Utkarsh Small Finance Bank Limited · NSE:UTKARSHBNK
Utkarsh Small Finance Bank — Q4 FY24 Earnings Presentation
47 slides from Utkarsh Small Finance Bank's earnings presentation, Apr 26, 2024
Slide 1: Intimation letter to stock exchanges
April 26, 2024 The BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers 5th Floor, Exchange Plaza, C-1, Block G, Dalal Street, Fort Bandra Kurla Complex, Bandra East, Mumbai – 400001 Mumbai – 400 051 Scrip Code: 543942, 958095, 958226, 959644 NSE symbol: UTKARSHBNK Dear Sir
Slide 2: Investor Presentation Q4 FY24
Slide 3: Key Highlights Q4, FY24
Key Highlights Q4, FY24 01 Credit growth 31% YoY; deposits growth 27% YoY Healthy growth in micro-banking loan portfolio – Micro-banking portfolio crossed ₹11,000 crore mark 02 Overall deposits book crossed ₹17,000 crore mark; Continued healthy traction in Retail Term Deposits Acquisition – 03 Retai
Slide 4: Key Highlights Q4'FY24
Key Highlights Q4’FY24 ₹18,299 cr. vs. ₹17,473 cr. vs. ₹160 cr. vs. ₹2,973 cr. vs. 888 vs. [830] 2.5% vs. [3.2%] [₹13,957 cr.] [₹13,710 cr.] [₹134 cr.] [₹2,000 cr.] Banking Outlets Gross NPAs Gross Loan Deposits Profit After Tax Capital + Reserves Portfolio 31.1% 27.4% / 42.9% ₹282 cr. vs. 0.03% vs.
Slide 5: Journey and Franchise, Portfolio, Deposits, Financial Performance, Technology
Journey and Franchise Portfolio Build Up Deposits Build Up Financial Performance Technology, ESG & CSR 4
Slide 6: Journey and Franchise
Journey and Franchise Committed journey of ~14 years from Microfinance to Small Finance Bank to Listed Company Significant presence in rural & semi urban locations and under penetrated States of the Country Differentiated branch network to ensure relevant product offerings for customers & ensuring c
Slide 7: Utkarsh Journey
Utkarsh Journey Highest ever annual profit of > ₹400 crore in FY23 Bank’s Capital + Reserves FY24 crossed ₹2,000 crore FY23 In Jul-23 Bank launched IPO to raise equity capital of ₹500 Launched digital on- crore; IPO Utkarsh Small Finance Bank Ltd. boarding of accounts Conversion of oversubscribed wa
Slide 8: Business Overview
Business Overview Focus on Financial inclusion, offer a range of financial products and services that address the specific requirements of customer segments Micro-Banking 62% Other Retail Loans 28% Joint Liability Business MSME Loans Housing Group Loans Loans (Retail Assets) Loans Asset products 1 W
Slide 9: Diversified Distribution Network
Diversified Distribution Network Extensive physical network of Banking Outlets (Mar’24) Potential for Retail Assets within existing Branches (Mar’24) >50 Outlets Total 1 <50 Outlets MB MSME HL Wheels STATES Banking GB Outlets Outlets Locations Locations Locations No Outlets Outlets 2 Chandigarh: 3 9
Slide 10: Differentiated Branch Network
Differentiated Branch Network 830 851 871 880 888* Differentiated branch network to ensure relevant product offerings to the 602 605 612 customers as well as ensuring cost 579 594 efficiency of operations 251 257 269 275 276 All branches CBS enabled; customers can transact from any of the 888 Ma
Slide 11: Strategies
Strategies Continue diversifying asset portfolio Leverage wide base of existing customers in the unserved and underserved segments Extend products offering from JLG loans to individual loans, affordable housing loans and other new products Focus on offering working capital and term loans to MS
Slide 12: Portfolio Build-up
Portfolio Build-up Loan portfolio grew 31% YoY Rural & semi urban franchise, deep rooted understanding of our core geographies, proven track record - key strength of our micro-banking lending Increasing share of secured lending with build-up of MSME, Housing & CV / CE loan book 11
Slide 13: Loan Portfolio Build-up
Loan Portfolio Build-up CAGR% Loan Book (Mar-20) Product (FY20-FY24) Housing Micro-banking Loans 18% Wholesale Loans Lending Others* Other Retail Loans 79% 18,299 1% 5% 2% Wholesale Lending (Excl. BBG) 43% Retail 1,882 13,957 Loans (MSME) 4% 5,104 Micro-Banking 10,631 1,547 Loans Secured Loans 88% 8
Slide 14: Micro-Banking Lending
Micro-Banking Lending 13
Slide 15: Micro-Banking Lending
Micro-Banking Lending All Amounts in ₹ Crores Portfolio Outstanding Demographic Break up of MB Outlets URBAN METROPOLITAN 11,313 JLG: 94% 11% 3% 86% 10,054 MBBL: 6% 9,292 Branches in 9,216 9,059 Rural & Semi- urban areas RURAL SEMI URBAN 38% 48% Geographical Split of MB Portfolio Presence across 13
Slide 16: Micro-Banking Lending (Contd.)
