Fino Payments Bank Ltd. · NSE:FINOPB
Fino Payments Bank — Q1 FY23 Earnings Presentation
51 slides from Fino Payments Bank's earnings presentation, Jul 27, 2022
Slide 1: Exchange intimation letter for investor presentation
July 27, 2022 BSE Limited National Stock Exchange of India Limited Corporate Relationship Department, Exchange Plaza, 5th Floor, 2nd Floor, New Trading Wing, Plot No. C/1, G Block, Rotunda Building, P.J. Towers, Bandra - Kurla Complex, Dalal Street, Mumbai- 400 001 Bandra (E), Mumbai - 400 051 (Scri
Slide 2: Q1FY23 Board Presentation
Q1FY23 Board Presentation 27th July 2022
Slide 3: Table of Contents
Table of Contents Strategic Overview Q1FY23 Highlights Q1FY23 Financial Performance Product Strategy and Performance Trends Understanding Fino’s Products
Slide 4: Strategic Overview
Payments Bank frit Ode dan . FINO Strategic Overview
Slide 5: Fino's Solutions for Common Man's Problem
Fino’s Solutions for Common Man’s Problem FINO 1.0 FINO Payment Bank I want to I want to I want to I want to add to my send Money keep my gain status business Home money safe Direct Remittance in society Doorstep Banking I want to book train I want to Tickets Micro ATM/Debit Card withdraw I want to
Slide 6: Driving Social Transformation: Touching Lives
Driving Social Transformation: Touching Lives REMOVE BANKING GENERATE RURAL IMPROVE QUALITY COMFORT TO CASH BARRIERS EMPLOYMENT OF LIFE CUSTOMERS DIGITALIZATION The vast Phygital Second income opportunity Customers use time Lower need for cash Last mile cash digitalisation- network brings banking as
Slide 7: Presence in both the Eco-system: Physical and Digital
Presence in both the Eco-system: Physical and Digital Option 1 – Physical: Merchants as Bankers Option 2 – Digital: FINO App o Merchants points and banking points; financial services is an add on product o Customers can access Fino Products directly o A typical Fino merchant could be a kinara throug
Slide 8: Business Model of Fino Payments Bank
Business Model of Fino Payments Bank Conversion ratios of customers within the financial services funnel on a steady path of incline Average Revenue per Customer in a year o Unlock opportunities to convert more account holders into digital users o The trust equity built from the merchant ecosystem g
Slide 9: Customer Lifecycle Journey
Customer Lifecycle Journey Convert an off-us customer to an on-us customer and then transform him into a high value digital customer Customers start transacting with Fino Bank All the factors lead to better account renewal ratios 8 3 4 Beginning of financial journey with Fino Bank – pays ₹470- Targe
Slide 10: Management Focus and Strategy
Management Focus and Strategy Differentiated allocation of management focus basis the stage of product lifecycle GROWTH PRODUCTS – CASA & CMS Incremental enablers across the growth products to further boost the Bank level blended growth Growth Continues; Revenue contribution increasing MATURE PRODUC
Slide 11: The Digital 2.0 Roadmap
The Digital 2.0 Roadmap Transition from a phygital focused Fino 1.0 to an end-to-end digital Fino 2.0 Investing in Digital Infrastructure; Digital Throughput increasing Fino 1.0 FinoPay App Fino 2.0 Digital DTP model – Distribution, Focus on more app downloads BAAS platform to directly Creat
Slide 12: Highlights in Q1FY23
Payments Bank frit Ode dan . FINO Highlights in Q1FY23
Slide 13: Another First!
