Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q2 FY22 Earnings Presentation
45 slides from Au Small Finance Bank's earnings presentation, October 2021
Slide 1: Investor Presentation Q2'FY22
AU aL BADLAAV ome HUMSE HAI INVESTOR PRESENTATION Q2’FY22 Tech-led | Retail Focused | Customer Centric | Well Capitalized | Inclusive
Slide 2: Management Update, Tech Update, Operating & Financial Highlights
Management Update Tech Update Operating & Financial Highlights Branch Banking Update Asset Quality Other Key Updates
Slide 3: 1. Management Update
Au BADLAAV a HUMSE HAI 1. Management Update
Slide 4: Executive summary
Executive summary Operating environment ▪ Improvement seen sequentially in terms of economic activity, borrower connect, business continuity, and overall confidence in the operating environment - these factors are encouraging, but we remain optimistic with cautious approach ▪ Vaccination drive withi
Slide 5: Executive summary
Executive summary Digital ▪ Since the launch of AU 0101 and brand campaign, we have seen strong traction in user registration, engagement and usage ▪ Video Banking experience has been quite encouraging in terms of enhancing reach, acquisition and engagement ▪ Credit card traction building up - ~49,0
Slide 6: We unveiled our brand campaign across platforms in August
We unveiled our brand campaign across platforms in August….. Digital Media ▪ 8.6 Cr views on Videos across digital channels and 39 Cr+ ad impressions Television ▪ Ads across 73 channels, including regional channels Print ▪ Impact Ad on leading publications across English, Hindi and regional newspape
Slide 7: Tremendous response for our digital bank
…and we are witnessing tremendous response for our digital bank Registrations 6.9 Lacs * 1 Lac+ 3x AU 0101 registrations. 48% q-o-q Non-bank customers in daily AU 0101 registrations registered on AU 0101 app Acquisition 32% 49k 2 Lacs+ ** of total SA A/c opened digitally Credit cards issued UPI QRs
Slide 8: Our strategy
Our strategy BADLAAV HUMSE HAI OUR LONG TERM OBJECTIVES Build a credible, trustworthy and sustainable bank that inspires generations to come Act a responsible catalyst to serve financial needs of the unserved and unreached Bring efficiency in intermediation between savers and borrowers Unlock human
Slide 9: Building a strong foundation with focused strategy and execution
Building a strong foundation with focused strategy and execution Commercial Banking (15% of Advances) ▪ Complete suite of Fund based and Non Fund based products ▪ Developing Merchant offerings with UPI QR (2Lac+), POS as entry point for cross-sell Home Loan (5% of Advances) ▪ Experience of over a de
Slide 10: Well entrenched contiguous distribution franchise
Well entrenched contiguous distribution franchise 15 States and 2 UTs 811 Touchpoints 4702 ATMs (794 Branches1 , 17 BCs) Break up of Branches Sr. No. States & UTs Total Branches Distribution of Touch Points# Jammu & Kashmir 1 Rajasthan 332 2 Madhya Pradesh 114 Punjab Himachal Pradesh 3 Gujarat 110 H
Slide 11: Garnering deposits from Urban markets and disbursing in Core markets
Garnering deposits from Urban markets and disbursing in Core markets Liabilities Break up Assets Break up 26% (30%) 35% (36%)(36%) Urban Core Figures in parenthesis are as 65% on 30th Sep-20 (64%) 74% (64%) (70%) 2% 1% 1% 2% RAJASTHAN 4% 4% MAHARASHTRA 5% 17% 28% DELHI NCR 7% PUNJAB 42% 4% GUJARAT 1
