Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — 9M FY2019 Earnings Presentation
57 slides from Au Small Finance Bank's earnings presentation, January 2019
Slide 1: Investor Presentation 9M / Q3FY19
Investor Presentation 9M / Q3FY19 A SCHEDULED BANK I FORTUNE INDIA 500 COMPANY Retail Focused I Differentiated I Well Capitalized I Fast Growing I Customer Centric January, 2019
Slide 2: Table of Contents
Table of Contents 1. 9M / Q3FY19 Performance Summary & Key Updates 2. Retail Assets & Small & Mid Corporate Assets 3. Branch Banking 4. Treasury 5. Digital & Analytics 6. Distribution, Financial Inclusion & Customer Delight 7. About AU Small Finance Bank 8. Historical Financial & Operational perform
Slide 3: 9M / Q3FY19 Performance Summary & Key Updates
1. 9M / Q3FY19 Performance Summary & Key Updates 3
Slide 4: 9M / Q3FY19 Key Highlights
9M / Q3FY19 Key Highlights 396 Branches1 , 84 Asset Centers 11 States 11 lakh Customers 12,572 employees 49 BCs, 15 Offices, 485 ATMs1 Loan Assets Under Total B/S Assets Disbursements2 Deposits3 CASA Ratio4 Management3 INR Crore INR Crore INR Crore INR Crore 27,802 21,765 14,686 11,053 14,161 6,620
Slide 5: 9M / Q3FY19 Key Highlights
9M / Q3FY19 Key Highlights Total Income Net Interest Income PAT Net-worth INR Crore INR Crore INR Crore INR Crore 264 3,035 2,403 209 955 2,194 1,489 654 9MFY18 9MFY19 9MFY18 9MFY19 9MFY18 9MFY19 31-Dec-17 31-Dec-18 Net Interest Yield1 on AUM Cost of Funds ROA3 ROE4 Margin2 Vs. Vs. Vs. Vs. Vs. 15.3%
Slide 6: 9M / Q3FY19 - Key Updates
9M / Q3FY19 - Key Updates Advances growth momentum strongly intact amidst the headwinds of tighter liquidity and a broader slowdown. AUM on 31st Dec 18 at INR 21,765 Crore; 3rd Consecutive quarter for 60%+ y-o-y AUM Growth Underlying growth all lines of businesses; marginal market share gains fr
Slide 7: Consistent Profitability
Consistent Profitability RoA1 (%) RoE1 (%) 14.7% 2.4% 2.3% 13.2% 13.3% 13.2% 12.7% 12.8% 1.5% 1.6% 1.5% 1.5% Q3FY18 Q1FY19 Q2FY19 Q3FY19 9MFY18 9MFY19 Q3FY18 Q1FY19 Q2FY19 Q3FY19 9MFY18 9MFY19 ROA / ROE – Components NII1 (%) Other Income3 (%) Opex1 (%) 6.2% 7.6% 7.3% 3.2% 5.4% 2.8% 4.8% 4.7% 4.2% 4.
