29% 25% 22% 17% 16% 15% FY19 FY20 FY21 FY22 FY23 FY24 Q2FY25 Small Ticket LAP & HL Medium Ticket LAP Gold Loan Business Loan Other Percentages may not add up to exactly 10
Slide 31: AUM Mix by Products
AUM Mix by Products 2% 2% 1% 1% 6% 16% 15% 13% 15% 14% 21% 11% 0% 8% 22% 37% 33% 35% 28% 41% 39% 39% 25% 25% 24% 32% 23% 27% 22% 24% 26% 25% 17% 16% 15% FY19 FY20 FY21 FY22 FY23 FY24 Q2FY25 Small Ticket LAP & HL Medium Ticket LAP Gold Loan Business Loan Other Percentages may not add up to exactly 10
Slide 32: Off-Book Strategy
Off-Book Strategy ₹ Mn AUM AUF Off Book % Product Q2’25 Q1’25 Q2’24 Q2’25 Q1’25 Q2’24 Q2’25 Q1’25 Q2’24 Mortgage 71,758 65,834 50,062 54,394 50,463 40,245 24.2% 23.3% 19.6% Gold Loan 49,340 45,620 32,694 43,614 39,323 32,694 11.6% 13.8% 0.0% Business Loan 19,323 18,690 16,047 12,898 13,108 11,750 33
Slide 33: AUM Mix by Region
AUM Mix by Region Mortgage Loan Gold Loan 1% 5% 0% 3% 6% 9% 9% 14% 13% 17% 17% 18% 19% 22% 20% 34% 28% 27% 29% 28% 29% 32% 30% 28% 38% 43% 45% 100% 77% 65% 67% 66% 62% 63% 56% 52% 55% 51% 45% 40% 37% FY19 FY20 FY21 FY22 FY23 FY24 Q2FY25 FY19 FY20 FY21 FY22 FY23 FY24 Q2FY25 South West North Percentag
Slide 34: Agenda: Financial Performance
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 35: Financials
Financials ₹ Mn Particulars Q2 FY25 Q1 FY25 Q2 FY24 Operational Information Branches (#) 665 619 607 Disbursements 38,104 50,046 29,329 AUM 1,42,185 1,31,881 1,00,304 Employees (#) 4,743 4,344 3,970 Financial Information Total Income 5,191 4,910 3,980 Interest Expenses 2,142 2,024 1,669 Net Interest
Slide 36: Yields, CoB and Spreads
Yields, CoB and Spreads Spreads Yields Cost of Borrowings Spreads Yields Cost of Borrowings 17.3% 17.4% 17.4% 17.3% 15.6% 15.8% 16.2% 16.0% 15.5% 14.5% 8.8% 8.7% 9.3% 9.0% 8.4% 8.3% 8.5% 8.6% 7.4% 7.8% 8.2% 8.0% 8.8% 8.7% 8.1% 8.3% 7.2% 7.4% 7.4% 6.1% FY 20 FY 21 FY 22 FY 23 FY 24 Q2 FY24 Q3 FY24 Q4
Slide 37: Balance Sheet
Balance Sheet ₹ Mn Balance Sheet Q2 FY25 Q1 FY25 Q2 FY24 QoQ YoY FY 24 FY 23 Assets Cash & Cash Equivalents & Other bank 4,219 5,388 9,226 1,855 946 Balance Loans 1,11,556 1,03,615 85,204 98,225 79,997 Investments 6,870 7,344 3,567 7,513 6,806 Other Financial Assets & Receivables 1,278 1,250 848 1,7
Slide 38: P&L Statement
P&L Statement ₹ Mn Profit & Loss Statement Q2 FY25 Q1 FY25 Q2 FY24 QoQ YoY FY 24 FY 23 Interest Income 4,577 4,305 3,560 14,580 10,754 Interest Expenses 2,142 2,024 1,669 6,797 4,722 Net Interest Income (Core) 2,434 2,281 1,891 6.7% 28.7% 7,783 6,032 Net Gain on Direct Assignment 214 215 182 337 348
Slide 39: RoA Tree
