Creditaccess Grameen Ltd. · NSE:CREDITACC
Creditaccess Grameen — Q3 FY24 Earnings Presentation
40 slides from Creditaccess Grameen's earnings presentation, Jan 19, 2024
Slide 1: Exchange filing cover letter
Ref: CAGL/EQ/2023-24/135 January 19, 2024 To BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, C-1, Block G Dalal Street Bandra Kurla Complex Bandra (East), Mumbai - 400001 Mumbai - 400051 Scrip code: 541770 Symbol: CREDITACC Dear Sir/Madam, Sub.: Investo
Slide 2: CreditAccess Grameen Limited Q3 & 9M FY24 Investor Presentation
CreditAccess Grameen Limited Q3 & 9M FY24 Investor Presentation January 2024 www.creditaccessgrameen.in
Slide 3: Disclaimer
Disclaimer By accessing this presentation, you agree to be bound by the following terms and conditions. This presentation (which may reflect some price-sensitive information in terms of SEBI regulations and Companies Act, 2013, as amended from time to time) has been prepared by CreditAccess Grameen
Slide 4: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 3
Slide 5: Q3 FY24: Key Business Highlights
Q3 FY24: Key Business Highlights Robust Business Momentum, Sustainable Operating Profitability, Best In Class Asset Quality • Achieved major milestone in the 25th year of business - Q3 FY24 YoY% QoQ% INR 1,049 Cr PAT in 9M FY24, higher than INR 826 Cr PAT in GLP (INR Cr) 23,382 +31.5% +4.0% FY23 Bor
Slide 6: Customer Growth Led By Robust Additions & High Retention
Customer Growth Led By Robust Additions & High Retention Robust Borrower Additions Borrower Vintage Borrowers (‘000) Q3 FY24 56% 27% 17% 153 Q2 FY24 55% 28% 17% 578 1,486 Q1 FY24 52% 32% 16% 4,693 Q4 FY23 47% 36% 17% 3,939 Q3 FY23 48% 34% 18% Q3 FY23 Addition Write-off Attrition Q3 FY24 < 3 years 3-
Slide 7: Successful Completion of Core Banking Solution Upgrade
Successful Completion of Core Banking Solution Upgrade Temenos Core Banking Solution Upgrade Project Temporary Impact on Business Momentum • Successful completion of CBS upgrade without any significant impact on the business operations Monthly Disbursement (INR Cr) 2,247 • Focus on process stabiliza
Slide 8: Asset Quality Update (1/2)
Asset Quality Update (1/2) PAR Trend PAR Movement 1.8% 1.5% 1.2% 1.3% 1.2% 1.1% 1.2% 1.2% 0.2% 1.1% 1.0% 0.9% 1.0% 0.8% 0.7% 1.0% 1.8% 0.7% 0.6% 0.8% 1.5% Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 PAR Fresh PAR Write-off TN Flood PAR PAR 0+ PAR 30+ PAR 60+ PAR 90+ Mar-23 Accretion Impact Dec-23 Business As Us
Slide 9: Asset Quality Update (2/2)
Asset Quality Update (2/2) Q3 FY24 (INR Cr) Consolidated Credit Cost (INR Cr) Q3 FY24 9M FY24 Asset Classification (dpd) EAD EAD% ECL% Opening ECL - (A) 343.2 347.8 Stage 1 0 – 15 (GL), 0 – 30 (RF) 22,383.5 98.6% 0.9% Additions (B) Stage 2 16 – 60 (GL), 31 – 90 (RF) 95.9 0.4% 54.7% - Provisions as p
Slide 10: Comfortably Placed to Maintain Healthy NIMs
Comfortably Placed to Maintain Healthy NIMs Key Metrics Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Avg. New Disbursement Interest Rate % 21.5% 21.9% 21.9% 22.0% 21.8% Portfolio Yield % 19.6% 19.7% 20.7% 21.1% 21.0% Weighted Avg. Cost of Borrowing % 9.6% 9.5% 9.6% 9.8% 9.8% Marginal Cost of Borrowing %
Slide 11: Performance Vs. Annual Guidance
