Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q3 FY2022 Earnings Presentation
63 slides from Edelweiss Financial Services's earnings presentation, Jan 31, 2022
Slide 1: Cover letter to stock exchanges
EW/Sec/2022/16 January 31, 2022 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E), Mumbai – 400 001. Mumbai – 400 051. Scrip Code: 532922 Symbol: EDELWEISS Dear Sir/Madam, Sub: Investor Presentation Please find attac
Slide 2: Earnings update – Quarter ended Dec 21
Edelweiss Financial Services Limited Earnings update – Quarter ended Dec 21
Slide 3: Contents
Contents 1 Overview & Highlights 3 2 Update on Key Priorities 20 3 Business Performance 26 4 Governance & Corporate Responsibility 55 Addenda – Update on Mutual Fund & Alternative Asset Management 2
Slide 4: Overview & Highlights
Overview & Highlights Quarter ended Dec 21
Slide 5: Edelweiss at a glance – Quarter ended Dec 21
Edelweiss at a glance – Quarter ended Dec 21 Net Worth Ex-Insurance PAT BVPS INR 8,663 Cr INR 127 Cr INR 74 (FV ₹1) Liquidity Customer Assets INR 4,800 Cr INR 3,47,400 Cr 4
Slide 6: We are a diversified company across five clusters
We are a diversified company across five clusters Edelweiss Financial Services Ltd (EFSL) Credit Asset Management Insurance Asset Wealth Housing Alternative Reconstruction General Management NBFC Mutual Fund Life Insurance Finance Asset Mgt Insurance ECL Finance Edelweiss Edelweiss Edelweiss Edelwei
Slide 7: Performance overview – Quarter ended Dec 21
Performance overview – Quarter ended Dec 21 1 Steady performance continues across all businesses Slide 7 - 10 2 Growth in customer franchise enabled by digital ecosystem Slide 11 - 13 3 Robust Balance Sheet - comfortable liquidity and well capitalized businesses Slide 14 - 19 4 On track on our 3 key
Slide 8: Steady performance continues across businesses (1)
1 Steady performance continues across businesses (1) • Entered into a CLM partnership with Indian Bank in the quarter; ongoing disbursals NBFC with Central Bank of India • Retail Collection efficiency at 93% for the quarter • 33% QoQ increase in Disbursements; retail collection efficiency at 98% for
Slide 9: Steady performance continues across businesses (2)
1 Steady performance continues across businesses (2) Asset • Robust recoveries at ~INR 2,500 Cr of which ~INR 200 Cr were from retail portfolio Reconstruction • Share of retail assets in capital employed at ~11% in Dec 21, YoY growth of ~4x • Gross Premium grew at 15% YoY Life Insurance • Unique cli
Slide 10: Healthy profitability across clusters
1 Healthy profitability across clusters INR Cr Asset Asset Credit Wealth* Management Reconstruction 68 54 37 22 23 13 17 9 Dec 20 Dec 21 Dec 20 Dec 21 Dec 20 Dec 21 Dec 20 Dec 21 *For comparison, EFSL share in Edelweiss Wealth Management adjusted to ~44% for Dec 20 9
Slide 11: Healthy profitability across businesses
1 Healthy profitability across businesses INR Cr Business Quarter ended Dec 21 Quarter ended Dec 20 NBFC 34 14 Housing Finance 3 (1) Mutual Fund 10 1 Alternatives Asset Management 12 8 Asset Reconstruction 68 54 Life Insurance (53) (41) General Insurance (29) (24) EFSL share in Edelweiss Wealth Mana
Slide 12: Strong growth in customer franchise continues
2 Strong growth in customer franchise continues Customer Assets (INR Cr) 347,400 264,800 205,300 Dec 19 Dec 20 Dec 21 Customer assets seeing a steady ~30% YoY growth for the past 2 years 11
Slide 13: Enabled by digital ecosystem (1)
2 Enabled by digital ecosystem (1) Mutual Fund Edelweissmf.com Einvest Mobile App Informative experience with one Android & iOS based of the shortest customer mobile application transaction journeys CRM Edelweiss Galaxy Comprehensive CRM Distributor transaction for customer service portal Leveraging
Slide 14: Enabled by digital ecosystem (2)
2 Enabled by digital ecosystem (2) General Insurance Digitalization across Insurance Value Chain Enterprise Product Channel Underwriting Sales Claims Functions Design Partners 100% Digitized SAP Suite Innovation Partners Paperless Experience Data Driven Customization Digital Assets AWS Full Stack Au
Slide 15: Robust balance sheet with well-capitalised businesses