RoA Tree RoA Tree Q2 FY25 Q1 FY25 Q2 FY24 FY 24 FY23 Interest Income / Average total assets 14.9% 14.9% 14.6% 14.4% 13.8% Interest Expenses / Average total assets 7.0% 7.0% 6.8% 6.7% 6.0% Net Interest Income (Core) / Average total assets 7.9% 7.9% 7.8% 7.7% 7.7% Net Gain on DA / Average total Assets
Slide 40: Agenda: Risk Management
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 41: Quality of the Book
Quality of the Book Over 79% AUM from customers with CIBIL >6501,2 2% 19% 11% 23% 5% 8% 7% 55% 68% 15% 87% >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 86.4% 82.6% ₹ 2.86 mn AUM secu
Slide 42: Portfolio Quality Indicators (1/2)
Portfolio Quality Indicators (1/2) Gross Stage III % Net Stage III % 2.3% 1.8% 2.0% 1.9% 1.6% 1.5% Q2 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q1 FY25 Q2 FY25 1+ DPD* % 30+ DPD* % 8.0% 4.5% 4.8% 7.4% 7.3% 4.0% Q2 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q1 FY25 Q2 FY25 41 * 1+ DPD and 30+ DPD are for non Gold Loan portfoli
Slide 43: Portfolio Quality Indicators (2/2)
Portfolio Quality Indicators (2/2) ₹ Mn Q2FY25 Gross Stage III % Net Stage III % Particulars Gross Net AUF PCR (%) Q2FY25 Q1FY25 Q2FY24 Q2FY25 Q1FY25 Q2FY24 Stage III Stage III Mortgage 54,394 1,737 1,355 22.0% 3.2% 3.0% 3.0% 2.5% 2.4% 2.5% Gold Loan 43,614 264 237 10.0% 0.6% 0.8% 0.9% 0.5% 0.7% 0.8
Slide 44: Expected Credit Loss
Expected Credit Loss ₹ Mn Particulars Q2 FY25 Q1 FY25 Q2 FY24 FY24 FY23 Gross Stage 1 Assets 1,06,360 97,982 80,574 93,159 75,690 % of total loan assets 94.4% 93.6% 93.5% 93.9% 93.3% ECL provision 560 452 355 403 317 ECL provision % of assets 0.2% 0.2% 0.3% 0.2% 0.4% Gross Stage 2 Assets 4,201 4,583
Slide 45: Agenda: Treasury & Funding
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 46: Funding Profile
Funding Profile Diversified Funding Profile Daily Average Cost of Borrowing* ALM Position as on 30th Sep 2024 (Cumulative) ₹ Mn Surplus / (Shortfall) 16% 8.75% 8.78% 8.73% 24,846 8.61% 8.45% < 3 months 8,718 16,128 36,166 18% < 6 months 27,927 8,239 57% 3% 76,102 < 1 year 29,266 6% 46,836 Q2 FY24 Q3
Slide 47: Net Securitization Volume
Net Securitization Volume Off-book AUM ₹ 4,263 Mn ₹ 9,669 Mn ₹ 22,756 Mn ₹ 29,515 Mn* Incremental Sell Down ₹ 2,576 Mn ₹ 7,744 Mn ₹ 14,609 Mn ₹ 11,129 Mn 5,769 5,272 5,360 4,573 3,886 2,839 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
Slide 48: Shareholding Pattern
Shareholding Pattern Shareholding Pattern – 30th Sep 2024 Top Institutional Shareholders : 30th Sep 2024 Investor Details % Holding Others 15.6% Federal Bank Ltd 61.2 True North Fund VI LLP 8.7 FII 0.6% MFs 2.8% Nuvama Private Investment 2.8 Insurance Cos 5.4% SBI Life Insurance 2.5 Unifi Capital (B
Slide 49: Thank You
THANK YOU investor@fedfina.com www.fedfina.com
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