Another First! Sequential Revenue Growth in Q1 over Q4 for the first time in the history of Fino Payments Bank Achieved Topline of INR 1,000 cr in FY22 Q1 performance surpasses Q4 (a seasonally stronger quarter) despite challenging operating environment Some of the macro headwinds during Q1 in gener
Slide 14: The Key Growth Drivers
The Key Growth Drivers Sequential Revenue Growth in Q1 over Q4 for the first time in the history of Fino Payments Bank Customer Trust-Built and Acquisition Phase Ongoing 16% 20% 15% 22% 5% 8% 12% 11% 2% 20% 4% 27% Foundation of 2.0 6% 14% 3% 6% journey FY20 33% FY21 FY22 Q1FY23 6% 37% 7% 32% 8% 51%
Slide 15: Industry Leading Performance Highlights in Q1FY23
Industry Leading Performance Highlights in Q1FY23 Demonstrating strong growth in business volumes, revenue and profitability Highest Ever (ex- digital) Throughput of ₹ 50,000 crore! 25 Cr ₹60,784 Cr* 11.4 lac 6.2 lac Transactions on Fino platforms Total Throughput Registered merchants on Fino Accoun
Slide 16: Revenue and Margins on Own and Open Banking Channels
Revenue and Margins on Own and Open Banking Channels Strong margins in own banking channel and high revenue growth in open banking channel Own Banking Channel Open Banking Channel ₹105.38 Cr 6% Revenue in Q1FY23 Transaction Revenue (excl BC Banking) ₹289.05 Cr ₹73.97 Cr Transaction Revenue (incl BC
Slide 17: Key Financial Ratios
Key Financial Ratios Operating leverage leading to consistent rise in PAT Margins even with a stable Take Rate & declining Gross Margins Take Rate (ex. UPI throughput) Blended Gross Margins PAT Margins 0.56% 0.53% 34.3% 3.5% 30.3% 1.5% Q1FY22 Q1FY23 Q1FY22 Q1FY23 Q1FY22 Q1FY23 Take rate improved in
Slide 18: Product Portfolio: Diversified Offerings to meet Various Customer Needs
Product Portfolio: Diversified Offerings to meet Various Customer Needs Product Throughput (Cr) Revenue (Cr) Margin Remarks Low margin hook product that attracts customer DMT 12,345 107 6% footfalls to Fino ecosystem primarily in the urban 67% geographies MATM 5,280 31 49% (incl one time) (24%) Cash
Slide 19: PAT lower due to expensing of digital investments
PAT lower due to expensing of digital investments Profit After Tax (in ₹ cr) PAT for Q1FY23 at 17.62 14.10 ₹10.10 Cr 6.52 7.58 7.89 10.10 4.52 223% growth over Q1FY22 3.13 1.85 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Return on Equity Primary proceeds from IPO completely 20.66%
Slide 20: Digital Throughput is a Material Growth Driver Now
Digital Throughput is a Material Growth Driver Now The pathway to a 2.0 journey is seamlessly getting created by traction in digital throughput Q1FY23 Throughput Mix Digital Throughput Growth 285% 51,343 , 84% 9,441 , 16% 9,441 2,453 Physical Digital Q1FY22 Q1FY23 Digital throughput is currently non
Slide 21: Expanding Reach: Growing Distribution Network
Expanding Reach: Growing Distribution Network TOTAL MERCHANTS MERCHANT COUNT HEAT-MAP 1,142,061 1,020,527 866,034 808,563 724,671 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Merchant Count As on 30.06.2022 YoY Growth Total Merchants 11,42,061 58% Own Channel Merchants 5,36,722 46% Open Banking Merchants 6,05
Slide 22: Q1FY23 Financial Performance
Q1FY23 Financial Performance 21
Slide 23: Bank Level Profit & Loss
Bank Level Profit & Loss Revenue growth of 40% in Q1FY23 leading to a YOY PAT growth of 223% Particulars Q1FY23 Q4FY22 Q1FY22 YOY FY22 (in ₹ cr) Revenue 289.05 285.29 206.24 40% 1,008.85 Product Cost 201.51 195.81 135.48 49% 680.94 Net Revenue 87.54 89.48 70.76 24% 327.92 Operating Cost 63.97 60.06
Slide 24: Balance Sheet
Balance Sheet Particulars (in ₹ cr) As at 30th June 2022 As at 31st March 2022 Capital and Liabilities Capital 83.21 83.21 Reserves & Surplus 403.53 396.62 Deposits 581.53 500.69 Borrowings 581.18 249.66 Other Liabilities and Provisions 440.37 449.82 Total 2,095.82 1,680.00 Assets Cash and balances
Slide 25: Revenue Mix Across Parameters in Q1FY23
Revenue Mix Across Parameters in Q1FY23 Income Breakup: Transaction & Subscription Income Breakup: Own and Open Banking Channel 31% 21% Q1FY22 79% 69% 38% 25% Q1FY23 75% 62% Transaction Income Subscription, On-boarding & Other Income Own Banking Channel Open Banking Channel 24
Slide 26: Revenue Mix Across Products
Revenue Mix Across Products CMS & CASA occupy 21.4% of the revenue pie in Q1FY23 vis-à-vis 14.9% as compared to Q1FY22 – these two are also the high growth and high margin products 40% Total Bank Level Revenues 206.24 289.05 (in ₹ cr) 5.3% 8.4% 18.6% 10.9% 31.0% 37.0% 11.3% 12.1% 18.9% 10.1% 7.2% 6.
