Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — H1 FY2020 Earnings Presentation
43 slides from Au Small Finance Bank's earnings presentation, Oct 21, 2019
Slide 1: Exchange covering letter for investor presentation
Ref. No. AUSFB/SEC/2019-20/302 Date: 21st October, 2019 To, Listing Department Department of Corporate Services, National Stock Exchange of India Limited, BSE Limited, Exchange Plaza, Bandra Kurla Complex, Phiroz Jeejeebhoy Towers, Bandra (East), Mumbai 400051, Dalal Street, Mumbai 400001, Maharasht
Slide 2: Investor Presentation 1H / Q2FY20
Investor Presentation 1H / Q2FY20 A SCHEDULED BANK I FORTUNE INDIA 500 COMPANY Retail Focused I Differentiated I Well Capitalized I Fast Growing I Customer Centric October 2019
Slide 3: Table of Contents
Table of Contents 1. 1H / Q2FY20 Performance Summary and Key Updates 2. Retail Assets and Small & Mid Corporate Assets 3. Branch Banking 4. Treasury 5. Distribution Network 6. About AU Small Finance Bank 2
Slide 4: 1H / Q2FY20 Performance Summary and Key Updates
1. 1H / Q2FY20 Performance Summary and Key Updates 3
Slide 5: 1H / Q2FY20 Key Highlights
1H / Q2FY20 Key Highlights First 10 quarters of Bank - Building a Technology Led, Retail, Secured, Granular, Customer Centric and Diversified Franchise ❑ More than 14.50 lakh customers ❑ Loan AUM grew 38% y-o-y to INR 27,876 Crore and Deposits grew 72% y-o-y to INR 22,149 Crore ❑ ~79% retail loan pr
Slide 6: 1H / Q2FY20 Key Highlights
1H / Q2FY20 Key Highlights Growth on Track, Q-o-Q New Loan Spreads Improves Further ❑ 1HFY20 Disbursements grew 25% Y-o-Y led by ~44% Y-o-Y growth in all Retail Assets including Used Vehicle, SBL MSME as well as small ticket Business Banking and Agri SME loans; De-growth in Small & Mid Corporate Ass
Slide 7: 1H / Q2FY20 Key Highlights
1H / Q2FY20 Key Highlights 11 States 603 Touchpoints 14.5 lakh Customers 14,189 employees Loan Assets Under Total B/S Assets Disbursements1 Deposits3 CASA Ratio4 Management2 INR Crore INR Crore INR Crore INR Crore 35,826 8,754 27,876 22,149 16% 6,998 20,219 24,780 12,869 30-Sep-18 30-Sep-19 1HFY19 1
Slide 8: 1H / Q2FY20 Key Highlights
1H / Q2FY20 Key Highlights Total Income Net Interest Income PAT Net-worth INR Crore INR Crore INR Crore INR Crore 2,353 362 77 Income (pre- 3,516 tax) from Sale 847 71 Profit (after of part stake tax) from Sale 2,929 in Aavas 608 of part stake 291 in Aavas Financiers 2,275 Ltd. Financiers Ltd. 1,509
Slide 9: Consistent Profitability
Consistent Profitability RoA1 (%) RoE2 (%) 23.3%* 21.7%* 2.3%* 2.1%* *Including 8.6% 4.2% Profit from 0.9% 0.4% Sale of part stake in Aavas Financiers Ltd. 20.0% 17.5% 2.0% 1.7% 14.7% 1.6% 1.4% 1.6% 12.7% 12.9% Q2FY19 Q1FY20 Q2FY20 1HFY19 1HFY20 Q2FY19 Q1FY20 Q2FY20 1HFY19 1HFY20 ROA / ROE – Compone
Slide 10: Other Income
Other Income (All Figures in INR Crore) Q2FY19 Q1FY20 Q2FY20 Break-up of Other Income Unaudited Unaudited Unaudited Loan Assets Processing & Other fees 58 67 81 General Banking & Deposits related fees 11 17 15 Cross Sell, Distribution related fees & others 28 7 11 PSLC Premium / Fees 13 10 10 Income
Slide 11: Vertical-wise ROA for 1HFY20
