Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q3 FY23 Earnings Presentation
46 slides from Au Small Finance Bank's earnings presentation, Jan 19, 2023
Slide 1: Exchange filing cover letter for investor presentation
Ref. No.: AUSFB/SEC/2022-23/454 Date: 19th January, 2023 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 Q3'FY23
BADLAAV HUMSE HAI INVESTOR PRESENTATION Q3’FY23 SMALL INCE | Governed
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 Appointed Ms. Malini Thadani as an Independent Director; Brings global leadership experience on sustainability & ESG Awarded certificate of recognition for ‘Excellence in Corporate Governance’ at 22nd National Awards of ICSI Recognised as “Best Small Finance Bank” for 2022 by BT
Slide 5: Key Messages
❑ Q3’FY23 was another quarter of strong and consistent performance across parameters delivering healthy & calibrated loans and deposits growth, stable margins and asset quality, and sustained traction across credit cards and other digital initiatives amidst a challenging macro environment ❑ Collecti
Slide 6: Key Operating Highlights
❑ Yield on advances saw marginal uptick at 13.4% vs 13.3% in Q2’FY23; Margins remained stable at 6.2% partly supported by equity capital raise in Q2’FY23 ❑ The quarter saw a 14bps increase in cost of funds with Q3’FY23 CoF at 6.0%; Amidst the rising interest rate scenario, cost of funds remains a ke
Slide 7: Q3'FY23 Financial performance snapshot
Q3’FY23 Financial performance snapshot ₹ 61,101 Cr Deposits +16% YTD ❑ Balance Sheet crossed 80,000 Cr mark this quarter, along with Net worth of ₹ 10,500 Cr+ Disbursements ₹ 10,012 Cr ❑ Deposits crossed ₹ 60,000 Cr; CASA ratio at 38%; CASA + Retail TD mix at 70% ❑ With a view to optimise borrowing
Slide 8: Significant progress in digital since launch of AU 0101
We have made significant progress in digital since launch of AU 0101 Jun‘21 (in Lacs, unless specified otherwise) Sep’22 Dec’22 (Soft launch) Engagement Digital customers 4.5 14.3 16.3 Digital engagement at Monthly Active Users 2.3 8.1 9.2 ~4x vs Jun’21 levels Customers with pre- 2.3 8.6 8.8 approve
Slide 9: Geographical presence
Geographical presence 21 States and 3 UTs 1,015 Touchpoints 240 Districts 709 Locations 489 ATMs Touchpoints Break-up J&K 2 HP 15 29% Punjab 52 Chandigarh 3 Uttarakhand 1 Haryana 52 (+3) Delhi 37 (+4) 71% UP 18 Rajasthan Assam 1 394 (+8) Bihar 1 Urban Core MP 134 (+4) Jharkhand 1 AU Gujarat Asset 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% (24%) 36% Urban Core (35%) 64% 77% (65%) (76%) 2% 2% 1% Rajasthan 0% 1% 3% 1% 3% 3% Maharashtra 3% Delhi 5% 29% Punjab 17% 7% 37% Haryana Gujarat 7% Madhya Pradesh 10% Himachal Pradesh 10% Ut
Slide 11: 2. Operating & Financial Highlights
2. Operating & Financial Highlights Calibrated growth in assets and liabilities along with focus on productivity NII up 41% YoY & Core PPOP up by 22% YoY Highest ever quarterly profit (ex-Aavas) at ₹ 393 Cr Asset quality improved further - GNPA declined to 1.81% and Restructured advances at 1.4%
Slide 12: 9M'FY23 Financial highlights
9M’FY23 Financial highlights Net Interest Income Total Income PAT (₹ Crore) 1,003 3,212 6,632 784 2,298 4,937 9M'FY22 9M'FY23 9M'FY22 9M'FY23 9M'FY22 9M'FY23 Yield on Advance Cost of Funds Net Interest Margin RoA RoE Vs. Vs. Vs. Vs. Vs. 13.8% 6.1% 5.9% 1.9% 15.6% (9M’FY22) (9M’FY22) (9M’FY22) (9M’FY
Slide 13: Quarterly trends of key parameters
Quarterly trends of key parameters Customers Employees Shareholders’ Funds Total B/S Assets (in Lacs) (in 000s) 35.7 10,114 10,540 33.3 29.9 28.7 77,878 80,703 30.7 27.8 27.8 27.5 25.5 69,078 71,041 23.7 7,514 7,789 7,127 58,645 Q1'FY23 Q3'FY22 Q3'FY23 Q4'FY22 Q2'FY23 Q1'FY23 Q3'FY22 Q1'FY23 Q1'FY23
Slide 14: Quarterly trends of key parameters