Slide 8: Product-wise ROA for 9MFY19
Product-wise ROA for 9MFY19 Vintage Asset Verticals New Asset Verticals Regulat ory Cost Loan Loan Branch Total Total Assets Assets Banking Digital Treasury (CRR, Overall SBL - SBL - Business Gold Consumer Two Home Agri SLR & Business Segments Wheels NBFC REG Vintage New MSME SME Banking Loan Durabl
Slide 9: Stable Asset Quality
Stable Asset Quality Credit Cost - Net Impact on P/L Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 (All Figures in INR Crore) Unaudited Audited Unaudited Unaudited Unaudited Provision on NPA 11 2 22 17 19 Write off -0 18 - - - Repossession Loss 12 -0 5 5 5 POS Loss 1 -0 0 1 2 Less: Bad Debt Recovery -6 -12 -5
Slide 10: Well Capitalized
Well Capitalized (INR Crore) Dec-17^ Mar-18 Jun-18^ Sep-18^ Dec-18^ Unaudited Audited Unaudited Unaudited Unaudited Total Risk Weighted Assets 9,374 11,833 13,212 15,459 17,141 Tier I Capital 1,874 2,179 2,653 2,660 2,660 Tier II Capital 91 105 85 87 599 Total Capital 1,965 2,285 2,738 2,747 3,260 C
Slide 11: Profit & Loss Statement
Profit & Loss Statement (All Figures in INR Crore) Q3FY19 Q3FY18 Y-o-Y 9MFY19 9MFY18 Y-o-Y Q2FY19 Q-o-Q Unaudited Unaudited Unaudited Unaudited Unaudited Income Interest Earned 788 464 70% 2,072 1,235 68% 683 15% Interest Expended 440 214 106% 1,117 582 92% 362 22% Net Interest Income 348 250 39% 95
Slide 12: Balance Sheet – Total Assets grew 96% y-o-y
Balance Sheet – Total Assets grew 96% y-o-y (All Figures in INR Crore) Dec 31, 2018 Dec 31, 2017 Y-o-Y Sept 30, 2018 Q-o-Q Unaudited Unaudited Unaudited Liabilities Capital 292 286 2% 292 0% Money received against Share Warrants 175 - N.A. 175 0% Employees stock options outstanding 41 9 339% 34 22%
Slide 13: Operation Cost Break Up & Operating Leverage
Operation Cost Break Up & Operating Leverage Q3FY19 9MFY19 Expenses Nature INR Crore % INR Crore % Fixed 57 21% 173 22% Semi Variable 174 63% 489 63% Levers of Operating Leverage Variable 44 16% 119 15% Fixed Expenses - about 20% of the Total Expenses Includes Rent, Electricity, Office & General E
Slide 14: Marquee Shareholders Base – As on 31st Dec 2018
Marquee Shareholders Base – As on 31st Dec 2018 Shareholding Pattern Key Non-Promoter Shareholders (Holding above 1%) Holding Other - Redwood Investment (Warburg Pincus) 6.94% Domestic, 5.01% Temasek Holdings 4.77% Individual - Nomura 4.61% Domestic, 9.50% SBI Mutual Fund (through its various MF sch
Slide 15: Way Forward – Focus on 4Ds as we Build The Bank
Way Forward – FOCUS On 4Ds as we Build The Bank Retail Assets, Small & Mid Corporate Assets Liabilities & Branch Banking Diversify Products Mix; Offering wider products bouquet BUILD Enhance customer experience through ongoing Digital Enhancements • Continue to be Retail Assets led bank • Scale up H
Slide 16: Retail Assets & Small & Mid-Corporate Assets - Snapshot
2. Retail Assets & Small & Mid- Corporate Assets - Snapshot 16
Slide 17: Retail and Small & Mid-Corporate Assets Snapshot – I
Retail and Small & Mid-Corporate Assets Snapshot – I Retail Assets comprise ~81% of Gross AUM of INR Retail Assets continues to exhibit strong growth 21,765 Crore INR Crore 21,765 20,219 AUM Growth Y-o-Y Q-o-Q 17% 2% Retail Assets 17,521 16,108 Total 62.2% 7.6% 13,415 Small & Mid- Corporate Assets R
Slide 18: Retail and Small & Mid-Corporate Assets Snapshot – II
Retail and Small & Mid-Corporate Assets Snapshot – II Consistent growth in Disbursements Incremental Yield2 on Disbursements INR Crore In the month 11,053 of Dec’18 Q3 Credit 8,216 Y-o-Y Q-o-Q 14.5% 14.5% 15.1% Disbursements 6,620 14.2% Total 56.4% -1.5% 14.4% 4,110 4,049 4,730 13.9% 2,588 13.2% 13.