Performance Vs. Annual Guidance Initial Revised 9M FY24 Key Indicators Variance FY24 Guidance FY24 Guidance Performance • YoY growth is higher on a low GLP Growth % 24.0% - 25.0% 24.0% - 25.0% 31.5% base of 9M FY23 • Superior asset quality leading to minimal interest reversals • Strong control on co
Slide 12: Awards & Recognition
Awards & Recognition Microfinance Organisation of the Year: Best Small NBFC 2023: Global Inclusive Finance Summit 2023 Mint BFSI Summit & Awards www.creditaccessgrameen.in 11
Slide 13: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 12
Slide 14: Q3 FY24: Key Performance Highlights
Q3 FY24: Key Performance Highlights NIM Cost/Income Ratio GLP Disbursements 13.1% 29.5% PPOP INR 23,382 Cr INR 5,344 Cr INR 602 Cr (+31.5% YoY) (+10.3% YoY) Wgtd. Avg. COB Opex/GLP Ratio (+58.6% YoY) 9.8% 4.4% ROA CRAR Total Total Equity GNPA: 0.97% PAT 5.5% 24.5% INR 6,169 Cr INR 353 Cr NNPA: 0.29%
Slide 15: 9M FY24: Key Performance Highlights
9M FY24: Key Performance Highlights NIM Cost/Income Ratio GLP Disbursements 13.0% 30.7% PPOP INR 23,382 Cr INR 15,081 Cr INR 1,708 Cr (+31.5% YoY) (+32.7% YoY) Wgtd. Avg. COB Opex/GLP Ratio (+70.2% YoY) 9.7% 4.5% ROA CRAR Total Total Equity GNPA: 0.97% PAT 5.6% 24.5% INR 6,169 Cr INR 1,049 Cr NNPA:
Slide 16: Q3 & 9M FY24: P&L Statement
Q3 & 9M FY24: P&L Statement Profit & Loss Statement (INR Cr) Q3 FY24 Q3 FY23 YoY% Q2 FY24 QoQ% 9M FY24 9M FY23 YoY% FY23 Interest Income 1,244.4 854.8 45.6% 1,187.4 4.8% 3,536.9 2,362.3 49.7% 3,327.1 - Interest on Loans 1 1,220.0 837.6 45.7% 1,165.9 4.6% 3,472.1 2,327.3 49.2% 3,277.4 - Interest on D
Slide 17: Q3 & 9M FY24: Balance Sheet
Q3 & 9M FY24: Balance Sheet Balance Sheet (INR Cr) Q3 FY24 Q3 FY23 YoY% Q2 FY24 QoQ% 9M FY24 9M FY23 FY23 Cash & Other Bank Balances 1,168.5 1,001.2 16.7% 1,408.3 -17.0% 1,168.5 1,001.2 1,436.4 Investments 1,390.2 438.3 217.2% 740.5 87.7% 1,390.2 438.3 454.5 Loans - (Net of Impairment Loss Allowance
Slide 18: Continued Business Traction with Rural Focus
Continued Business Traction with Rural Focus Gross Loan Portfolio (INR Cr) Borrowers (‘000) 31.5% 19.2% 23,382 22,488 4,603 4,693 21,814 21,031 4,423 4,264 3,939 17,786 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 www.creditaccessgrameen.in 17
Slide 19: Consistent Growth in Infrastructure
Consistent Growth in Infrastructure Branches 9.7% 1,877 1,894 1,786 1,826 1,727 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Employees Loan Officers 13.3% 14.0% 19,241 19,041 13,336 13,054 16,807 16,759 17,391 12,044 11,453 11,490 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3
Slide 20: Robust Quarterly Performance Trend (1/2)
Robust Quarterly Performance Trend (1/2) Disbursements (INR Cr) Total Income (INR Cr) 10.3% 1,248 1,295 1,171 1,066 7,171 910 4,966 5,344 4,847 4,771 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Margin Analysis (%) Operating Efficiency (%) 20.7% 21.1% 21.0% 5.0% 19
Slide 21: Robust Quarterly Performance Trend (2/2)
Robust Quarterly Performance Trend (2/2) NII, PPOP, PAT (INR Cr) Asset Quality (%) 763 772 802 690 2.04% 1.78% 1.81% 566 1.59% 1.60% 602 1.71% 503 544 563 1.21% 379 0.89% 0.97% 1.34% 0.77% 297 348 347 353 0.96% 216 0.70% 0.75% 0.60% Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2