Micro-Banking Lending (Contd.) All Amounts in ₹ Crores Micro-Banking Disbursements MBBL Product Portfolio Outstanding 3,683 671 3,020 553 470 2,619 387 2,366 332 1,897 Mar'23 Jun'23 Sep'23 Dec'23 Mar'24 Q4,FY23 Q1,FY24 Q2,FY24 Q3,FY24 Q4,FY24 Demographic Break up of Portfolio URBAN METROPOLITAN 12%
Slide 17: Micro-Banking – Asset Quality
Micro-Banking – Asset Quality Collection Efficiency (excl. Pre-Payments) 5.9% 6.1% 6.2% 5.0% 97% 97% 96% 98% 3.6% 3.8% 4.0% 2.9% Q1'FY24 Q2'FY24 Q3'FY24 Q4'FY24 0.7% 0.8% 0.9% SMA 1.1% 1.1% 0.7% 0.7% 0.5% 0.9% 0.5% 0.9% 0.9% 0.8% 0.8% 0.5% 0.8% 0.8% 0.7% 0.7% 0.8% 0.7% 0.5% 0.5% 0.5% Jun'23 Sep'23 D
Slide 18: Other Retail Lending
Other Retail Lending MSME (Retail Assets) Housing Loans CE & CV Loans 17
Slide 19: MSME (Retail Assets) Lending
MSME (Retail Assets) Lending All Amounts in ₹ Crores Portfolio Outstanding 2,557 2,183 1,977 1,724 1,534 Secured Unsecured Micro LAP / Business Loans Business Loan Overdraft (LAP) Mar'23 Jun'23 Sep'23 Dec'23 Mar'24 Disbursements (36% YoY Growth) o Significant presence in our core geography 11.5% 11.
Slide 20: Housing Loans
Housing Loans All Amounts in ₹ Crores Portfolio Outstanding 677 Retail Housing Loans Affordable Housing 627 590 557 519 o Significant presence in our core geography o Currently offering HL product from 56 locations, Mar'23 Jun'23 Sep'23 Dec'23 Mar'24 significant headroom to expand within existing Di
Slide 21: CE & CV Loans
CE & CV Loans All Amounts in ₹ Crores Portfolio Outstanding 944 839 CV (New) CE (New) CV & CE (Used) 741 •89% of total •7% of total •4% of total 637 portfolio portfolio portfolio 560 Mar'23 Jun'23 Sep'23 Dec'23 Mar'24 o Lending primarily to small fleet operator segment Disbursements (3% YoY Growth)
Slide 22: Wholesale Lending
Wholesale Lending All Amounts in ₹ Crores Portfolio Break up (Mar-20) Portfolio Break up (Mar-24) WSL Mar-23 Mar-24 Portfolio O/s ₹1,547 ₹1,882 Rating Wise WSL FI Portfolio Business Started Business Business Break up Banking Group Banking in FY21 Share in Gross Banking Group 11% 10% 0% Loan Portfoli
Slide 23: Deposits Build-up
Deposits Build-up Deposits grew by 27% YoY; Retail Term Deposits grew 43% YoY Expanded General Banking Franchise significantly over last 3 year Targeting top-100 deposits districts of the country Focus on building retail franchise, reduced bulk deposits & top-20 deposits concentration 22
Slide 24: Deposits Trend & Composition
Deposits Trend & Composition All Amounts in ₹ Crores Deposits Trend Customer Base (in mn.) Growth led Deposits (27% YoY Growth) by RTDs 2.85 million 1.60 Total Deposit 101% 99% 1.39 18,000 95% 97% 94% 110% 1.29 Customers 1.25 1.18 1.25 17,000 100% 1.06 1.14 16,000 15,000 90% 17,473 0.86 0.94 14,000
Slide 25: Deposits Trend & Composition (Contd.)