Slide 12: 2. Operating & Financial Highlights
2. Operating & Financial Highlights
Slide 13: Q2'FY22 Key highlights
Q2’FY22 Key highlights ₹ 5,135 Cr Disbursements +57% YoY ▪ Disbursements increased significantly in Q2’FY22 as operating environment improved after the 2nd wave impact; up 57% YoY partly due to base effect ₹ 38,011 Cr AUM +24% YoY ▪ Granularity of deposits continued to improve driven by increasing b
Slide 14: Q2'FY22 Key highlights
Q2’FY22 Key highlights 15 States and 2 UTs Touchpoints Customers Employees 811 21.3 lac 23,435 Vs. Vs. Vs. 697 18.1 lac 16,755 (30-Sep-20) (30-Sep-20) (30-Sep-20) Total B/S Assets Disbursements1 Loan AUM Deposits2 CASA Ratio3 ₹ Crore 21% 44,014 53,236 57% 5,135 24% 38,011 45% 39,034 30% Vs. 3,268 30
Slide 15: Q2'FY22 Key financial highlights
Q2’FY22 Key financial highlights Net Interest Income Total Income PAT Shareholders’ Funds ₹ Crore 1,473 1 Profit (after tax) 322 34% 753 20% 1,596 1 38% 6,781 144 from Aavas Income from proceeds 126 42% 561 sale of part 4,916 stake in 1,329 279 Aavas 196 30-Sep-20 30-Sep-21 30-Sep-20 30-Sep-21 30-Se
Slide 16: Spreads remain stable
Spreads remain stable Incremental Spreads AUM Spreads 14.5% 14.0% 12.9% 12.7% 13.8% 11.4% 7.4% 7.5% 7.8% 7.8% 6.8% 6.0% 6.1% 7.0% 5.4% 5.3% 6.3% 6.1% 30-Sep-20 30-Jun-21 30-Sep-21 30-Sep-20 30-Jun-21 30-Sep-21 Disbursement Yields Incremental COF Spread AUM Yield AUM COF Spread ▪ Disbursement yields
Slide 17: Profit & Loss statement
Profit & Loss statement (All Figures in ₹ Crore) H1'FY22 H1'FY21 Y-o-Y Q2'FY22 Q2'FY21 Y-o-Y Q1'FY22 Q-o-Q Income ▪ NII growth at 37% YoY in H1’FY22 aided Interest Earned 2,758 2,397 15% 1,405 1,212 16% 1,353 4% by reduction in CoF by ~89bps and Interest Expended 1,281 1,320 -3% 652 652 0% 629 4% AU
Slide 18: Balance sheet
Balance sheet (All Figures in ₹ Crore) 30 Sep'21 30 Sep'20 Y-o-Y 30 Jun'21 Q-o-Q Liabilities ▪ Shareholders’ fund increased by 38% YoY Shareholders’ Fund 6,781 4,916 38% 6,490 4% and 4% QoQ Deposits 39,034 26,980 45% 37,014 5% Borrowings 4,968 10,123 -51% 6,101 -19% ▪ Mix of deposits in external fun
Slide 19: Other income
Other income (All Figures in ₹ Crore) H1'FY22 H1'FY21 Y-o-Y 30 Sep'21 30 Sep'20 Y-o-Y 30 Jun'21 Q-o-Q Loan Assets Processing & Other Fees 122 71 73% 94 56 67% 28 235% General Banking, Cross Sell & Deposits related fees 67 42 59% 36 27 33% 32 13% PSLC Fees 67 16 311% 49 8 503% 18 177% Miscellaneous 9
Slide 20: Profitability trends
Profitability trends ROA (%) ROE (%) 0.7%* 6.4%* *Profit from Sale of part 1.7% 1.8% 16.1% 14.8% stake in Aavas Financiers Ltd. H1'FY21 H1'FY22 H1'FY21 H1'FY22 ROA Components NII (%) Other Income(%) 0.8%* 5.6% 5.0% 1.5% 1.5% H1'FY21 H1'FY22 H1'FY21 H1'FY22 Opex (%) Cost to Income Ratio (%) Provision
Slide 21: 3. Asset Quality
Au BADLAAV a HUMSE HAI 3. Asset Quality
Slide 22: Asset quality
Asset quality Gross Disbursements All figures in ₹ Cr AUM AUM Yield Gross NPA Advances (Q2’FY22) Wheels 14,280 14.4% 12,947 557 1,906 ▪GNPA reduced sequentially by ₹ 345 Cr to ₹ 1,151 Cr (3.2%) from ₹ 1,496 Cr (4.3%) SBL-MSME 14,378 15.0% 14,091 443 978 ▪ Standard Restructured accounts stood at 3.6%
Slide 23: Credit cost overview
Credit cost overview Credit Cost - Net Impact on P&L Q2’FY22 Q2’FY21 Q1’FY22 (All Figures in ₹ Crore) Repossession Loss 43 5 6 POS Loss 8 3 4 Write off 0 0 0 Other Provisions 2 - 2 Less: Bad Debt Recovery -2 -1 -1 Net Credit Loss (A) 53 7 11 Net Credit Loss (as % of Avg. Total Assets) 0.4% 0.1% 0.1%