Slide 22: Stable Operational Efficiency
Stable Operational Efficiency GLP / Branch (INR Cr) GLP / Loan Officer (INR Cr) 11.9 12.0 12.3 1.8 1.8 1.8 11.8 1.7 10.3 1.6 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Borrowers / Branch Borrowers / Loan Officer 2,422 2,453 2,478 371 367 360 2,281 2,388 344 345 Q
Slide 23: Product Range To Meet Diverse Customer Needs
Product Range To Meet Diverse Customer Needs GLP - Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Product Mix (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total IGL 17,054 96% 20,090 96% 20,670 95% 21,103 94% 21,800 93% Family Welfare 125 0.7% 67 0% 148 1% 1
Slide 24: Well Diversified Presence Across India
Well Diversified Presence Across India Our Presence as on Dec-23 Uttar Pradesh 84 Branch Network Q3 FY24 % Share Q3 FY23 % Share 16 States & 1 UT Karnataka 337 17.8% 308 17.8% 367 Districts Bihar Maharashtra 311 16.4% 300 17.4% 1,894 Branches 148 Tamil Nadu 384 20.3% 378 21.9% West Bengal Madhya Pra
Slide 25: Progressing Well on Liability Strategy
Progressing Well on Liability Strategy Diversified Liability Mix - Institution / Instrument Wise (%) Focus on dynamic liability management NBFCs - TL FIs - TL • Focus on long-term funding with strong diversification between domestic 2.6% 13.1% & foreign sources MLD • Target to meet funding requireme
Slide 26: Stable Liquidity/ ALM Position/ Credit Ratings
Stable Liquidity/ ALM Position/ Credit Ratings Static Liquidity / ALM Position For the Month For the Financial Year Debt Diversification Q3 FY24 Particulars (INR Cr) Jan-24 Feb-24 Mar-24 Jan-24 – Mar-24 FY25 Total Drawdowns 3,317 Opening Cash & Equivalents (A) 2,486.5 2,829.0 3,382.5 3,658.6 4,830.8
Slide 27: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 26
Slide 28: Committed to Basics Through Classical JLG Lending Model
Committed to Basics Through Classical JLG Lending Model Microfinance loans are unsecured. JLG mechanism acts as security/ loan collateral Fully aligned with new harmonized guidelines in terms JLG Benefits: of - ✓ Strong group bonding ✓ Formulation of Board approved policies ✓ Mutual support – both f
Slide 29: Focus on Customer Centricity, Loyalty & Retention
Focus on Customer Centricity, Loyalty & Retention “One of the Lowest Cost Organised Financer” - One Stop Shop providing Support to Various Lifecycle Needs of the Customer One of the lowest lending rates in MFI industry Loan Customer Centric Ticket Size Tenure Purpose Type Products (INR) (months) Div
Slide 30: Calibrated Expansion Through Contiguous District-Based Approach
Calibrated Expansion Through Contiguous District-Based Approach Systematic geography selection based on the availability of infrastructure, competition, historical performance trend, social/ CA Grameen’s contiguous economic/ political/ climate risk, growth potential district-based expansion Ensures
Slide 31: Unique Human Capital, Internal Audit & Risk Management
Unique Human Capital, Internal Audit & Risk Management Well-Established Operational Structure Multi-Pronged Approach For Risk Management Sound Understanding of Business Heads Rural Market Internal Audit (IA): • ~90% of employees are hired fresh • IA frequency – 8 times in a year at branches, 4 times