Quarterly trends of key parameters Net Interest Income Total Income PAT 393 1,153 2,413 1,083 2,240 346 343 937 976 302 820 1,978 1,979 268 1,772 Q1'FY23 Q1'FY23 Q1'FY23 Q3'FY22 Q3'FY22 Q3'FY22 Q2'FY23 Q3'FY23 Q2'FY23 Q3'FY23 Q3'FY23 Q4'FY22 Q4'FY22 Q4'FY22 Q2'FY23 Net Interest Margin RoA RoE 6.3% 6
Slide 15: Yield and spreads
Yield and spreads Incremental Spreads Gross Advances Spreads 13.7% 13.4% 13.1% 13.3% 13.3% 13.4% 12.7% 12.7% 13.0% 12.1% 7.8% 7.7% 7.5% 7.5% 7.4% 7.4% 6.8% 6.9% 7.0% 6.7% 6.1% 6.3% 5.9% 5.8% 6.0% 5.7% 5.7% 5.7% 5.3% 5.3% Q3'FY22 Q4'FY22 Q1'FY23 Q2'FY23 Q3'FY23 Q3'FY22 Q4'FY22 Q1'FY23 Q2'FY23 Q3'FY23
Slide 16: Profit & Loss statement
Profit & Loss statement (All Figures in ₹ Crore) 9M'FY23 9M'FY22 YoY Q3'FY23 Q3'FY22 YoY Q2'FY23 QoQ In Q3’FY23 : Income ❑ Core PPOP growth is robust at 22% YoY led Interest Earned 5,931 4,255 39% 2,118 1,496 42% 1,992 6% by NII growth of 41% Interest Expended 2,718 1,957 39% 965 676 43% 909 6% Net
Slide 17: Balance sheet
Balance sheet (All Figures in ₹ Crore) 31st Dec’22 31st Dec’21 YoY 30th Sep’22 QoQ 31st Mar’22 YTD ❑ Net worth of the Bank has now Liabilities surpassed ₹ 10,500 Cr, a growth of 5x Shareholders Fund 10,540 7,127 48% 10,114 4% 7,514 40% since commencement of banking Deposits 61,101 44,278 38% 58,335
Slide 18: Other Income
Other Income (All Figures in ₹ Crore) 9M'FY23 9M'FY22 YoY Q3'FY23 Q3'FY22 YoY Q2'FY23 QoQ Loan Assets Processing & Other Fees 454 262 73% 171 140 22% 150 14% General Banking, Cross Sell & Deposits related fees 189 108 75% 74 40 84% 63 18% PSLC Fees 39 144 -73% 14 77 -82% 13 11% Miscellaneous 65 21 2
Slide 19: Profitability ratios
Profitability ratios Cost to Income (%) RoA (%) RoE (%) 61.6% 61.9% 63.0% 62.3% 58.2% 58.6% 58.1% 55.3% 2.2% 17.4% 2.0% 1.9% 1.8% 15.2% 15.6% 14.8% Q3'FY22 Q3'FY23 9M'FY22 9M'FY23 Q3'FY22 Q3'FY23 9M'FY22 9M'FY23 Q3'FY22 Q3'FY23 9M'FY22 9M'FY23 Cost to Income ratio Core Cost to Income Ratio RoA Compo
Slide 20: 3. Liabilities Update
3. Liabilities Update CASA ratio at 38%; CASA + Retail TD at 70%; Retail Term deposits grew 10% QoQ % CD Ratio at 91% CoF for Q3’FY23 at 6.0%; 9M’FY23 at 5.8% Securitized ₹ 1,164 Cr of loans in Q3’FY23
Slide 21: Scale low cost, retail-focussed sustainable liability franchise
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 Fundamental Products Mar'18 6,686 80 212 14 2017 Liabilities CA, SA, TD Garner deposits with customer mix ranging from Lockers Government, Co-operative Insurance Ma
Slide 23: Deposits snapshot
Deposits snapshot Focus on granular deposits and customer profiles Total Deposits 44,278 52,585 54,631 58,335 61,101 5% 5% 5% 4% 4% CD Book 333 1,506 1,224 588 546 8% 12% 12% 10% 11% 11% 9% 11% 2,819 TASC 12% 13% 2,867 12% 2,211 12% 13% 2,569 13% 14% Govt 1,784 20,652 21,807 17,039 19,006 Banks 15,5
Slide 24: 4. Asset Business Update
4. Asset Business Update Sustainable and Scalable business model; 90% loans retail & 93% loans secured Collection Efficiency for Q3’FY23 at 107% GNPA ratio continue to gradually decline to 1.81% vs 1.90% QoQ PCR at 72% (75% 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 reduced by 9 bps QoQ to 1.81% Gross Assigned/ Disbursements Vintage Gross Gross Segments Advance Securitised (year) Advances NPA Q3'FY23 ❑ Standard Restructured accounts declined to 1.4% of Yield (%) loans Wheels 1996 19,481 13.9% 432 2,051 3,864
Slide 27: Provisioning snapshot
Provisioning snapshot NCL table All Figures are in ₹ Crores Credit Loss Q3’FY23 Q3’FY22 Q2’FY23 Repo & POS Loss 21 42 30 Write off 27 39 23 Less: Bad Debt Recovery* -11 -2 -4 Net Credit Loss 37 79 48 Net Credit Loss (as % of Avg. Total Assets) 0.19% 0.57% 0.26% Provisioning table Credit Cost - Net I
Slide 28: Overview of provisions
Overview of provisions Dec’22 Sep’22 Particulars No. of Loan No. of Loan Provisions Coverage Provisions Coverage loans Amount loans Amount GNPA 45,405 1,019 693 68% 44,111 997 667 67% Covid related restructuring (Standard) 10,472 779 127 16% 13,640 895 148 17% Contingency provisions 98 129 Floating
