Utkarsh Small Finance Bank Limited · NSE:UTKARSHBNK
Utkarsh Small Finance Bank — Q2 FY24 Earnings Presentation
47 slides from Utkarsh Small Finance Bank's earnings presentation, Nov 4, 2023
Slide 1: Covering letter to stock exchanges
SE/2023-24/61 November 04, 2023 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, NSE symbol: UTKARSHBN
Slide 2: Investor Presentation Q2 FY24
Slide 3: Key Highlights Q2, FY24
Key Highlights Q2, FY24 01 Credit growth 26% YoY; deposits growth 19% YoY Healthy traction seen in Retail Term Deposits Acquisition – Retail Term Deposits grew by 50% YoY 02 Healthy new customer acquisition in Micro-banking; Building micro-banking lending further with deep-rooted presence & 03 under
Slide 4: Key Highlights Q2'FY24
Key Highlights Q2’FY24 ₹14,892 cr. ₹13,965 cr. ₹114 cr. vs. ₹2,687 cr. vs. 2.8% vs. [4.6%] 871 vs. [738] [₹88 cr.] [₹1,765 cr.] Gross Loan Deposits Gross NPAs Banking Outlets Profit After Tax Capital + Reserves Portfolio 26.4% 19.0% / 50.5% ₹238 cr. vs. 0.16% vs. [1.04%] 26 Gross Loan 24.8% vs. Depo
Slide 5: Journey and Franchise, Portfolio, Deposits, Financial Performance
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 Launched digital on- FY24 boarding of accounts Bank’s Capital + Reserves crossed ₹2,000 crore Raised equity capital of Rs.240 crore in Mar-21 FY23 In Jul-23 Bank launched IPO to raise equity capital of ₹500 crore; IPO FY21 Utkarsh Sm
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 Microbanking 63% Other Retail Loans 26% Joint Liability MSME Loans Housing Individual Loans Group Loans (Retail Assets) Loans Asset products 1
Slide 9: Diversified Distribution Network
Diversified Distribution Network Extensive physical network of Banking Outlets (Sep’23) Potential for Retail Assets within existing Branches (Sep’23) >50 outlets Total 1 <50 Outlets MSME Wheels STATES Banking MB Outlets GB Outlets HL Locations Locations Locations No outlets Outlets 2 Chandigarh: 3 8
Slide 10: Differentiated Branch Network
Differentiated Branch Network 738 794 830 851 871* ▪ Differentiated branch network to ensure relevant product offerings to the customers as 602 well as ensuring cost efficiency of operations 564 579 594 532 ▪ All branches CBS enabled; customers can 206 230 251 257 269 transact from any of the 871 br
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 26% 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-H1 FY24) Housing Micro-banking Loans 14% Retail Loans Loans Other Retail Loans 81% (MSME) 1% Others* 4% 2% Wholesale Lending (Excl BBG) 48% 14,892 Wholesale 14,394 Lending 13,957 1,672 5% 1,617 1,547 10,631 3,928 3,718 Microbanking Secur
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% 3% 9,216 9,292 JLG: 95% 86% Branches 9,059 8,535 8,701 MBIL: 5% in Rural & Semi-urban RURAL areas SEMI URBAN 38% 48% Geographical Split of MB Portfolio Presence across 12 Sta
Slide 16: Micro Banking Lending (Contd.)