Slide 19: Retail Assets Snapshot – I
Retail Assets Snapshot – I Retail Assets AUM 1 Break-up AUM (INR Cr) Dec-18 Growth (%) Retail Assets 31-Dec-17 30-Sep-18 31-Dec-18 Y-o-Y Q-o-Q Wheels 6,269 8,543 9,352 49.2% 9.5% SBL - MSME1 3,955 6,078 6,769 71.2% 11.4% SBL - SME 821 819 861 4.9% 5.2% GL + Agri SME+ HL+ CD 24 154 238 912.6% 54.8% O
Slide 20: Retail Assets Snapshot - II
Retail Assets Snapshot - II Strong Disbursement Momentum maintained in Retail Assets Retail Assets Disbursement IRR Disbursements (INR Cr) Q3FY19 Growth (%) In the month of Dec’18 Retail Assets Q3FY18 Q2FY19 Q3FY19 Y-o-Y Q-o-Q Wheels 1,075 1,555 1,908 77.5% 22.7% 15.1% 15.2% 14.8% 14.5% SBL - MSME 5
Slide 21: Wheels Segment-wise
Wheels Segment-wise Wheels AUM break up – New vs Old Wheels AUM break up – Vehicle types 2% 2% 1% 2%1% Cars 27% 5% Multi-Utility Vehicle 4% 28% Small Commercial Vehcile 6% Sports Utility Vehicle Light Commercial Vehcile 9% Tractor Heavy Commercial Vehcile 71% Three Wheeler Construction Equipment 21%
Slide 22: Scaling Up New Retail Foot Prints
Scaling Up New Retail Foot Prints Agriculture SME Loans Agri SME INR Crore IRR % Agri Enterprises Rolled out in 6 States Q3 Disbursement 67 11.2% Agri Infrastructure Focus on Agri Value Chain / AUM as on 31st 148 11.4% Agri Projects Food Processing, etc. Dec 18 GNPA as on 31st Dec 18 NIL Home Loans
Slide 23: Small & Mid-Corporate Assets Snapshot
Small & Mid-Corporate Assets Snapshot Small & Mid-Corporate Assets AUM Break-up Continued Momentum in Business Banking INR Crore 3,886 3,789 AUM Growth Y-o-Y Q-o-Q 18% Small & Mid-Corporate 61.5% -2.5% 2,347 2,603 2,357 NBFC 77.0% -9.4% 20% Gross AUM 68.1% 46.4% 62% 1,331 Real Estate Group 7.6% 5.4%
Slide 24: Small & Mid-Corporate Assets Snapshot
Small & Mid-Corporate Assets Snapshot Small & Mid Corporate1 Assets – Disbursement Break Up INR Crore 1358 Increasing presence in Non-Fun Q3FY19 Based Credit Facilities, Trade & Disbursement Growth Y-o-Y Q-o-Q Remittances 844 860 976 Small & Mid-Corporate 2.0% -36.7% ❖ Business Banking executed more
Slide 25: Small & Mid-Corporate Assets Snapshot – II NBFC Lending
Small & Mid-Corporate Assets Snapshot – II NBFC Lending NBFC Lending spread across varied asset classes – substantially Asset Finance Co’s 86% of the NBFC exposure is in Investment Grade No. of No. of Type of NBFC’s Exposure (%) Credit Rating Exposure (%) Customers Customers Asset Finance Co's (AFC)
Slide 26: Branch Banking - Snapshot
3. Branch Banking - Snapshot 26
Slide 27: AU Branch Bankers - Driving Deposits, Cross-Sell, Third Party Products
AU Branch Bankers - Driving Deposits, Cross-Sell, Third Party Products, New Income Pools and Financial Inclusion Financial Inclusion Mobilizing Deposits ❖ 14 Unbanked branches1 , ~12.7K CASA A/c’s ❖ Deposit base – ~9.08 lakh Accounts with INR 14,674 Crore Deposits; New to AU Bank - >80% ❖ 90 Banking
Slide 28: Branch Banking - Snapshot
Branch Banking - Snapshot Growing Deposit Franchise; CASA Ratio of 24% 38% of the Term Deposits are non- callable [Bulk TD – Current Account Saving Account Term Deposits* Total 52% non-callable] CASA RATIO (%) CASA RATIO (%) CASA RATIO (%) 12,573 Total Deposit 10,798 Growth 24% 9,610 38% 26% 7,997 Y
Slide 29: 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 2,402 2,441 SA Break- Absolute Growth in up 9MFY19 1,911 16% 1,742 25% INR Crore % 26% 84% 27% Retail SA1 790 63% 75% Bulk SA1 -91 -19% 73% 74% Total 699 40% 31-Mar-18 30-Jun-
Slide 30: Branch Banking – Deposit profile