3 Robust balance sheet with well-capitalised businesses Borrowings reduced by ~INR 12,200 Cr over 2 years; net D/E stands at 2x Strong capitalization across businesses Adequate liquidity of INR 4,800 Cr at ~20% of borrowings Credit assets are conservatively provided for, well above IRAC norms 14
Slide 16: Borrowings reduced by ~INR 12,200 Cr over last 2 years
3 Borrowings reduced by ~INR 12,200 Cr over last 2 years Borrowings (INR Cr) 36,850 29,400 24,650 Dec 19 Dec 20 Dec 21 Net D/E improved from 3x in Dec 20 to 2x in Dec 21 15
Slide 17: Strong capitalization across businesses
3 Strong capitalization across businesses Businesses Metric Value NBFC Capital Adequacy 27.7% Housing Finance Capital Adequacy 26.2% Asset Reconstruction Capital Adequacy 37.6% Life Insurance Solvency Ratio 190% General Insurance Solvency Ratio 177% 16
Slide 18: Cash flow plan
3 Cash flow plan INR Cr Jan 22 to Dec 22 Opening Available Liquidity (A) 4,800 Inflows Expected Inflows 10,000 Fresh Borrowings 5,500 Total Inflows (B) 15,500 Outflows Repayments 11,200 Disbursements 5,000 Total Outflows (C) 16,200 Closing Available Liquidity (A+B-C) 4,100 17
Slide 19: Assets in each tenor range adequately cover liabilities
3 Assets in each tenor range adequately cover liabilities INR Cr Assets Liabilities Gap Upto 1 year 17,250 13,850 3,400 1-3 years 12,900 11,950 1,950 3 years+ 13,300 10,850 2,450 18
Slide 20: Credit assets are conservatively provided for
3 Credit assets are conservatively provided for Balance Sheet Provisions IRAC Provisions IndAS Provisions (INR Cr) 714 687 532 246 222 180 Dec 19 Dec 20 Dec 21 We have consistently provided for higher than IRAC norms 19
Slide 21: Update on Key Priorities
Update on Key Priorities oO Edelweiss Ideas create, values protect
Slide 22: Key priorities for the next 12 months
Key priorities for the next 12 months 1 Demerger and listing of Edelweiss Wealth Management 2 Reduce wholesale credit assets 3 Scale up our Asset Management and Insurance businesses* *Refer to Addenda on Mutual Fund and Alternative Asset Management for deeper insights on our Asset Management cluster
Slide 23: Demerger and listing of Edelweiss Wealth Management
1 Demerger and listing of Edelweiss Wealth Management Phase I • PAG’s strategic investment in Edelweiss Wealth Management By quarter • Segregation of Edelweiss Wealth Management business after regulatory Phase II ending approvals Mar 22 • Filing of regulatory applications for demerger and listing By
Slide 24: Reduce Wholesale Credit Assets
2 Reduce Wholesale Credit Assets • Progress made with successful workouts of over ~INR 3,000 Cr in the past 18 months by - • Strengthening developer groups through addition or replacement of developers • Syndicated interest for financing RE projects - both for takeover and completion financing • The
Slide 25: Significant growth in Asset Management cluster
3 Significant growth in Asset Management cluster Asset Management Cluster AUM (INR Cr) 112,100 78,900 51,000 Dec 19 Dec 20 Dec 21 Asset Management AUM more than doubled over the past 2 years to INR 112,100 Cr 24
Slide 26: Insurance cluster continues to scale up
3 Insurance cluster continues to scale up LI – Gross Premium for the quarter (INR Cr) GI – Gross Premium for the quarter (INR Cr) 339 295 239 117 61 42 Dec 19 Dec 20 Dec 21 Dec 19 Dec 20 Dec 21 Gross Premium grew at 15% YoY for LI and 92% YoY for GI 25
Slide 27: Business Performance – Credit
Business Performance Credit
Slide 28: Credit cluster at a glance
Credit Credit cluster at a glance Quarter ended Dec 21 Equity Credit Assets Profit After Tax INR 4,655 Cr INR 18,666 Cr INR 37 Cr 27
Slide 29: NBFC: Business performance snapshot
NBFC NBFC: Business performance snapshot Key Metrics for the quarter Business Update • Focus continues on asset light business model: Equity (INR Cr) 3,885 o Steady disbursal under CLM program with Central Bank of India Credit Assets (INR Cr) 14,083 o MoU signed with Indian Bank for CLM partnership;
Slide 30: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot INR Cr Quarter ended Quarter ended Dec 21 Dec 20 AUM 8,652 11,953 Loan book 8,129 11,520 Equity 3,885 3,708 Gross Revenue 529 497 Net Revenue 162 52 Opex 94 140 Credit Cost 27 (50) Profit After Tax 34 14 GNPA 3.09% 3.53% NNPA 2.31% 2.80% Total Provision Cove