Micro Banking Lending (Contd.) All Amounts in ₹ Crores Micro Banking Disbursements MBIL Product Portfolio Outstanding 2,619 2,447 2,304 2,366 470 387 1,897 332 252 194 Q2,FY23 Q3,FY23 Q4,FY23 Q1,FY24 Q2,FY24 Sep'22 Dec'22 Mar'23 Jun'23 Sep'23 Demographic Break up of Portfolio o Micro Banking Individ
Slide 17: Micro Banking – Asset Quality
Micro Banking – Asset Quality Collection Efficiency (excl. Pre-Payments) 5.9% 6.1% 97% 97% 4.0% 3.6% Q1'FY24 Q2'FY24 0.8% 0.7% 0.7% SMA 0.5% 0.9% 0.8% 0.9% 0.8% 0.8% 0.7% 0.7% 0.5% Jun'23 Sep'23 SMA 0 SMA 1 SMA 2 NPA Carrying floating provision of ₹106 crore for Micro Finance SMA 0 % SMA 1 % SMA 2 %
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 1,977 1,724 1,534 1,225 1,022 Secured Business Unsecured Micro LAP / Loans (LAP) Business Loan Overdraft Sep'22 Dec'22 Mar'23 Jun'23 Sep'23 Disbursements (97% YoY Growth) 450 11.6% 11.1% 10.9% 11.5% 11.6% 12.0% o Significant
Slide 20: Housing Loans
Housing Loans All Amounts in ₹ Crores Portfolio Outstanding 557 590 Retail Housing Loans Affordable Housing 519 461 420 o Significant presence in our core geography o Currently offering HL product from 47 locations, Sep'22 Dec'22 Mar'23 Jun'23 Sep'23 significant headroom to expand within existing br
Slide 21: CE & CV Loans
CE & CV Loans All Amounts in ₹ Crores Portfolio Outstanding 741 CV (New) CE (New) CV & CE (Used) 637 560 • 90% of total • 6% of total portfolio • 4% of total portfolio portfolio 429 337 Sep'22 Dec'22 Mar'23 Jun'23 Sep'23 o Lending primarily to small fleet operator segment Disbursements (57% YoY Grow
Slide 22: Wholesale Lending
Wholesale Lending All Amounts in ₹ Crores Portfolio Break up (Mar-20) Portfolio Break up (Sep-23) Portfolio - ₹1,672 crore (Sep-23) Rating Wise WSL FI Portfolio Break up Business Banking Business Banking Started Business Group Banking in FY21 Group 0% 27% Disbursement Yield AA Category BBB Category
Slide 23: Deposits Build-up
Deposits Build-up Deposits grew by 19% YoY; Retail Term Deposits grew at 50% YoY Expanded General Banking Franchise significantly over last 2 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 2.35 million Growth led Deposits (19% YoY Growth) Total Deposit by RTDs 1.29 Customers 1.18 1.25 17,0 00 1.06 97% 95% 95% 97% 101% 110 % 0.94 1.64 lakh CASA account 0.86 16,0 00 15,0 00 100 % 14,0 00 13,0 00 90% opened
Slide 25: Deposits Trend & Composition (Contd.)
Deposits Trend & Composition (Contd.) All Amounts in ₹ Crores Deposits Composition Decline in Concentration to Top 20 Depositors % 22% 21% 21% 19% 20% CASA 59% 60% 62% 62% 66% CASA + RTD 2,895 2,884 2,973 2,571 Institutional Term Deposits 29% 41% 40% 38% 38% 34% Retail Term Deposits 21% 21% 18% SA B
Slide 26: Asset Quality Movement
Asset Quality Movement All Amounts in ₹ Crores Write off 112 151 67 82 92 Sep-23 Sep-22 Jun-23 Gross NPA % 2.8% 4.6% 3.1% PCR% 78.2% 80.5% 88.3% 89.8% 94.6% Net NPA % 0.2% 1.0% 0.3% 544 SMA 1 & 2 448 432 431 404 1.5% 1.4% 1.8% 267 119 206 197 87 51 44 22 Sep'22 Dec'22 Mar'23 Jun'23 Sep'23 Gross NPAs
Slide 27: Financial Performance
Financial Performance Stable & consistent financial performance Focus on cost efficiency resulting healthy cost income ratio Profit after tax increased 30% YoY to ₹114 crore in Q2 FY24 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) Grew 7% QoQ 238 459 221 420 207 210 208 134 107 114 222 88 94 177 Q2' FY23 Q3' FY23 Q4' FY23 Q1' FY24 Q2' FY24 H1' FY23 H1' FY24 Operating Profit (PPoP) PAT Operating Prof
Slide 29: Enduring Profitability Metrics (Contd.)