Slide 24: Overview of provisions
Overview of provisions Sep'21 Jun'21 (All Figures in ₹ Crore) No. of No. of Loans Provisions Coverage Loans Provisions Coverage facilities facilities GNPA 50,147 1,151 560 49% 59,984 1,496 730 49% Covid related Restructuring (Standard) 21,284 1,302 213 16% 21,391 1,265 207 16% Contingency Provisions
Slide 25: Asset quality has been resilient throughout our growth journey
Asset quality has been resilient throughout our growth journey Collection efficiencies 90+ dpd % 4.2% 4.1% 99% 99% 3.8% 98% 97% 3.6% 88% 89% 89% 2.6% 2.4% 2.5% 54% 1.9% Global Financial Crisis Oil price increase Demonetization Covid Pandemic Global Financial Crisis Oil price increase Demonetization
Slide 26: 4. Tech Update
Au BADLAAV a HUMSE HAI 4. Tech Update
Slide 27: Five pillars of our strategy to build a tech led bank
Five pillars of our strategy to build a tech led bank ▪ Increasing digital offerings and building compelling 01 Digital g customer experience across touch-points ▪ Focus on digitization and automation of internal 02 Digitization processes to increase productivity Our Tech Pillars ▪ Using analytics t
Slide 28: Driving digital banking adoption
Driving digital banking adoption Awareness Adoption Acquisition Every team at the bank plays a prominent role in driving digital bank adoption Bank Customers Tech Savvy Acquire Convert (TS) TS to DC Customers* Digital Customers Technology Branch Banking Customer Service (DC)** Digital Marketing Asse
Slide 29: We launched AU 0101 with a comprehensive suite of features
Last quarter, we launched AU 0101 with a comprehensive suite of features… Deposits Insurance Account opening in 5 simple steps ▪ Life, Health and Motor – All insurance from the comfort of home products at one place ▪ First bank to offer end-to-end mobile journey with multiple insurance companies Loa
Slide 30: Leading to accelerated digital adoption
…Leading to accelerated digital adoption Tech Savvy Monthly Active Customer Base Digital Customers Daily Active Users Customers Users ~21.5 Lacs ~11.5 Lacs ~5.8 Lacs* ~3.2 Lacs ~75K 7.5% 15% 29% 30% 50% Registration Engagement Transactions 3x 50% 67% Increase in Increase in Increase in daily registr
Slide 31: Expanding distribution and enhancing CX with Video Banking
Expanding distribution and enhancing CX with Video Banking ▪ Accelerated acquisition 5x Accounts opened in Q2 vs. Q1 ▪ Widening geographical reach 30% Acquisitions at locations without AU Bank branch 80% 52% ▪ Attracting urban salaried liability customers Urban customers Salaried professionals ▪ Per
Slide 32: Offering limitless possibilities with our Credit cards
Offering limitless possibilities with our Credit cards 49k 55% 95% Cards issued Issued to 1st time credit card users Digital issuance ▪ Launched NTB and ETB card-on-card acquisition journey ▪ More onboarding journeys for various customer segments and co-branded cards in roadmap ▪ Encouraging card us
Slide 33: Deepening our relationship with small merchants through UPI QR
Deepening our relationship with small merchants through UPI QR ▪ First bank to launch notification sound box ▪ Rapidly scaling up merchant acquisitions − 2 lac+ QRs installed* with ~65% activation rate − Processed ~40 Lac transactions in Q2 with 135% q-o-q growth ▪ QR driving improved stickiness in
Slide 34: On a path to transform our tech capabilities