Deposits Trend & Composition (Contd.) All Amounts in ₹ Crores Deposits Composition Decline in Concentration to Top 20 Depositors % 21% 19% 20% 20% 21% CASA 62% 62% 66% 68% 66% CASA + RTD 2,895 2,884 3,210 Institutional Term Deposits 29% 38% 38% 34% 32% 34% 21% Retail Term Deposits 18% 41% 46% 48% 46
Slide 26: Asset Quality Movement
Asset Quality Movement All Amounts in ₹ Crores Write off 67 82 92 49 91 Mar-24 Mar-23 Dec-23 Gross NPA % 2.5% 3.2% 3.0% PCR% 88.3% 89.8% 94.6% 93.8% 98.9% Net NPA % 0.0% 0.4% 0.2% 464 432 431 418 404 SMA 1 & 2 1.5% 1.4% 1.8% 1.9% 1.9% 353 316 267 51 44 206 197 22 29 4 Mar'23 Jun'23 Sep'23 Dec-23 Mar
Slide 27: Financial Performance
Financial Performance Stable & consistent financial performance Focus on cost efficiency resulting healthy cost income ratio Highest ever annual Operating Profit (pre-provision) of ₹997 crore Building floating provision to ensure resiliency 26
Slide 28: Enduring Profitability Metrics
Enduring Profitability Metrics Operating Profit & PAT – Quarterly Trend (₹ in crores) Operating Profit & PAT Y-o-Y (₹ in crores) Q4,FY24 PPoP YoY Growth up by 35% YoY 19% 997 282 838 221 238 256 YoY Growth 208 23% 160 498 134 114 116 405 107 Q4' FY23 Q1' FY24 Q2' FY24 Q3' FY24 Q4' FY24 FY23 FY24 Ope
Slide 29: Enduring Profitability Metrics (Contd.)
Enduring Profitability Metrics (Contd.) 2.5% 2.2% 54.1% / 11.9% 56.4% / 12.6% FY23 FY24 FY23 FY24 2.7% Credit cost 2.1% 2.3% at 1.4% for 56.5% 57.0% 56.5% 57.3% 54.7% 1.7% Q4, FY24, 1.1% excl. floating provision 10.0% 12.8% 13.9% 10.3% 13.5% created of ₹15 crore Q4'FY23 Q1'FY24 Q2'FY24 Q3'FY24 Q4'FY
Slide 30: Return on Equity during Covid Cycle
Return on Equity during Covid Cycle Covid Cycle RoE Additionally, built floating provision cushion during this period; ₹149 Average: 15.4% crore as on Mar-24 22.9% 20.5% 19.5% RoE back to pre- covid levels on higher capital base 10.1% 4.2% FY20 FY21 FY22 FY23 FY24 29
Slide 31: Break-up of other income
Break-up of other income ₹ 69 crore ₹ 83 crore ₹ 121 crore 24% 30% 28% 19% 18% 18% 42% 16% 6% 37% 40% 24% Q4'FY23 Q3'FY24 Q4'FY24 Loan Processing Fee PSLC Income Recovery from written off accounts General Banking & Other Income 30
Slide 32: CRAR & Tier 1
CRAR & Tier 1 All Amounts in ₹ Crores Particulars Mar-24 Mar-23 Dec-23 Risk Weighted Assets 12,994 10,106 11,720 Total Capital 2,932 2,086 2,717 Tier-I Capital 2,722 1,845 2,519 Tier-II Capital 210 241 198 CRAR 22.57%* 20.64% 23.18% Tier-I CRAR 20.95%* 18.25% 21.49% Tier-II CRAR 1.62% 2.39% 1.69% *P
Slide 33: Profit & Loss: Quarter and year ended March 31, 2024
Profit & Loss: For the quarter & year ended March 31 , 2024 st All Amounts in ₹ Crores Particulars Q4’FY24 Q4’FY23 Y-o-Y Q3’FY24 Q-o-Q FY24 FY23 Y-o-Y Limited INCOME Audited Audited Review Audited Audited Total Interest Earned 896 691 30% 806 11% 3,178 2,505 27% Less : Interest Expense 356 282 26% 3
Slide 34: Balance Sheet: As on March 31, 2024
Balance Sheet: As on March 31st, 2024 All Amounts in ₹ Crores March 31st, March 31st, December 31st, Particulars Y-o-Y Q-o-Q 2024 2023 2023 CAPITAL & LIABILITIES Audited Audited Limited Review Capital and Reserves 2,973 2,000 49% 2,808 6% Deposits 17,473 13,710 27% 15,111 16% Borrowings 1,995 2,349
Slide 35: Shareholding Pattern
Shareholding Pattern Bank Shareholders as on March 31st, 2024 Top 10 Shareholders as on March 31st, 2024 Utkarsh CoreInvest Limited Foreign Mirae Asset (Mutual Funds) Companies, Olympus ACF Pte. Ltd. NRIs Individuals & Triodos Sicav II - Triodos Microfinance Fund 8.0% Others responsAbility Participa
Slide 36: Diversified & Experienced Board