Enduring Profitability Metrics (Contd.) 3.2% 2.2% 52.5% / 13.6% 56.7% / 13.3% H1 FY23 H1 FY24 H1 FY23 H1 FY24 Credit cost 56.5% 57.0% 56.5% 3.1% 54.1% 54.9% 2.8% at 1.9% for 2.1% 2.3% Q2, FY24, excl 1.1% floating 12.4% 11.1% 12.8% 13.9% 10.0% provision created of ₹14 crore Q2'FY23 Q3'FY23 Q4'FY23 Q1
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; ₹120 crore as on Sep- Average: 15.3% 23 22.8% 20.3% 19.3% RoE back to pre- covid levels 10.0% 4.1% FY20 FY21 FY22 FY23 H1 FY24 29
Slide 31: Break-up of other income
Break-up of other income ₹ 74 crore ₹ 92 crore ₹ 105 crore 15% 14% 26% 10% 22% 14% 47% 35% 37% 28% 28% 22% Q2'FY23 Q1'FY24 Q2'FY24 Loan Processing Fee PSLC Income Recovery from written off accounts General Banking & Other Income 11/4/2023 30
Slide 32: CRAR & Tier 1
CRAR & Tier 1 All Amounts in ₹ Crores Particulars Sep-23 Sep-22 Jun-23 Risk Weighted Assets 10,906 8,669 10,266 Total Capital 2,707 1,839 2,036 Tier-I Capital 2,513 1,604 1,842 Tier-II Capital 194 235 194 CRAR 24.82% 21.22% 19.83% Tier-I CRAR 23.04% 18.50% 17.94% Tier-II CRAR 1.78% 2.71% 1.89% 11/4/
Slide 33: Profit & Loss: Quarter and half year ended September 30, 2023
Profit & Loss: For the quarter & half year ended September 30 , 2023 th All Amounts in ₹ Crores Particulars Q2’FY24 Q2’FY23 Y-o-Y Q1’FY24 Q-o-Q H1’FY24 H1’FY23 Y-o-Y INCOME Audited Limited Review Audited Total Interest Earned 756 602 26% 720 5% 1,477 1,173 26% Less : Interest Expense 315 226 40% 298
Slide 34: Balance Sheet: As on September 30, 2023
Balance Sheet: As on September 30th, 2023 All Amounts in ₹ Crores September 30th, September 30th, Particulars Y-o-Y June 30th, 2023 Q-o-Q 2023 2022 CAPITAL & LIABILITIES Audited Limited Review Capital and Reserves 2,687 1,765 52% 2,110 27% Deposits 13,965 11,737 19% 13,967 0% Borrowings 1,902 2,124
Slide 35: Shareholding Pattern
Shareholding Pattern Bank Shareholders as on September 30th, 2023 Top Shareholders as on September 30th, 2023 Utkarsh CoreInvest Limited Mirae Asset (Mutual Fund) Retail Individuals & HUF, Olympus ACF Pte. Ltd. 6.8% Bharti AXA Life Insurance Company Ltd. Corporates, Banks & Triodos Sicav II - Triodo
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 • Currently engaged as an advisor to the United Nations Industrial • Certified associate of the Indian Institute of Bankers Deve
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 871 Y ISO 27001 Certification for IT operation branches S I Micro ATM for Cash Withdrawal in Remote Tab enabled feet-on-street for acquisition and C locations collections A L Extens
Slide 40: Transformation Fueling Business Growth
Transformation Fueling Business Growth T R Redesigning business process of retail asset and Invest on cloud platforms to improve agility liability for higher productivity and scalability A N S F O Automation and digitation of operational API led Integration platform for internal R process and custom
Slide 41: Environment, Social & Governance
Environment, Social & Governance Environment Social Governance Practice is aligned with Committed to give due • Exclusion List • Service to Bottom • Diversified Board the national E&S laws consideration to • Training and of pyramid • Board and regulations and environmental & social awareness • Inclu
Slide 42: Awards & Accolades
Awards & Accolades Best Customer Experience Strategy by India Customer Excellence (CX) Summit & Awards 2023 EMPLOYEE EXCELLENCE 2023 by the Best Customer Experience at Times Group – 18th Annual Summit and ET EDGE Awards by ASSOCHAM 11/4/2023 41
Slide 43: Awards & Accolades (Contd.)
Awards & Accolades (Contd.) RANKED 46 UNDER “THE NEXT 500 COMPANIES 2022” BY FORTUNE INDIA RECOGNITION AS ONE OF THE Recognised as one of the Most ‘PROMISING BRANDS 2022’ BY Trusted BFSI Brands by ECONOMIC TIMES Teammarksmen Daily 11/4/2023 42
Slide 44: Utkarsh Welfare Foundation: CSR Initiatives
Utkarsh Welfare Foundation: CSR Initiatives FINANCIAL AWARENESS SKILL & ENTERPRISE VILLAGE DEVELOPMENT OTHER PHILANTHROPIC HEALTH INITIATIVES ACTIVITIES DEVELOPMENT PROGRAM PROGRAM Initiatives Blood Donation Camps, Lives Impacted Lives Impacted Lives Impacted Lives Impacted Support to Old Age 9,67,0
Slide 45: Utkarsh Welfare Foundation: CSR Initiatives (Contd.)
Utkarsh Welfare Foundation: CSR Initiatives (Contd.) Financial Awareness Polyclinic Camps E-Clinics Digital Smart Classes Women Entrepreneurship Blood Donation Camps 11/4/2023 44
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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