Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q2 FY23 Earnings Presentation
46 slides from Au Small Finance Bank's earnings presentation, Oct 19, 2022
Slide 1: Exchange filing cover letter for investor presentation
Ref. No.: AUSFB/SEC/2022-23/372 Date: 19th October, 2022 To, National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai 400051, Mumbai 400001, Maharashtra. Maharashtra. NSE Symbol: AUBANK Scrip
Slide 2: Investor Presentation Q4'FY22
Investor Presentation Q4’FY22
Slide 3: Management Update Assets Update Operating & Financial Highlights
Management Update Assets Update Operating & Financial Highlights Tech Update Liabilities Update Other Key Updates
Slide 4: 1. Management Update
1. Management Update Net worth has surpassed ₹ 10,000 Cr, 5x from 5X converting to a Bank in 2017 Visible traction in digital properties in ~1 year since launch Retail to Wholesale advances stable at ~90:10 Added 27 touchpoints in this quarter
Slide 5: Key Messages
❑ Q2FY’23 was a strong quarter where the Bank continued to make progress on all key parameters - retail deposit mobilization, credit growth in all lending verticals, acquisition and engagement in digital products, stable profitability & margins; Collection efficiencies remained strong resulting in r
Slide 6: Key Operating Highlights
❑ Board of Directors at its meeting dated 10th October’22 approved the re-appointment of Mr. Raj Vikash Verma as the Part-time Chairman of the Bank till 29th Jan’24 (i.e. till completion of his tenure) subject to requisite approvals ❑ Post the shareholders’ approval, the Board of Directors, on 10th
Slide 7: Q2'FY23 Financial performance snapshot
Q2’FY23 Financial performance snapshot ❑ Deposits grew 7% QoQ and continued to become increasingly granular with CASA growing to 42% from ₹ 58,335 Cr Deposits 39% in Q1’FY23 +11% YTD o Average LCR of ~129% in Q2’FY23 allowed the Bank to focus on SA/retail deposit led growth over Disbursements ₹ 8,60
Slide 8: Significant progress since launch of AU 0101
We have made significant progress since launch of AU 0101 Jun‘21 (in lacs, unless specified otherwise) Sep’22 (Soft launch) Engagement Digital customers 4.5 14.3 Digital engagement Monthly Active Users 2.3 8.1 at >3x vs June’21 levels Customers with pre- 2.3 8.6 approved offers Acquisition Saving Ac
Slide 9: Touchpoint Highlights
Touchpoint Highlights 20 States and 2 UTs 980 Touchpoints 235 Districts 710 Locations 524 ATMs Touchpoints Break-up J&K 2 HP 15 28% Punjab 52 Chandigarh 3 Uttarakhand 1 Haryana 49 (+2) Delhi 33 (+1) 72% UP 18 (+5) Assam 1 Rajasthan 386 (+2) Bihar 1 Urban Core Gujarat Jharkhand 1 AU Asset 145 (+3) We
Slide 10: Garnering deposits from Urban markets and disbursing in Core markets
Garnering deposits from Urban markets and disbursing in Core markets Deposits Break up Advances Break up 23% (26%) 35% Urban Core (35%) 65% 77% (65%) (74%) 1% 0% 1% 2% Rajasthan 1% 2% 1% 2% 3% Maharashtra 3% Delhi 5% Punjab 17% 31% 6% Haryana 38% Gujarat 7% Madhya Pradesh Himachal Pradesh 10% 9% Utt
Slide 11: 2. Operating & Financial Highlights
2. Operating & Financial Highlights Maintaining sufficient liquidity with LCR at ~129% NII up 11% QoQ; Core Other Income up 15% QoQ Core PPOP up by 29%/11% YoY and QoQ RoA/RoE at 1.8%/15.3% in Q2’FY23