Diversified & Experienced Board Board Members of the Bank Parveen Kumar Gupta Ajay Kumar Kapur Part Time Non-Executive Chairman & Independent Director Independent Director • Certified Associate of the Indian Institute of Bankers • Previous associations with SBI as Managing Director & BoB • Previous
Slide 37: Leadership Complementing Bank's Strengths
Leadership Complementing Bank’s Strengths Senior Management Team Govind Singh - Managing Director & Chief Executive Officer • Over 25 years of experience in the banking and financial services sector and in particular the microfinance industry • Previously associated with Utkarsh CoreInvest (Bank’s P
Slide 38: Tech, ESG & CSR
Tech, ESG & CSR Technology Setup to support Physical Infrastructure and Digital Requirement Integrating ESG Sensitivities into our operations & decision- making Contributing to the well-being of the society 37
Slide 39: Technology Setup to support Physical Infrastructure and Digital Requirement
Technology Setup to support Physical Infrastructure and Digital Requirement P H Supporting extensive branch network of 888 Y ISO 27001 Certification for IT operation branches S I C Tab enabled feet-on-street for acquisition and Micro ATM for Cash Withdrawal in A collections Remote locations L Extens
Slide 40: Transformation Fueling Business Growth
Transformation Fueling Business Growth T R A Redesigning business process of retail asset and Invest on cloud platforms to improve agility N liability for higher productivity and scalability S F O R Automation and digitisation of operational API led Integration platform for internal and process and
Slide 41: Environment, Social & Governance
Environment, Social & Governance Environment Social Governance Practice is aligned Committed to give • Exclusion List • Service to • Diversified Board with the national due consideration to • Training and Bottom of • Board environmental & awareness pyramid independence E&S laws and social sensitivit
Slide 42: Awards & Accolades
Awards & Accolades Credit Modeling & Risk Team of the Year Award at the India Credit Risk Summit & Awards 2024 Most Preferred Workplace Most Trusted BFSI Brands by 2023-24 (BFSI Edition) by Team Marksmen Daily – Marksmen Daily 2023-24 41
Slide 43: Awards & Accolades (Contd.)
Awards & Accolades (Contd.) Best Customer Experience Strategy by India Customer Excellence (CX) Summit & Awards 2023 Employee Excellence 2023 Best Customer Experience at by the Times Group – ET 18th Annual Summit and EDGE Awards by ASSOCHAM – 2023 42
Slide 44: Utkarsh Welfare Foundation: CSR Initiatives
Utkarsh Welfare Foundation: CSR Initiatives SKILL & ENTERPRISE VILLAGE DEVELOPMENT OTHER PHILANTHROPIC FINANCIAL AWARENESS HEALTH INITIATIVES DEVELOPMENT PROGRAM PROGRAM ACTIVITIES Initiatives Lives Impacted Lives Impacted Lives Impacted Blood Donation Camps, Lives Impacted 14,90,000+ 42,200+ 17,400
Slide 45: Utkarsh Welfare Foundation: CSR Initiatives (Contd.)
Utkarsh Welfare Foundation: CSR Initiatives (Contd.) Financial Awareness Polyclinic Camps E-Clinics Digital Smart Classes Village Development Women Entrepreneurship Blood Donation Camps Health Awareness Program Learning Enhancement Agri Input Support Weavers Support Program Support to Old Age Home P
Slide 46: Disclaimer
Disclaimer Utkarsh Small Finance Bank Limited (also referred to as ‘Bank’). By attending a meeting where this presentation is made, or by reading this presentation material, you agree to be bound by following limitations: The information in this presentation has been prepared for use in presentation
Slide 47: Thank You
THANK YOU. ©) Utkarsh Small Finance Bank
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