Iifl Finance Limited · NSE:IIFL
Iifl Finance — Q2 FY22 Earnings Presentation
58 slides from Iifl Finance's earnings presentation, Oct 28, 2021
Slide 1: Revised presentation cover letter to exchanges
October 28, 2021 The Manager, The Manager, Listing Department, Listing Department, BSE Limited, The National Stock Exchange of India Ltd., Phiroze Jeejeebhoy Tower, Exchange Plaza, 5 Floor, Plot C/1, G Block, Dalal Street, Bandra - Kurla Complex, Bandra (E), Mumbai 400 001. Mumbai 400 051. BSE Scrip
Slide 2: Performance review Q2FY22
Performance review Quarter ended September 30, 2021 (Q2FY22) Bloomberg: IIFL IN IIFL Finance Limited October 27, 2021
Slide 3: Agenda
1. H1 & Q2 FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance 3. Corporate, Digital strategy & ESG updates
Slide 4: Key highlights (H1 and Q2 FY22)
Key highlights (H1 and Q2 FY22) Profit growth momentum- H1FY22 up 128% y-o-y; Q2FY22- up 37% y-o-y Net profit grew 128% y-o-y in H1FY22 (6 months) to ₹557 Cr. The quarterly net profit was ₹292 Cr, up 37% y-o-y and 10% q-o-q Liquidity comfort at all time high at ₹6,379 Cr As at September 2021, free c
Slide 5: Key metrics (H1 and Q2 FY22)
Key metrics (H1 and Q2 FY22) Loan AUM Return on- Equity / Asset1 Net Profit ₹44,249 Cr 20.5% / 2.8% ₹292 Cr Up 8% y-o-y Previous year Q2 17.7% / 2.5% Up 37% y-o-y Pre Provision Cost of Funds Gross / Net NPAs Operating Profit 8.7% 2.3% / 1.1% ₹582 Cr Down 33 bps y-o-y Previous year Q22 2.8% / 1.3% Fl
Slide 6: Business model overview
Business model overview Focussed on small ticket retail loans IFL Finance’s sweet spot in NBFC sector is in delivering credit to underserved segments of the society and in the under penetrated geographical areas in India. IIFL is uniquely placed to grow with bank partnerships as Banks’ appetite for
Slide 7: Strategy overview
Strategy overview Business Financial Risk mitigation Strategy Strategy Strategy Branches and technology Banks are keen to buy retail Strategy to grow small are two pillars of our loan portfolio or build the ticket retail loans with business strategy focussed same by co-lending. IIFL has divers
Slide 8: Loans are predominantly retail and granular
Loans are predominantly retail and granular Loan AUM (₹Cr): Diversified portfolio mitigates risk of asset concentration and cyclical gyration 16,176 22,281 34,904 37,951 44,688 44,249 2% 1% 1% 2% Commercial Vehicle 6% 8% 13% 14% Commercial & Real 12% 10% 15% Capital Markets 5% Estate 10% 7% 9% Micro
Slide 9: H1 & Q2 FY22 Financial performance
1. H1 & Q2 FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance 3. Corporate, Digital strategy & ESG updates
Slide 10: Consolidated results Quarterly
IIFL Finance – Consolidated results Quarterly Quarter ended September 30, 2021 (Ind AS -NBFC, HFC and MFI) Cr Q2FY22 Q2FY21 Y-o-Y Q1FY22 Q-o-Q Interest income 1,342.3 1,186.3 13% 1,245.0 8% Interest expense (744.1) (623.4) 19% (700.9) 6% Net interest income 598.2 562.9 6% 544.1 10% Income from assig
Slide 11: Consolidated results Half yearly
IIFL Finance – Consolidated results Half yearly Half-year ended September 30, 2021 (NBFC, HFC and MFI) Cr H1FY22 H1FY21 Y-o-Y FY21 Interest income 2,587.3 2,281.4 13% 4,719.2 Interest expense (1,445.0) (1,316.4) 10% (2,608.3) Net interest income 1,142.3 965.0 18% 2,110.9 Income from assigned assets
Slide 12: Income analysis Quarterly
Income analysis Quarterly Quarter ended September 30, 2021 (NBFC, HFC and MFI) Cr Q2FY22 Q2FY21 Y-o-Y Q1FY22 Q-o-Q Loan book using risk capital 28,874 28,311 2% 28,599 1% Securitized book1 3,987 1,534 160% 4,303 (7%) Loan Book (Ind AS Balance sheet) 32,861 29,845 10% 32,902 0% Assigned assets 11,388