Slide 27: Product Strategy & Performance Trends
Product Strategy & Performance Trends 26
Slide 28: CASA and Debit Card
CASA and Debit Card Subscription based account opening now unlocking the potential of annuity through renewals Renewal income growth in Q1FY23 was 379% YOY and 26% sequentially leading to an exponential growth in our annuity business Revenue (INR Crore) 19.4 Accounts opened as on 30th June 2022 at 5
Slide 29: Cash Management Services
Cash Management Services Strong potential of cash digitization in India continuing to reflect on sustained growth in CMS Throughput more than doubled YOY to grow at 101% in Q1FY23 Revenue (INR Crore) No. of partners on CMS up from 131 as on 31st March 2022 to 152 as on 30th June 2022 20.9 Throughput
Slide 30: AEPS
AEPS Demonstrating robust growth in a faster growing market in the cash withdrawal space Revenue (INR Crore) The AEPS industry was 5x the size of micro-ATM industry in Q1FY23 The AEPS industry grew by 28% YOY in Q1FY23 wherein the throughput of Fino ecosystem 33.6 grew by 42% YOY – helping Fino to i
Slide 31: Micro-ATM
Micro-ATM Mainstay for Customer Acquisition Continue to be the dominant player in the Industry - Cumulative market share of Top 5 Revenue (INR Crore) players 82% as of April’22 – Fino’s share in Micro-ATMs is more than that of the top banks like HDFC Bank, SBI, Kotak, IDFC 22.9 19.4 Competitors aggr
Slide 32: Remittance
Remittance The primary hook product in to the Fino ecosystem Remittance is the hook product that attracts footfall into the Fino ecosystem Revenue (INR Crore) Fino is one of the early movers in the remittance product and is still a market leader 67% YOY growth in revenue as well as throughput in Q1F
Slide 33: Strong Growth Outlook
Strong Growth Outlook Customer Ownership: Foundation of Fino 2.0 where we can move up the relationship value chain Digital: 33% active accounts on digital validate our 2.0 platform approach CMS: B2B business with strong potential – Doubled throughput in Q1FY23 on the back of marquee partner addition
Slide 34: Thank You
Payments Bank frit Ode dan . FINO Thank You
Slide 35: Annexures
Payments Bank frit Ode dan . FINO Annexures
Slide 36: Current and Savings Account (1/2)
Current and Savings Account (1/2) Defining the problem statement, customer segment, potential and market size opportunity Use Case: A bank branch in tier 3 and below city is generally very crowded and is far away. It is also open during limited banking hours on weekdays. Through Fino Bank, the idea
Slide 37: Current and Savings Account (2/2)
Current and Savings Account (2/2) Understanding the process flow of an account opening Fino Merchant Portal 2 Revenue source Subscription Fee Merchant charged to Customer 1 3 1 Customer approaches a merchant for account opening Customer 2 Merchant seeks various customer details and enters in the Fin
Slide 38: CASA and Debit Cards
CASA and Debit Cards A high margin-high growth product now showing robust annuity income through subscription renewal (in lacs) Accounts Opened Subscription Revenue (in ₹ cr) 25 55 20.2 20.9 20 19.35 45 16.7 45.9 35.2 15 15.0 35 11.3 29.0 12.1 13.36 11.1 10.6 25 10 7.7 8.4 8.4 7.9 5.9 6.2 6.2 25.7 3
Slide 39: Cash Management Services (1/2)
Cash Management Services (1/2) Defining the problem statement, customer segment, potential and Fino’s business value Use Case: Companies which collect cash from their customers need to deposit the same at a bank branch for money in the account. They do the same at a nearest Fino merchant point. This
Slide 40: Cash Management Services (2/2)
Cash Management Services (2/2) Understanding the process flow of a CMS transaction 3 Revenue source Merchant Account with 2 Fino Bank Fee Income from B2B partners Customer’s bank account Merchant 1 1 Delivery agent/ collection agent/ customer visits merchant point with cash that they need to pay the
