Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Merger or Acquisition (October 2023)
24 slides from Au Small Finance Bank's merger presentation, Oct 30, 2023
Slide 1: Cover letter to stock exchanges on revised investor presentation
Ref. No.: AUSFB/SEC/2023-24/219 Date: October 30, 2023 To, National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai 400051, Mumbai 400001, Maharashtra. Maharashtra. NSE Symbol: AUBANK Scrip Co
Slide 2: AU Small Finance Bank and Fincare Small Finance Bank Merger
Investor Presentation AU Small Finance Bank and Fincare Small Finance Bank Merger 29 Oct 2023
Slide 3: 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 4: Table of Contents
Table of Contents 01 Transaction Overview 02 Key Strategic Rationale 03 Proforma Financials 04 Indicative Timeline & Integration 05 About Fincare Small Finance Bank 33
Slide 5: Transaction Overview (1/2)
Transaction Overview (1/2) Transaction Summary ❑ Fincare Small Finance Bank (“Fincare SFB”) to merge into AU Small Finance Bank (“AU SFB”), through RBI administered scheme of amalgamation under Section 44A of the Banking Regulation Act, 1949 ❑ Merger to be effected through a share swap transaction:
Slide 6: Transaction Overview (2/2)
Transaction Overview (2/2) Highlights of Fincare SFB (Sep’23) ❑ Leading digital first small finance bank with focus on underbanked customers and a diverse suite of deposit & asset products ❑ ~54 Lacs customers with ~93.6% of Microfinance loans located in rural areas ❑ Total Deposits of ₹ 9,453 Cr of
Slide 7: Key Strategic Rationale
Key Strategic Rationale Complementary branch footprint building a truly pan India Small Finance Bank Diversification of portfolio with access to rural and financial inclusion focused Microfinance business Significant opportunity to expand deposit and asset franchise in South India Shared values, com
Slide 8: Complementary branch footprint…
Complementary branch footprint… Branch density complementary in key states States AU Fincare Proforma Wider coverage and deeper presence Rajasthan 401 72 473 Touchpoints AU Fincare Proforma Gujarat 151 108 259 North 17% 7% 12% Madhya Pradesh 139 85 224 West 64% 20% 40% Maharashtra 115 82 197 South 2
Slide 9: …building a truly pan India Small Finance Bank
…building a truly pan India Small Finance Bank 02 16 93 04 168 58 2,334 01 touchpoints post merger 02 14 56 44 12 AU Fincare 473 39 Deposit Branches 549 * 136 259 18 Asset Center (AU) 224 146 / Micro Banking 230 763 197 Units (Fincare) 193 03 Business 263 393 Correspondents 111 03 Total 1,042 1,292
Slide 10: Diversification of portfolio…
Diversification of portfolio… Gross Advances (in ₹ Cr) Proforma 8.9% 2.6% 7.6% 10.4% 1.6% 7.8% 7.5% 27.4% 31.9% 14.2% 53.9% 8.7% 65,029 10,541 75,570 22.8% 19.8% 18.9% 27.2% 28.6% Wheels MBL (SBL) Commercial Asset Home Loan Microfinance Gold Loans Others On proforma basis, Microfinance portfolio for
Slide 11: …with access to rural and inclusion focused Microfinance business
…with access to rural and inclusion focused Microfinance business Microfinance Snapshot Key Characteristics ❑ Very strong and experienced team with a vintage of ~10 years at senior level 77k + 29 Lacs + 93.6% Villages Base of Pyramid % of Rural ❑ Lending exclusively to women from low-income rural &
Slide 12: Significant opportunity to expand deposit and asset franchise in South India
Significant opportunity to expand deposit and asset franchise in South India Distribution Team Product Suite Tech Capability AU’s strong customer facing digital proposition combined Fincare SFB’s deep presence Fincare SFB’s experienced AU SFB’s diversified product with Fincare’s strong in South Indi
Slide 13: Compelling synergy potential