Vertical-wise ROA for 1HFY20 Small & Mid Regulatory Retail Total Loan Branch Business Segments Corporate Total Assets Treasury Cost (CRR, Overall Assets Assets Banking Assets SLR & LCR) Loan AUM proportion 79% 19% 100% 100% - - - - Loan AUM Growth y-o-y 44% 14% 38% 38% - - - - PAT (INR Crore) 296 46
Slide 12: Stable Asset Quality
Stable Asset Quality Credit Cost - Net Impact on P/L Q2FY19 Q1FY20 Q2FY20 (All Figures in INR Crore) Unaudited Unaudited Unaudited Repossession Loss 5 7 7 POS Loss 1 2 2 Less: Bad Debt Recovery -10 -4 -6 Net Credit Loss -4 5 4 Net Credit Loss (as % of Avg. Total Assets) -0% 0.1% 0.04% Provision on N
Slide 13: Excess standard assets provision – 1HFY20
Excess standard assets provision – 1HFY20 Provision Particulars (₹ in Crores) GNPA Provision Coverage Ratio As on September 30, 2019 504 221 43.9% Excess standard assets provision on: - NBFC Portfolio @ 0.60% (maintained 1% instead of - 14 2.8% 0.40%) - Farm Credit and Micro & Small enterprises case
Slide 14: Well Capitalized
Well Capitalized (INR Crore) Sep-18^ Jun-19^ Sep-19^ Unaudited Unaudited Unaudited Total Risk Weighted Assets 15,459 19,512 20,310 Tier I Capital 2,660 3,031 3,027 Tier II Capital 87 591 602 Total Capital 2,747 3,622 3,629 CRAR 17.8% 18.6% 17.9% Tier I CRAR 17.2% 15.5% 14.9% Tier II CRAR 0.6% 3.0% 3
Slide 15: Profit & Loss Statement – 1HFY20 PAT grew 115% y-o-y
Profit & Loss Statement – 1HFY20 PAT grew 115% y-o-y (All Figures in INR Crore) 1HFY20 1HFY19 Y-o-Y Q2FY20 Q1FY20 Q-o-Q Q2FY19 Y-o-Y Unaudited Unaudited Unaudited Unaudited Unaudited Income Interest Earned 1,991 1,284 55% 1,033 957 8% 683 51% Interest Expended 1,144 676 69% 582 562 4% 362 61% Net In
Slide 16: Balance Sheet – Total Assets grew 45% y-o-y
Balance Sheet – Total Assets grew 45% y-o-y (All Figures in INR Crore) Sep 30, 2019 Sep 30, 2018 Y-o-Y Jun 30, 2019 Q-o-Q Unaudited Unaudited Unaudited Liabilities Capital 293 292 - 292 - Money received against Share Warrants 175 175 - 175 - Employees stock options outstanding 52 34 54% 49 8% Reserv
Slide 17: Marquee Shareholders Base – As on 30th Sep 2019
Marquee Shareholders Base – As on 30th Sep 2019 Shareholding Pattern Key Non-Promoter Shareholders (Holding above 1%) Holding Redwood Investment (Warburg Pincus) 6.9% Foreign Institutions Promoter & (FC, FPI, FII) & NRI Promoter Group - Temasek Holdings 4.8% (Non-repatriable), Domestic, 31.01% 41.19
Slide 18: Retail Assets and Small & Mid-Corporate Assets - Snapshot
2. Retail Assets and Small & Mid- Corporate Assets - Snapshot 17
Slide 19: Disbursements grew 25% Y-o-Y led by ~44% Y-o-Y growth in RAs
Disbursements grew 25% Y-o-Y led by ~44% Y-o-Y growth in RAs Strong growth in granular small ticket loans including in Used, MSME Disbursement, Business Banking and Agri SME (Amount in INR Crores except ATS) Retail Assets Small and Mid Corporate Assets Total New Used & Wheels SBL- GL+CD+ OD Agnst To
Slide 20: AUM Trends
AUM Trends AUM grew 38% Y-o-Y led by 44% Y-o-Y AUM growth in Retail Assets Small and Mid Corporate (Amount in INR Crores) Retail Assets Term Assets Lending Total New Used & Wheels SBL- GL+CD OD Agnst Total Retail Agri SMC by AUM Particulars Period HL REG BB NBFC Wheels CoW Total MSME +PL FD Assets S