Branch Banking – Deposit profile 1 1 Area-wise Deposit Distribution Diversified Deposit Build-up across States Based on Uttar Pradesh Chattishgarh 13% 1% 1% Rajasthan Deposit Amount 29% Madhya Pradesh 24% 5% 37% Gujarat 6% Based on No. of Deposit A/c’s 51% Haryana 36% 7% 40% Himachal Maharashtra Pra
Slide 31: Treasury - Snapshot
AU SMALL FINANCE BANK 4. Treasury - Snapshot 31
Slide 32: Diversified Liabilities Portfolio
Diversified Liabilities Portfolio Increasing proportion of Deposits further diversifying the funding profile Funding Source 31-Dec-17 31-Mar-18 30-Jun-18 30-Sep-18 31-Dec-18 Deposits + Borrowings (INR Crore) 11,041 15,562 16,874 20,699 23,502 Deposits 33.7% 50.9% 59.3% 62.2% 62.4% Refinance from FIs
Slide 33: Declining Cost of Funds & Treasury Updates
Declining Cost of Funds & Treasury Updates Stable cost of funds1 Incremental Funds2 raised & its Cost INR Crore Avg. Cost of funds 14,0 00 7.1% 7.5% 8% Increment 8.3% 13,5 00 8% al Funds 8.0% 13,0 00 13,389 7% 7% Raised 7.8% 7.9% 12,5 00 6% 12,0 00 7.9% 11,5 00 6% 5% Increment 11,0 00 11,568 5% al C
Slide 34: Strong Liquidity Position & Asset Liability Management
Strong Liquidity Position & Asset Liability Management Strong Liquidity and ALM Position Maintained healthy liquidity of INR 2,862 Crore in form of excess SLR, Non SLR investments and short term money market lending (this is in addition to regulatory SLR & CRR requirement) which is more than 12% o
Slide 35: Digital & Analytics
AU SMALL FINANCE BANK 5. Digital & Analytics 35
Slide 36: Building Digital Assets
Building Digital Assets Consumer Durable Online sourcing through Tech. Partner Vijay Sales, Croma, Flipkart, CD INR Crore IRR % Amazon, Samsung, Godrej etc. Q3 Disbursement 5 21.8% Online/ Paperless Partnered with eHaat to improve rural AUM as on 31st Dec 18 7 22.3% product availability App Assisted
Slide 37: Digital Channels
Digital Channels TAB based paperless onboarding – SA opened Increasing Digital Channel Usage; About 85,000 Internet & Mobile Banking Users 163,885 In FY19, focusing 141,924 90% 87% 87% 100% 2,50,000 on Value in 2,27,039 1,400 4,000 1,60,000 82% 20 78% 84% 90% addition to 1,200 3,500 1,152 1,40,000 8
Slide 38: Unified Digital Properties
Creating a new age Digital Banking set up Digital Lending Delivered by hiring the right talent and creating an Omni experience across Banking Unified Digital Properties Touch Points Digital Wealth • Integrated multi industry team with Providing a holistic suite of resources being onboarded with Bank
Slide 39: Analytics
Analytics ❖ Loan Origination propensity models for Wheels & SBL Loans ❖ Using POD and propensity models to identify right set of customers for cross-sell campaigns ❖ Using historical data analysis to align incentive policies with business goal ❖ Location Analytics – Identifying the best locations fo
Slide 40: Distribution, Financial Inclusion & Customer Delight
6. Distribution, Financial Inclusion & Customer Delight 40
Slide 41: Well entrenched contiguous distribution franchise
Well entrenched contiguous distribution franchise 396 Branches1, 49 BCs, 11 lakh 4,57,507 Active Loan A/c’s & 12,572 24% CASA 11 States 485 ATMs1 84 Asset Centers Customers 9,08,424 Deposit A/c’s employees Ratio2 Deep Penetration into Core States and Expansion into other States Metro- Rural Urban Se
Slide 42: Leveraging Distribution
Leveraging Distribution Substantially “In-house” & “Direct” Sourcing; Developing multiple alternate channels for business sourcing Sourcing Channels Disbursements Deposits Channel-wise Disbursements in 9MFY19 9MFY18 9MFY19 9MFY18 9MFY19 BO & BC Digital Fleet on Street (FOS) 65% 63% 100% 98% 0% 0% AU