Compelling synergy potential Fincare SFB Metro + Cross-sell AU’s product basket including wheels, personal loans, UPI QR / merchant 17.6 Urban deposit lending, credit cards and wealth solutions to Fincare’s urban deposit customers Lacs Customers AU SFB touchpoints in Expand Microfinance business in
Slide 14: Integration to be smooth and seamless
Integration to be smooth and seamless Two Small Finance Banks… …joining hands to become One Family ❑ Alignment of charter to promote financial ❑ All Fincare SFB employees (14,867) to become part inclusion of AU family ❑ Common regulatory framework ❑ Fincare’s Management team to add depth and further
Slide 15: Proforma H1 FY24 Financials: Key Metrics
Proforma H1 FY24 Financials: Key Metrics Pro Forma Delta vs AU Gross Advances 65,029 10,541 75,570 16% Deposits 75,743 9,453 85,196 12% Net Worth 11,763 1,539 14,002* NA Equity Shares Outstanding (Nos.) 66,82,28,624 22,07,79,720 74,17,01,512* NA Book Value per Share (in ₹.) 176.0 69.7 188.8* 7% Capi
Slide 16: Process and Timeline Overview
Process and Timeline Overview Key Activities Particulars Board Decisions, Announcement ▪ 29th October 2023 Appointed Date of Merger ▪ 1st February 2024 Governing Regulations ▪ Section 44A of the Banking Regulation Act, 1949 ▪ Reserve Bank of India Approvals Required ▪ Competition Commission of India
Slide 17: Deal Support
Deal Support AU SFB Fincare SFB Financial Advisors Ambit, Mirae ICICI Securities, Arpwood Capital Legal Advisors AZB & Partners Anagram Partners Diligence Advisors KPMG PWC Independent Valuers Bansi S. Mehta Valuers LLP RBSA Valuation Advisors LLP Fairness Opinion JM Financial Ltd IIFL HR Consultant
Slide 18: About Fincare Small Finance Bank
About Fincare Small Finance Bank 17
Slide 19: Fincare SFB - Leading digital first Microfinance and Gold Loan Focused SFB
Fincare SFB - Leading digital first Microfinance and Gold Loan Focused SFB 01 Deep rural franchise with over 15 years of experience in microfinance 02 Pan India player with multi-channel, low-cost distribution network and strong presence in South 03 Fast growing granular and sticky deposit base 04 H
Slide 20: Fincare SFB - Leading digital first Microfinance and Gold Loans Focused SFB
Fincare SFB - Leading digital first Microfinance and Gold Loans Focused SFB Extensive Business model focused on ~94% ~43% ~85% Rural financial inclusion in rural and Microfinance Share of New to Credit Franchise semi-urban areas customers in Priority Sector Customers rural areas Advances Extensive O
Slide 21: Fincare SFB - Leading digital first Microfinance and Gold Loans Focused SFB
Fincare SFB - Leading digital first Microfinance and Gold Loans Focused SFB Stable Growing deposit base across 9,453 ~80% ~80% existing microfinance borrowers Share of Term Deposits Deposit Base and newer customer segments Total Deposits with tenor greater Retail Deposits than 6 months Digital First
Slide 22: Fincare SFB: Company Overview
Fincare SFB: Company Overview Shareholding (Sep’23) Strong Corporate Governance Shareholders of Fincare SFB % ❑ The Bank has been governed by stable and experienced Fincare Business Services Ltd. (“FBSL”) 78.6% Board comprising of 11 Directors: True North 2.3% ▪ 6 Independent Directors Leapfrog 4.6%
Slide 23: MFI industry has matured, proving its resilience through economic cycles
MFI industry has matured, proving its resilience through economic cycles, minimizing structural risks & has pathway to sustainable growth Demonetization Farm Loan AP Ordinance AP Farm Loan & Farm Loan Waiver, Floods, COVID 19 (FY13) Waiver (FY15) Waiver NBFC Crisis (FY 2021 – 22) (FY 2016 – 17) (FY1
Slide 24: Thank You
AU Thank You
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