Slide 21: Continuous Improvement in Spreads and Asset Quality
Continuous Improvement in Spreads and Asset Quality Improvement in AUM IRR Coupled with Drop in Cost of Funds On Total Retail Assets Small and Mid Corporate Assets AUM Cost of Total Spread New Used & Wheels SBL- GL+CD+ OD Agnst Agri SMC Funds Particulars Period HL Retail REG BB NBFC Wheels CoW Total
Slide 22: Loan Assets Cuts
Loan Assets Cuts Retail Assets – Growth Trajectory Outside of Rajasthan Amount in INR Crores 1HFY20 1HFY19 Y-o-Y Total Retail Assets Disbursements 6,968 4,834 44% Rajasthan Disbursements 2,734 1,984 38% Outside Rajasthan Disbursements 4,234 2,850 49% Overall Loan AUM - Geographically well diversifie
Slide 23: Wheels Book – Cuts
Wheels Book – Cuts Wheels AUM Break-up Wheels AUM Break-up – Vehicle Types 1% 1% 2% 13% 5% 5% 27% 6% 2% 2% 21% 10% 64% 20% 20% Cars MUVs SCVs New Used Cash on Wheels Trade Advance SUVs LCVs Tractor HCVs 3Ws Cons Eqip 2Ws TA to Dealers 22
Slide 24: REG Book – Granular, CF Focused
REG Book – Granular, CF Focused Successful Vintage of 6 Years of funding more than 31,000 units Year Cumulative # of Facilities Total Units Funded Cumulative NOCs Given Cumulative Cumulative Repayment O/S Started given / Projects Funded Across Projects Across All Projects Disbursements (INR Crore) (
Slide 25: NBFC Book – Seasoned and Diversified
NBFC Book – Seasoned and Diversified NBFC Lending spread across varied asset classes – substantially Asset Finance Co’s Cautious Approach – Constant Book, Asset Quality Maintained No. of POS Deposits ❑ NBFCs having RE book have a POS of ~INR 108 Crore i.e. ~0.4% of NBFC Type % Mix the loan AUM; it i
Slide 26: Branch Banking - Snapshot
3. Branch Banking - Snapshot 25
Slide 27: Branch Banking - Snapshot
Branch Banking - Snapshot Growing Deposit Franchise; CASA Ratio of 16% 40% of the Term Deposits are non- callable [Bulk TD – 59% non-callable] CASA RATIO (%) CASA RATIO (%) CASA RATIO (%) Total Deposit Growth 20,606 26% 19% 18,060 16% 17,275 14,656 Y-o-Y Q-o-Q 10,798 72.1% 11.6% 7,997 2,402 2,638 2,
Slide 28: Focused on Building A Granular Retail Deposit Franchise
Focused on Building A Granular Retail Deposit Franchise Increasing Share of Retail in Savings Account (SA) Retail SA Bulk SA 2,508 2,638 2,611 18% 2,402 2,441 11% 11% 18% 15% 25% 16% 89% 82% 85% 75% 84% 30-Sep-18 31-Dec-18 31-Mar-19 30-Jun-19 30-Sep-19 Increasing Share of Retail in Term Deposits (TD
Slide 29: Branch Banking – Deposit profile
Branch Banking – Deposit profile 1 1 Area-wise Deposit Distribution Diversified Deposit Build-up across States Punjab Based on Delhi 10% 13% Deposit 13% Himachal Pradesh Amount 5% Gujarat 23% 5% 38% Madhya Pradesh Based on 4% No. of Deposit Haryana 30% A/c’s Rajasthan 57% 3% 24% Goa Uttar Pradesh 1%
Slide 30: Treasury - Snapshot
4. Treasury - Snapshot wet set ae 29
Slide 31: Diversified Liabilities Portfolio
Diversified Liabilities Portfolio Increasing proportion of Deposits further diversifying the funding profile Funding Source 30-Sep-18 31-Dec-18 31-Mar-19 30-Jun-19 30-Sep-19 Deposits + Borrowings (INR Crore) 20,699 23,513 28,036 28,856 30,732 Deposits 62.2% 62.4% 69.3% 68.8% 72.1% Refinance from FIs