Slide 43: Financial Inclusion
Financial Inclusion Meeting Key Objectives of Small Finance Bank ❖ Serving customers with limited or no access to organized finance; Deep understanding and strong relationship enabled by local manpower ~77% 75% ❖ Paperless hassle-free banking; 80% of A/c’s opened through TAB’s in semi-urban PSL & ru
Slide 44: Focused on serving Self-employed, Low-Middle Income segments
Focused on serving “Self-employed”, “Low-Middle Income” segments More than 1.1 million customer base About 95% Self Employed (including Professionals) Number of Customers Customer Profile Asset & Deposit 11% Asset 27% Self-Employed Individual 93% Deposit 62% Salaried - Corporates, Govt. Individual &
Slide 45: Customer Centricity to lead to Customer Delight
“Customer Centricity” to lead to Customer Delight Customer Centricity at the core of strong Asset franchisee Deep branch penetration & Hire Local Relationships with dealers & Call Centers Banking Ombudsman Personnel manufacturers • Ensures being close to the • Establish relationships and • 400+ Seat
Slide 46: About AU Small Finance Bank
7. About AU Small Finance Bank 46
Slide 47: 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 21,675 crore which successfully transited from an Asset Financing NBFC to a SFB; star
Slide 48: 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 by 2022 coveted employer that is admired for: • That is admired as the epitome of financial • Making every customer feel supreme while being inclusion and economic
Slide 49: 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 9MFY19 INR 1000 Crore Fund Manager Investment by Channel Partner Temasek Holdings NBFC – Asset Finance Company Small Finance Bank CA, SA, Deposits, Lockers, Payments & Onl
Slide 50: Product Offerings
Diversified Bouquet of Products with focus on Retail Small & Mid-Corporate – Existing Retail Assets – Existing Products Products Secured Business Loans - Secured Business Loans – Parameter Wheels (Vehicle Loans) NBFC Real Estate Group MSME SME Commenced • 1996 • 2007 • 2012 • 2012 • 2012 • Traders,
Slide 51: Experienced Board of Directors
Experienced Board of Directors Board of Directors Mr. Mannil Venugopalan Ms. Jyoti Ishwar Chandra Mr. Raj Vikash Verma Mr. Krishan Kant Rathi Independent Director Chairman and Narang Independent Director 35+ years of experience Independent Director Independent Director 29+ years of experience Master
Slide 52: Historical Financial & Operational Performance
8. Historical Financial & Operational Performance 52
Slide 53: Robust Operating and Financial Performance (1/2)
Robust Operating and Financial Performance (1/2) Total Revenue and PAT Yields2 and Cost of Funds3 INR Crore NII + OI 4 7.8% 8.1% 9.1% 9.0% 9.4% 9.3% 7.4% 17.9% 17.7% 17.5% 17.1% 2403 16.5% 2155 14.7% 14.3% 11.6% 11.2% 10.6% 1419 10.0% 9.6% 8.4% 1015 738 7.9% 619 446 305 212 292 264 80 92 140 1 FY13
Slide 54: Robust Operating and Financial Performance (2/2)
Robust Operating and Financial Performance (2/2) Growth Trajectory Networth and Capital Infusion # of Infusion active 146,277 175,531 189,175 225,713 280,349 358,080 457,507 - 86 39 - 172 3 480 loan (INR Crore) accounts 21,765 3,035 16,038 2,281 Gross AUM 1,988 Net Worth (INR Crore) 10,734 8,221 (IN
Slide 55: 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 56: 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 56
Slide 57: 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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