On a path to transform our tech capabilities ▪ 90% of our sales team is now digitized Digitization ▪ Implemented robotic process based Synthetic Monitoring Solution for customer facing applications. 25 more use cases identified for RPA. ▪ On course to move entirely to Microservices Architecture Appl
Slide 35: Our tech initiatives being recognized by reputed institutions
Our tech initiatives being recognized by reputed institutions IBS intelligence IBSi NeoChallanger Bank Awards 2021 ▪ Won ‘Digital banking Initiative of the Year ▪ Won the IBS intelligence NeoChallanger Bank – India’ award at the Asian Banking and Awards - 2021 for delivering great customer Finance R
Slide 36: 5. Branch Banking Update
Au BADLAAV a HUMSE HAI 5. Branch Banking Update
Slide 37: Scale retail-focussed sustainable liability franchise
Scale retail-focussed sustainable liability franchise Key turning points Core Principles of our Deposit Strategy Deposit as a % of Retail Deposits external as a % of total Communication & Engagement liabilities deposits* Automated Customer Life Cycle Mgmt, Virtual RMs, Newsletters April’17 (Bank Lau
Slide 38: Branch banking - snapshot
Branch banking - snapshot Growing Deposit1 Franchise Average Monthly Balance ₹ Crore 7% 50% 37,952 37,164 35,350 34,927 1,600 1,268 1,387 1,150 10,228 8,004 9,772 8,102 25,345 24,932 1,041 927 4,296 3,997 25,861 26,123 25,773 26,124 20,008 20,008 30-Sep-20 30-Jun-21 30-Sep-21 30-Sep-20 30-Jun-21 30-
Slide 39: 6. Other Key Updates
Au BADLAAV a HUMSE HAI 6. Other Key Updates
Slide 40: Financial and digital adoption
Financial and digital adoption Universal Access to Financial Services ➢ 30% of our total touchpoints/branches - 242 are in unbanked rural centres (Tier-VI, population less than 5,000 & Tier-V, population less than 10,000) ➢ Presence in the Special Focus Districts covering 25 Aspirational districts,
Slide 41: Shareholding pattern – 30th September 2021
Shareholding pattern – 30th September 2021 Shareholding Pattern Sr. Key Shareholders Holding on 30 Sep 2021 No. 1 Promoter & Promoter Group 28.4% Foreign (FC,FPI, Promoter & Promoter FII,NRI): 36.0% Group: 28.4% 2 Capital Group 5.6% 3 Wasatch 5.3% 4 Temasek Holding 4.6% 5 Kotak MF & AIF 4.5% 6 WestB
Slide 42: Experienced Board of Directors
Experienced Board of Directors Mr. Raj Vikash Verma Mr. V G Kannan Mr. Krishan Kant Rathi Chairman and Independent Director Independent Director Independent Director 40+ years of experience 38+ years of experience in Banking 35+ years of experience Industry Masters in Economics, MBA (FMS), CAIIB MBA
Slide 43: Abbreviations
Abbreviations AUM Asset Under Management NTC New to Credit BSBDA Basic Savings Bank Deposit A/C OPEX Operating Expenses CASA Current Account Deposits and Savings Account Deposit P&L Profit & Loss Statement CRAR Capital Adequacy Ratio PAT Profit After Tax DPD Days Past Due PMJJBY Pradhan Mantri Jeeva
Slide 44: Disclaimer
Disclaimer This presentation has been prepared by AU SMALL FINANCE BANK LIMITED (the “Bank”) solely for information purposes, without regard to any specific objectives, financial situations or informational needs of any particular person. All information contained has been prepared solely by the Ban
Slide 45: Thank You
THANK YOU For Investor queries contact (details in QR Code): Prince Tiwari | Aseem Pant Email: investorrelations@aubank.in
AU Small Finance Bank — Q2 FY22 Earnings Presentation on 6ix