Slide 32: Cost of Funds and Treasury Updates
Cost of Funds and Treasury Updates Stable cost of funds1 Incremental Funds2 raised & its Cost INR Crore Avg. Cost of Funds 7.3% 7.5% 8.0% Incremental 7.9% 7.9% Funds Raised 7.8% 7.8% 14,190 9,658 Incremental Cost of Funds Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 1HFY19 1HFY20 Treasury Update ▪ Gradually d
Slide 33: Distribution Network
5. Distribution Network wet set ae 32
Slide 34: Well entrenched contiguous distribution franchise
Well entrenched contiguous distribution franchise 428 Branches1, 97 BCs, 14.5 lakh 5,92,929 Active Loan A/c’s & 14,189 16% CASA 11 States 565 ATMs1 78 Asset Centers Customers 12,62,363 Deposit A/c’s employees Ratio2 Deep Penetration into Core States and Expansion into other States Metro- Rural Urban
Slide 35: Digital Channels
Digital Channels Near 100% TAB based paperless onboarding Increasing Digital Channel Usage; More than 1.5 lakh Internet & Mobile Banking Users 91% 98% 500,000 100% 455,533 10,000 4,000 24 160,000 86% 87% 87% 450,000 9,000 21 140,000 90% 386,908 3,500 400,000 80% 8,000 17 120,000 1,10,958 3,000 1,02,
Slide 36: About AU Small Finance Bank
6. About AU Small Finance Bank 35
Slide 37: AU BANK – tapping the unreached and unbanked segments
AU BANK – tapping the unreached and unbanked segments Overview Focused on Retail Financing with Diversified Portfolio • AU SMALL FINANCE BANK (“AU BANK” or “Company”) is a scheduled commercial bank Gross AUM of INR 27,876 crore which successfully transited from an Asset Financing NBFC to an SFB; sta
Slide 38: Vision & Mission
Vision & Mission AU Vision AU Mission • To be the world’s most trusted retail bank and To build one of India’s largest retail franchise that is coveted employer admired for: • That is admired as the epitome of financial • Making every customer feel supreme while being inclusion and economic success,
Slide 39: AU Journey - natural progression to Bank
AU Journey - natural progression to Bank FY96 to FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 INR 1000 Crore Fund Manager Investment by Channel Partner Temasek Holdings NBFC – Asset Finance Company Small Finance Bank CA, SA, Deposits, Lockers, Payments & Only
Slide 40: Experienced Board of Directors
Experienced Board of Directors Mr. Mannil Venugopalan Mr. Krishan Kant Rathi Ms. Jyoti Narang Mr. Raj Vikash Verma Chairman and Independent Director Independent Director Independent Director Independent Director 47+ years of experience 29+ years of experience 37+ years of experience 35+ years of exp
Slide 41: 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 42: THANK YOU
THANK YOU Contact for Investor queries: Sunil Parnami / Hemant Sethia AU Small Finance Bank Ltd Tel: +91 22 6249 0607 / +91 22 6249 0614 Email: investorrelations@aubank.in 41
Slide 43: Abbreviations
Abbreviations ADC Alternate Delivery Channels NII Net Interest Income AFS Available for Sale NPA Non Performing Assets ALM Asset Liability Management NSE National Stock Exchange AUM Asset Under Management OPEX Operating Expenses BSBDA Basic Savings Bank Deposit A/C P/L Profit & Loss Statement BSE Bo
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