Slide 41: Cash Management Services
Cash Management Services Accelerated growth path helped by aggressive partner on-boarding (in ₹ cr) Throughput (in ₹ cr) Revenue Take Rate 20.9 9,171 18.1 7,864 14.3 0.29% 0.28% 6,074 12.9 13.0 0.27% 5,389 11.4 0.24% 0.25% 0.24% 0.24% 0.23% 0.23% 10.3 4,510 4,558 3,830 2,622 6.3 866 2.5 Q1FY21 Q3FY2
Slide 42: Micro-ATM (1/2)
Micro-ATM (1/2) Defining problem statement, customer segment, potential and Fino’s business volume and value Use Case: Beyond the metro and tier 1 cities, ATM penetration is low. Customers have to travel a distance to withdraw cash. The genesis of micro- ATM is to facilitate convenient cash withdraw
Slide 43: Micro ATM (2/2)
Micro ATM (2/2) Understanding the process flow of an MATM transaction 3 Merchant Account with 2 Fino Bank Customer’s bank account 4 Merchant 1 1 Customer shares his debit card to the merchant 5 Merchant inserts the card in his/ her micro-ATM handheld device – 2 device is connected to network and als
Slide 44: AEPS (1/2)
AEPS (1/2) Defining problem statement, customer segment, potential, market size and Fino’s business value Use Case: Customers often don’t carry their ATM cards with them. Many at the bottom of the pyramid may not even have an ATM card. Most ATM kiosks will not be suitable for such customers – they h
Slide 45: AEPS (2/2)
AEPS (2/2) Understanding the process flow of an AEPS transaction 3 Merchant Account with 2 Fino Bank Customer’s bank account 4 Merchant 1 1 Customer gives his fingerprint on bio-authentication device of the merchant 5 2 The device is connected to network and also to the merchant portal of Fino Custo
Slide 46: Micro-ATM & AEPS
Micro-ATM & AEPS A high margin-moderate take rate product where the one-time income implies first mover advantage (in ₹ cr) Throughput (in ₹ cr) Revenue Transaction Take Rates 53.0 16,237 45.5 47.8 46.2 46.8 46.6 44.4 42.5 43.3 15,203 0.34% 14,308 14,655 14,356 14,221 0.33% 0.33% 0.33% 0.33% 0.33% 1
Slide 47: Remittance (1/2)
Remittance (1/2) Defining problem statement, customer segment, potential, market size and Fino’s business value Use Case: Customers having cash with them can visit a merchant point to transfer the same to a bank account on the beneficiary side. Remittance is essentially a cash digitizing product whe
Slide 48: Remittance (2/2)
Remittance (2/2) Understanding the process flow of a remittance transaction 3 Merchant Credit in Account with beneficiary 2 Fino Bank bank account Merchant 1 Customer pays cash to the merchant for transfer to beneficiary account – separate charges for transaction is also paid by customer to merchant
Slide 49: Remittance
Remittance A low margin-high take rate product that attracts more customers into Fino’s ecosystem (in ₹ cr) Throughput (in ₹ cr) Revenue Take Rate 105.9 103.4 107.0 0.89% 0.88% 12,236 11,966 12,345 84.3 86.0 81.9 0.85% 0.86% 0.86% 0.87% 0.87% 0.86% 0.87% 9,426 9,826 9,449 7,412 63.9 6,391 54.9 3,543
Slide 50: Open Banking Platform (1/2)
Open Banking Platform (1/2) Defining the problem statement, customer segment, potential and market size opportunity Use Case: Fintech players offering various payment products require a bank at the back-end to process a transaction. Being a bank, Fino can offer its technology platform to such fintec
Slide 51: Open Banking Platform (2/2)
Open Banking Platform (2/2) Understanding the process flow of a remittance transaction 1 2 3 Customer of Open Merchant of Open Open Banking Fino’s Technology Banking partner Banking partner partner Platform 1 Customers visit the merchant points of the Open Banking partner (API partners) 2 Merchant u