Slide 12: H1'FY23 Financial highlights
H1’FY23 Financial highlights Net Interest Income Total Income PAT (₹ Crore) 2,059 4,219 610 1,477 3,165 482 H1'FY22 H1'FY23 H1'FY22 H1'FY23 H1'FY22 H1'FY23 Yield on Advance Cost of Funds Net Interest Margin RoA RoE Vs. Vs. Vs. Vs. Vs. 14.0% 6.2% 6.0% 1.8% 14.8% (H1’FY22) (H1’FY22) (H1’FY22) (H1’FY22
Slide 13: Quarterly trends of key parameters
Quarterly trends of key parameters Customers Employees Shareholders’ Funds Total B/S Assets (in lacs) (in 000s) 33.3 29.9 30.7 28.7 77,878 27.8 10,114 27.5 25.5 69,078 71,041 23.7 23.4 21.3 58,645 7,127 7,514 7,789 53,236 6,781 Q1'FY23 Q3'FY22 Q2'FY22 Q4'FY22 Q2'FY23 Q1'FY23 Q3'FY22 Q2'FY22 Q4'FY22
Slide 14: Quarterly trends of key parameters
Quarterly trends of key parameters Net Interest Income Total Income PAT 2,240 1,083 346 343 937 976 1,978 1,979 302 820 279 268 753 1,772 1,597 Q1'FY23 Q3'FY22 Q2'FY22 Q4'FY22 Q2'FY23 Q1'FY23 Q1'FY23 Q3'FY22 Q3'FY22 Q2'FY22 Q4'FY22 Q2'FY22 Q4'FY22 Q2'FY23 Q2'FY23 Net Interest Margin RoA RoE 6.3% 6.3
Slide 15: Stable spreads
Stable spreads Incremental Spreads Gross Advances Spreads 13.9% 13.7% 13.1% 13.4% 13.3% 13.3% 12.9% 12.7% 12.7% 12.1% 7.6% 7.4% 7.8% 7.8% 7.7% 7.5% 7.5% 6.8% 6.9% 7.0% 5.7% 6.1% 6.1% 5.9% 5.7% 5.8% 5.3% 5.3% 5.3% 5.7% Q2'FY22 Q3'FY22 Q4'FY22 Q1'FY23 Q2'FY23 Q2'FY22 Q3'FY22 Q4'FY22 Q1'FY23 Q2'FY23 Di
Slide 16: Profit & Loss statement
Profit & Loss statement In Q2’FY23 (All Figures in ₹ Crore) H1'FY23 H1'FY22 YoY Q2'FY23 Q2'FY22 YoY Q1'FY23 QoQ ❑ 44% YoY NII growth aided by stable spreads Income and healthy disbursements Interest Earned 3,812 2,758 38% 1,992 1,405 42% 1,820 9% Interest Expended 1,753 1,281 37% 909 652 39% 844 8%
Slide 17: Balance sheet
Balance sheet (All Figures in ₹ Crore) 30-Sep-22 30-Sep-21 YoY 30-Jun-22 QoQ 31-Mar-22 YTD ❑ Net worth of the Bank has now surpassed Liabilities Shareholders Fund 10,114 6,781 49% 7,789 30% 7,514 35% ₹ 10,000 Cr post capital raise, a growth of Deposits 58,335 39,034 49% 54,631 7% 52,585 11% 5x in ~5
Slide 18: Other income
Other income (All Figures in ₹ Crore) H1'FY23 H1'FY22 YoY Q2'FY23 Q2'FY22 YoY Q1'FY23 QoQ Loan Assets Processing & Other Fees 284 122 132% 150 94 60% 134 13% General Banking, Cross Sell & Deposits related fees 115 67 70% 63 36 75% 52 21% PSLC Fees 25 67 -62% 13 49 -74% 13 0% Miscellaneous 35 11 221%
Slide 19: Profitability trends
Profitability trends RoA (%) RoE (%) 1.8% 14.8% 1.7% 13.9% H1'FY22 H1'FY23 H1'FY22 H1'FY23 RoA Components NII (%) Other Income(%) 1.6% 1.2% 1.1% 5.6% 5.6% 1.0% Other Income Core Other H1'FY22 H1'FY23 Income H1'FY22 H1'FY23 Opex (%) Cost to Income Ratio (%) Provision & Contingencies (%) 63.8% 62.5% 5
Slide 20: 3. Liabilities Update
3. Liabilities Update CASA ratio at 42% vs 39% QoQ CoF for H1’FY23 at 5.8%, down 17bps over FY22 15 liability branches added with 13 in urban areas Securitized ₹715 Cr of loans in Q2’FY23
Slide 21: Our Performance
Scale low cost, retail-focussed sustainable liability franchise Key turning points Core Principles of our Deposit Strategy Deposit as a % CASA + Retail of external TD as a % of Communication & Engagement liabilities total deposits Automated Customer Life Cycle Mgmt. Virtual RMs, Newsletters Apr’17 N
Slide 22: How has the Branch Banking charter evolved in last 5 years?