Slide 29: 5. Tech Update
5. Tech Update 16.3 Lacs digital customers; MAU at 9.2 Lacs 36% customers acquired via digital products and channels in Q3’FY23 ~3.9 Lacs live credit cards Awarded ‘Best Technology Bank’ & ‘Best Digital Engagement’ by Indian Banks’ Association (IBA) in SFB & PB category
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 100 35 No. of customers (Lacs) 6.8 Lacs 30 25 Acquisition 20 <50 15 FY 20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY 21 FY 22 FY 23 Branch Digit
Slide 32: AU 0101 – strong adoption since launch
AU 0101 – strong adoption since launch Tech Savvy Monthly Active Customer Base Digital Customers Customers Users Sep‘22 ~33.3 Lacs 20.1 Lacs 14.3 Lacs 8.1 Lacs Dec‘22 ~35.7 Lacs 21.6 Lacs 16.3 Lacs 9.2 Lacs QoQ 7% 7% 14% 14% >3x digital customers since AU 0101 launch 4x Monthly Active Users since AU
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 Customer profile SA acquisition
Slide 34: Credit Card - continues to scale with strong performance
Credit Card - continues to scale with strong performance across key metrics 3.9 Lacs 53% 32% ₹ 1.3 Lacs 63% Cards live Cards issued to NTB 1st time Credit Card users Average limit per card Urban customers ▪ LiT, India’s first customizable credit card, is our highest selling card variant ▪ Monthly is
Slide 35: UPI QR - deepening our relationship with small merchants
UPI QR - deepening our relationship with small merchants Acquisition 8.7 Lacs 67% 2.2 Lacs UPI QRs installed till Q3’FY23 Activation rate New customers acquired through UPI QR till Q3’FY23 1.6 Cr ~1.8 Lacs ₹ 1,469 Cr Transactions in Q3’FY23; Daily average Value of transactions in 18% QoQ transaction
Slide 36: Our digital proposition continues to win high ratings and accolades
Our digital proposition continues to win high ratings and accolades Best Technology Bank Best Digital Engagement At 18th Annual Banking Technology Conference, Expo and Awards 2022 by Indian Banks Association (IBA) Video Banking under Payment and SFB Published as a case study by AWS category (https:/
Slide 37: 6. Other Key Updates
6. Other Key Updates Awarded certificate of recognition for ‘Excellence in Corporate Governance’ at 22nd National Awards of ICSI Released our first Sustainability Report based on GRI framework; externally assured by PwC Sustainalytics has rated our ESG risk at “Medium” Skill development, Rural sport
Slide 38: Financial & Digital Inclusion update
Financial & Digital Inclusion update Universal Access to Financial Services ➢ 30% of our total touchpoints/branches - 304 are in unbanked rural centres (Tier-VI, population less than 5,000 & Tier-V, population less than 10,000) ➢ Present in 52 Special Focus Districts* with 93 touchpoints covering 24
Slide 39: 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 - COE for Skills Development 1st Sustainability Report Sustainability leadership streng
Slide 40: Award & Recognitions
Award & Recognitions Best Small Finance Bank Certificate of Recognition for xx Excellence in Corporate Governance At 22nd National Awards of ICSI by BT-KPMG Company with Great Power to Persist Best Technology Bank Managers 2022 Award For maintaining 76% Best Digital Engagement persistency of APY Acc
Slide 41: Shareholding pattern as on 31st Dec'22
Shareholding pattern as on 31st Dec’22 % of Shareholding Pattern shareholding Others Promoter & Promoter group 25.6 Individual 5.6% Promoter & Promoter Group DII 20.6 8.3% FII 39.9 25.6% Individual 8.3 Others 5.6 Total 100.0 Mutual Fund 11.6% 39.9% Foreign Institutional Investors (FII) 4.7% 4.3% Ins
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 Held leadership positions at IMGC, CERSAI, PFRDA, etc. Independent Directors Executive Directors Mr. H R Khan Ms. Jyoti Narang Mr. K
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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