Slide 31: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update • Gradual scale up in disbursements; 33% increase QoQ Equity (INR Cr) 769 o ~INR 400 Cr disbursed during the quarter Credit Assets (INR Cr) 4,583 • Collection efficiency at 98% for the current
Slide 32: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot INR Cr Quarter ended Quarter ended Dec 21 Dec 20 AUM 4,320 4,477 Loan book 3,422 3,733 Equity 769 782 Gross Revenue 138 128 Net Revenue 56 31 Opex 29 26 Credit Cost 23 17 Profit After Tax 3 (1) GNPA 3.80% 1.60% NNPA 2.98% 1.40% Total Pr
Slide 33: Business Performance – Asset Management
Business Performance Asset Management
Slide 34: Asset Management cluster at a glance
Asset Management Asset Management cluster at a glance Quarter ended Dec 21 Equity AUM Profit After Tax INR 389 Cr INR 112,100 Cr INR 22 Cr Fee Income INR 105 Cr Refer to Addenda on Mutual Fund and Alternative Asset Management for deeper insights on our Asset Management cluster 33
Slide 35: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update • Strong total net inflows of ~INR 11,900 Cr during the Equity (INR Cr) 189 quarter of which net equity inflows was at ~INR 2,300 Cr • Equity AUM grew ~2.4x YoY to INR ~19,200 Cr AUM (INR Cr) ~81,900 •
Slide 36: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot INR Cr Quarter ended Quarter ended Dec 21 Dec 20 AUM 81,900 49,000 Net New Money 11,900 2,700 Equity 189 161 Revenue 42 30 Opex 32 28 Profit After Tax 10 1 35
Slide 37: Consistent expansion of investor and partner reach
Mutual Fund Consistent expansion of investor and partner reach MF Equity AUM (INR Cr) Monthly average active distributors (#) 19,200 3,880 1,980 8,000 1,630 4,900 Dec 19 Dec 20 Dec 21 Dec 19 Dec 20 Dec 21 SIP AUM (INR Cr) Active Folios (in Lakhs) 155 9.2 93 53 3.2 3.6 Dec 19 Dec 20 Dec 21 Dec 19 Dec
Slide 38: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update • Deployed ~INR 1,440 Cr during the quarter & ~INR 2,900 Cr Equity (INR Cr) 200 YTD Dec 21 AUM (INR Cr) ~30,200 • Launched 2 new funds during the quarter - ISAF III and Credit Plus
Slide 39: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot INR Cr Quarter ended Quarter ended Dec 21 Dec 20 AUM 30,200 29,900 Deployed AUM 16,250 12,000 Equity 200 32 Revenue 71 51 Opex 58 39 Profit After Tax 12 8 38
Slide 40: Alternative assets overview
Alternative Asset Mgt Alternative assets overview Alternative Asset Mgt AUM – Strategy wise Deployed AUM – Strategy wise 11% 11% 37% 20% 44% INR 30,200 Cr 30% INR 16,250 Cr 32% 15% Distressed Credit Fund Structured Debt Fund Distressed Credit Fund Structured Debt Fund Real Estate Credit Fund Infrast
Slide 41: Business Performance – Asset Reconstruction
Business Performance Asset Reconstruction
Slide 42: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 2,411 • Robust recoveries of ~INR 2,300 Cr from wholesale portfolio and ~INR 200 Cr from retail portfolio AUM (INR Cr) ~41,800 • Acquired assets worth ~INR 1,200 Cr Capital employed ~5
Slide 43: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot INR Cr Quarter ended Quarter ended Dec 21 Dec 20 AUM 41,800 40,800 Capital Employed 5,268 5,016 Wholesale assets 4,688 4,868 Retail assets 580 148 Equity 2,411 2,177 Gross Revenue 241 228 Opex 35 26 Profit After Tax 68 54 Edelweiss’ share in P
Slide 44: Business Performance – Insurance
Business Performance Insurance
Slide 45: Insurance cluster at a glance
Insurance Insurance cluster at a glance Quarter ended Dec 21 Gross Premium Policies Issued Customer Reach INR 456 Cr # 1,08,100 ~ 28 lakhs 44
Slide 46: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update Equity (INR Cr) 527 • Individual APE CAGR of 26% since FY17 against industry growth at 13% Individual APE (INR Cr) 100 • Dominant share of Traditional Par and Non-Par at ~80% #Policies Issued ~14
Slide 47: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot INR Cr Quarter ended Quarter ended Dec 21 Dec 20 Net Premium Income 331 286 Investment Income & Other Income 66 264 Total Income 397 550 Policy benefits & insurance policy liability 281 423 Other expenses 169 168 Profit After Tax (53) (41
Slide 48: Customer base and gross premium continue to grow