How has the Branch Banking charter evolved in last 5 years? Structure Products Deposits Liability Branches* Consolidated Unit of Mar'18 - 6,686 Mar'18 Fundamental Products 80 212 14 2017 Liabilities CA, SA, TD Garner deposits with customer mix ranging from Lockers Government, Co-operative Insurance
Slide 23: Deposits - Snapshot
Deposits - Snapshot Focus on granular deposits and customer profiles Total Deposits 39,034 44,278 52,585 54,631 58,335 CD Book 5% 5% 5% 5% 4% 1,083 333 1,506 1,224 588 6% 12% 12% 10% 11% 2,867 TASC 13% 11% 9% 2,211 12% 13% 2,569 12% 13% Govt 15% 13% 14% 1,784 21,807 1,600 17,039 19,006 Banks 15,595
Slide 24: 4. Asset Business Update
4. Asset Business Update Strong and sustainable business model GNPA ratio continued to gradually decline - 1.90% vs 1.96% QoQ Collection Efficiency for Q2’FY23 at 108% PCR at 71% (74% including technical write-off)
Slide 25: Strong and established asset franchise
Strong and established asset franchise ▪ Vintage book and tested business model ▪ Unique product proposition with ~ 15 years experience ▪ Growing opportunity in used and new vehicles especially in ▪ Strong collateral understanding core markets ▪ Deep penetration in core markets ▪ Deep penetration in
Slide 26: Asset Quality snapshot
Asset Quality snapshot All figures in ₹ crores ❑ GNPA decreased slightly to 1.90% versus 1.96% QoQ Gross Assigned/ Disbursements Vintage Gross Gross Segments Advance Securitised (year) Advances NPA Q2'FY23 ❑ Standard Restructured accounts stood at 1.7% of Yield (%) loans Wheels 1996 19,002 13.8% 426
Slide 27: Provisioning snapshot
Provisioning snapshot Credit Cost table All Figures are in ₹ Crores Credit Cost Q2’FY23 Q2’FY22 Q1’FY23 Repo & POS Loss 30 52 29 Write off 23 0 34 Less: Bad Debt Recovery* -4 -2 -2 Net Credit Loss 48 50 61 Net Credit Loss (as % of Avg. Total Assets) 0.26% 0.39% 0.34% Provisioning table Credit Cost -
Slide 28: Overview of provisions
Overview of provisions Sep’22 Jun’22 Particulars No. of Loan No. of Loans Provisions Coverage Provisions Coverage loans Amount loans Amount GNPA 44,111 997 667 67% 44,419 970 654 67% Covid related restructuring (Standard) 13,640 895 148 17% 16,561 1,044 170 16% Contingency provisions 129 144 Floatin
Slide 29: 5. Tech Update
5. Tech Update 14.3 Lac digital customers 42% customers acquired via digital products in Q2’FY23 3.1 lac + credit cards issued ₹530 Cr+ digital personal loans disbursed since AU 0101 launch
Slide 30: Key strategic objectives for tech
Key strategic objectives for tech Grow retail focused, stable, low-cost deposit franchise Develop unsecured lending capability using Data & Analytics Build digital distribution channels Invest in core technology to remain future ready Drive automation and operating efficiency 29
Slide 31: Digital is accelerating our customer acquisition and increasing engagement
Digital is accelerating our customer acquisition and increasing engagement Accelerated acquisition through digital proposition… …at much lower cost AU 0101 launch 35 100 No. of customers (Lac) ~5.7 Lac 30 25 Acquisition 20 <50 15 FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 20 FY 21 FY 22 FY 23 Branch Digital T
Slide 32: AU 0101 – strong adoption since launch
AU 0101 – strong adoption since launch Tech Savvy Monthly Active Customer Base Digital Customers Customers Users Jun‘22 ~30.7 Lac 18.0 Lac 11.9 Lac 6.7 Lac Sep‘22 ~33.3 Lac 20.1 Lac 14.3 Lac 8.1 Lac QoQ 8% 12% 20% 21% 4.3 Lac Additional Non-AU customers registered on AU 0101 as of Q2’FY23 31
Slide 33: Video Banking - helping us achieve meaningful growth
Video Banking - helping us achieve meaningful growth ▪ Continue to develop Video Banking proposition with expanding suite of banking services delivered over secured video calls (acquisition, servicing and cross sell) Video Banking SA acquisition as proportion of total SA Customer profile acquisition