Slide 32: Strong Internal Control Structure: Three Lines Of Defence
Strong Internal Control Structure: Three Lines Of Defence 3rd line of defence: Internal Audit team 2nd line of defence: Risk team 1st line of defence: Field & Quality Control teams Zonal Manager / State Head Zonal Manager handles 100 – 120 branches Regional / Divisional Regional Manager handles 40-5
Slide 33: Continuous Technology Enhancement to Drive Operational Efficiency
Continuous Technology Enhancement to Drive Operational Efficiency Ensures Quick And Seamless Delivery of Need Based Financial Products and Services backed by Robust Technology Infrastructure High touch-high tech delivery model: Future Upgrades & Investments • Digitized all customer touchpoints • Inv
Slide 34: Integrating Risk Management in Every Operating Process
Integrating Risk Management in Every Operating Process Microfinance is a Collection Business, hence Risk Management is Integral to Core Strategy and Operating Processes Contiguous Customer Employee Target Customer Customer Employee District-based Lending Model Engagement Incentive Segment Due-Dilige
Slide 35: Cross Cycle Business Resiliency
Cross Cycle Business Resiliency Cross-Cycle ROA (%) Cross-Cycle ROE (%) Strong Cross Cycle FY19 FY21 FY22 FY17-FY18 Performance Despite Floods, Covid Covid Demonetisation Several Crisis NBFC crisis Wave 1 Wave 2 5.1% 22.2% 5.0% 4.2% 18.0% 16.3% 3.6% Avg: 13.5% Avg: 3.3% 12.3% 12.9% 2.3% 2.2% 9.0% 0.
Slide 36: Strong Parentage & Shareholder Base
Strong Parentage & Shareholder Base Shareholding Pattern – December 2023 Others, 5.55 MF, AIF, Committed to Micro Finance Business Insurance, Promoter 15.79 Group, 66.66 • CreditAccess India B.V. (CAI) specialises in Micro & Small Enterprises financing FPI, 12.00 • Widely held shareholding base: 272
Slide 37: Past Five Years Performance Track Record (1/2)
Past Five Years Performance Track Record (1/2) Gross Loan Portfolio (GLP) (INR Cr) Disbursements Active Borrowers (‘000) CAGR CAGR CAGR 31% 23% 15% 21,031 18,539 4,264 4,055 3,912 3,824 16,599 15,466 13,587 11,996 10,389 11,011 2,470 8,221 7,159 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19
Slide 38: Past Five Years Performance Track Record (2/2)
Past Five Years Performance Track Record (2/2) Note: Refer Annexure for definition of key ratios Margin Analysis (%) Operating Efficiency (%) Asset Quality (%) 20.0% 5.01% 19.4% 18.8% 18.3% 18.9% 5.0% 4.9% 4.8% 4.9% 4.7% 3.44% 2.78% 12.7% 12.2% 1.78% 10.7% 10.9% 11.6% 39.0% 1.14% 4.43% 33.9% 36.7% 3
Slide 39: Key Ratios: Definitions
Key Ratios: Definitions 1. Portfolio Yield = (Interest on loans – processing fees + Income from securitisation)/ Avg. quarterly on-book loans 2. Weighted Avg. COB = (Borrowing cost – finance lease charges) / Daily average borrowings (excl. Financial Liability towards Portfolio Securitized) 3. Margin
Slide 40: Thank You!
For Further Queries: Thank You! Nilesh Dalvi SVP & Head Investor Relations Contact No – 9819289131 Email Id – nilesh.dalvi@cagrameen.in Sahib Sharma DGM – Investor Relations Contact No – 7066559383 Email Id – sahib.sharma@cagrameen.in 39 www.creditaccessgrameen.in www.creditaccessgrameen.in