Life Insurance Customer base and gross premium continue to grow No of Unique Clients (#) Individual APE for the quarter (INR Cr) 344,300 96 100 320,000 87 288,200 Dec 19 Dec 20 Dec 21 Dec 19 Dec 20 Dec 21 Gross Premium for the quarter (INR Cr) AUM (INR Cr) 339 5,106 295 3,925 239 3,158 Dec 19 Dec 20
Slide 49: General Insurance: Business performance snapshot
General Insurance General Insurance: Business performance snapshot Key Metrics for the quarter Business Update • Robust GDPI growth of 89% YoY vis a vis industry growth of 8% Equity (INR Cr) 129 • Partner integrations with Alliance Insurance Brokers, Tata Motors OEM, Paybhima.com amongst others went
Slide 50: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot INR Cr Quarter ended Quarter ended Dec 21 Dec 20 Net Premium Income 61 45 Investment Income & Other Income 17 13 Total Income 78 58 Policy benefits & insurance policy liability 55 52 Other expenses 52 30 Profit After Tax (29) (24) 4
Slide 51: Strong growth enabled by digital platform
General Insurance Strong growth enabled by digital platform Gross Premium for the quarter (INR Cr) Unique Clients (#) 117 266,300 171,900 61 42 74,400 Dec 19 Dec 20 Dec 21 Dec 19 Dec 20 Dec 21 50
Slide 52: Business Performance – Wealth
Business Performance Wealth
Slide 53: Wealth Management: Business performance snapshot
Wealth Mgt Wealth Management: Business performance snapshot Key Metrics for the quarter Business Update • AuA grew ~33% YoY and ~7% QoQ with net new money AUA (INR Cr) ~1,93,500 for the quarter over INR 3,300 Cr LAS loan book ~2,500 • Strong quarterly financial performance with YoY revenue (INR Cr)
Slide 54: Wealth Management: Financial performance snapshot
Wealth Mgt Wealth Management: Financial performance snapshot INR Cr Quarter ended Quarter ended Dec 21 Dec 20 AUA 1,93,500 1,45,100 Equity 1,786 1,392 Gross Revenue 442 306 Net Revenue 355 251 Opex 280 195 Profit After Tax 55 39 Edelweiss’ share in PAT* 23 17 *Edelweiss share in Edelweiss Wealth Man
Slide 55: Wealth assets continue to maintain robust growth
Wealth Mgt Wealth assets continue to maintain robust growth Wealth Management AUA (INR Cr) No of Clients (#) 193,500 777,700 145,100 672,500 111,200 552,500 Dec-19 Dec-20 Dec-21 Dec-19 Dec-20 Dec-21 54
Slide 56: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 57: 11 Member Board with 6 Independent Directors
11 Member Board with 6 Independent Directors Mr. P N Venkatachalam Dr. Ashima Goyal Independent Director Independent Director • Banking sector expert and former member of the • Professor at Indira Gandhi Institute of Development Research Interim Pension Fund Regulatory Authority of India • Specialis
Slide 58: Significant institutional ownership
Significant institutional ownership Shareholding Pattern as on Dec 31, 2021 Key Shareholders above 1% Percent 1 Pabrai Investment Funds 7.9% Employee Trust 2 BIH SA 5.1% DIIs, Non 4.8% Promoter Group Institutions 3 TIAA CREF funds 5.0% & Others 23.1% 32.6% 4 Baron Asset Management 4.4% 5 LIC 2.6% 6
Slide 59: Our contribution to building a more sustainable tomorrow
Our contribution to building a more sustainable tomorrow Under the leadership of EdelGive Foundation, we have… Over ~INR 500 Cr mobilized Partnered with over 150 Assisted over 60% of EdelGive’s Ensured long term through commitments high caliber NGOs NGO partners to grow at a CAGR association with av
Slide 60: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 92 Districts Sustainable Women across 13 States Quality Education Livelihoods Empowerment Impacted ~2 million children 30,000 Individuals trained ~ 2 lakh women supported INR 105 Cr * INR 1.2 crore committed i
Slide 61: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 60
Slide 62: Safe Harbour
Safe Harbour DISCLAIMER : This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies (“Ed
Slide 63: Safe Harbour
Safe Harbour Slide 4: Net worth is including MI, investment in CCD by CDPQ of INR 866 Cr and excluding Edelweiss Wealth Mgt equity Slide 4: Ex-Insurance PAT is excluding MI Slide 4: BVPS has been computed by taking into account potential stake dilution from convertible instruments in NBFC Slide 4,14
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