Slide 34: Credit Card - continues to scale with strong performance
Credit Card - continues to scale with strong performance across key metrics 3.1 Lac+ 47% 37% ₹ 1.3 Lac 62% Cards live Cards issued to NTB 1st time Credit Card users Average limit per card Urban customers ▪ LiT, India’s first customizable credit card launched last quarter, is now our highest selling
Slide 35: UPI QR - deepening our relationship with small merchants
UPI QR - deepening our relationship with small merchants Acquisition 8.1 Lac+ 67% 2 Lac+ UPI QRs installed till Q2’FY23 Activation rate New customers acquired through UPI QR till Q2’FY23 1.3 Cr 1.6 Lac ₹ 1,104 Cr Transactions in Q2’FY23 Daily average Value of transactions in transactions in Sep‘22 Q
Slide 36: Our digital proposition continues to win high ratings and accolades
Our digital proposition continues to win high ratings and accolades Digital Savings Account LiT credit card Video Banking rated 5 by Forbes Advisor rated 5 by Forbes Advisor Awarded for best covid strategy implemented for customer experience 35
Slide 37: 6. Other Key Updates
6. Other Key Updates Sustainability is intrinsic to our business model Sustainalytics has rated our ESG risk at “Medium” Onboarded Head of Sustainability last quarter Strong and Independent Board
Slide 38: Sustainability / ESG Update
Sustainability / ESG Update Environment Social Governance Environment is a recognized Addressing the Occupational, Residential, Compliant on all governance parameters stakeholder for AU and Social vulnerabilities Carbon Neutral AGM - COE for Skills Development Sustainalytics platform Among the few I
Slide 39: Financial & Digital Inclusion
Financial & Digital Inclusion Universal Access to Financial Services ➢ 30% of our total touchpoints/branches - 293 are in unbanked rural centres (Tier-VI, population less than 5,000 & Tier-V, population less than 10,000) ➢ Present in 51* Special Focus Districts with 87 touchpoints covering 24 Aspira
Slide 40: Award & Recognitions
Award & Recognitions The Economic Times HR Excellence Numero Uno India’s Best Small Employee Excellence Award 2022 Exemplary Award Finance Bank 2020-21 Award 2022 By PFRDA By Financial Express By PeopleFirst Digital Consumer Front Benchers Financial Inclusion Banking Initiative of Award 2022 Initiat
Slide 41: Shareholding Pattern as on 30th Sep'22
Shareholding Pattern as on 30th Sep’22 Others 5.6% Promoter & Promoter Group Individual 8.9% 25.6% Shareholding % of Pattern shareholding Mutual Fund Promoter & Promoter 13.0% group 25.6 38.6% DII 21.3 Foreign FII 38.6 Institutional Individual 8.9 Investors (FII) Others 5.6 4.1% AIF Total 100 4.3% I
Slide 42: Experienced Board of Directors
Experienced Board of Directors Mr. Raj Vikash Verma Chairman and Independent Director 40+ years of experience Masters in Economics, MBA (FMS), CAIIB Ex-Chairman at NHB Leadership positions at IMGC, CERSAI, PFRDA, etc. Independent Directors Executive Directors Mr. H R Khan Ms. Jyoti Narang Mr. Sanjay
Slide 43: Abbreviations
Abbreviations BSBDA Basic Savings Bank Deposit A/C OPEX Operating Expenses CASA Current Account Deposits and Savings Account Deposit P&L Profit & Loss Statement COF Cost of Fund PAT Profit After Tax CRAR Capital Adequacy Ratio PMJJBY Pradhan Mantri Jeevan Jyoti Bima Yojana DII Domestic Institutional
Slide 44: Definitions
Definitions Core Markets are smaller centres in rural/semi-urban which typically have a local economy built around agriculture and a. Core Markets small businesses, and which have traditionally been our traditional markets for lending. b. Urban Markets Larger centres which have more advanced infrast
Slide 45: 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 46: Thank You
THANK YOU For Investor queries contact (details in QR Code): Prince Tiwari | Aseem Pant Email: investorrelations@aubank.in
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