Slide 13: Income analysis Half Yearly
Income analysis Half Yearly Half-year ended September 30, 2021 (NBFC, HFC and MFI) Cr H1FY22 H1FY21 Y-o-Y FY21 Loan book using risk capital 28,874 28,311 2% 29,784 Securitized book1 3,987 1,534 160% 3,829 Loan Book (Ind AS Balance sheet) 32,861 29,845 10% 33,612 Assigned assets 11,388 10,998 4% 11,0
Slide 14: Consolidated Balance sheet
IIFL Finance – Consolidated Balance sheet Unaudited as at September 30, 2021 (NBFC, HFC and MFI) ASSETS ₹ Cr LIABILITIES AND EQUITY ₹ Cr 1 Financial Assets 1 Financial Liabilities (a) Cash and Bank Balances 5,774 (a) Payables 107 (b) Receivables 125 (b) Borrowings (c) Loan Assets 32,774 - NCDs 10,62
Slide 15: Key Ratios
IIFL Finance – Key Ratios Particulars Q2FY22 Q2FY21 Q1FY22 H1FY22 H1FY21 NIM on Balance Sheet Assets 7.0% 7.6% 6.6% 6.7% 6.6% NIM on Assigned Assets 6.6% 6.3% 6.7% 6.5% 6.3% Cost-to-income 40.0% 33.6% 37.9% 39.0% 38.5% Core PPOP/ Average AUM 5.0% 5.4% 4.6% 4.9% 4.4% Provisions/ Core PPOP 37.8% 56.1%
Slide 16: Consistent financial performance and growth over years
Consistent financial performance and growth over years Loan AUM (₹ Cr) Profit after tax (PAT) (₹ Cr) ● In Q2FY22, loan AUM has grown for core products Core Synergistic Half- Annual Yearly at 3% qoq but for H1FY22, there is marginal 44,688 44,249 761 37,951 712 decline in loan AUM on 557 34,904 yoy,
Slide 17: Robust and improving financial position
Robust and improving financial position ● Annualised ROE for H1FY22 Return on assets (%) Return on equity (%) stood at 20.1%, driven by Annual Half yearly Half yearly annualised ROA of 2.7% Annualized Annualized ● Cost to income ratio rose 20.1% 2.7% 17.9% marginally to 39% due to 15.2% 15.3% 2.0% 2
Slide 18: Disbursements moving back to pre-Covid levels
Disbursements moving back to pre-Covid levels with recovery in the economic activity.. Disbursement trends (₹ In Crs) Gold Loan Home Loan 5,682 1,780 4,909 5,025 5,115 1,596 1,318 3,718 863 987 2,107 267 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Business Loa
Slide 19: H1 & Q2 FY22 Financial performance
1. H1 & Q2 FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance 3. Corporate, Digital strategy & ESG updates
Slide 20: Superior asset quality maintained through cycles
Superior asset quality maintained through cycles… Gross NPA (%) Net NPA (%) ● GNPA stands at 2.3% and NNPA at 1.1%, slightly higher 2.34% 1.76% 1.74% 2.04% 1.98% 1.08% than previous quarter, with 1.62% 0.82% 0.89% 0.52% 0.58% 0.49% 90 day lag impact of Covid Wave2, especially on MFI FY17 FY18 FY19 F
Slide 21: Covid second wave has marginal impact on asset quality
Covid second wave has marginal impact on asset quality Asset quality has been comparable to best-in-industry in all business segments Core growth segments Synergistic segments Home loans Business loans Construction & Real Estate finance Gross NPAs (%) Gross NPAs (%) Gross NPAs (%) 4.4% 1.8% 3.8% 1.4
Slide 22: Conservative provisioning across all segments
Conservative provisioning across all segments As at September 30, 2021 (NBFC, HFC and MFI) ₹ Cr Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Provision Business loan book Total 0-30 dpd 31-90 dpd 90+ dpd Provision % As per RBI As per ECL Home Loans 9,946.5 548.2 187.0 10,681.8 1.4% 5.2% 40.0% 100.
Slide 23: Restructuring & ECL Provision Movement
Restructuring & ECL Provision Movement As at September 30, 2021 (NBFC, HFC and MFI) ₹ Cr Restructuring Loan Loss Provisions Opening Closing Cumulative Net Addition Net Release Business Q2 FY22 Provision Provision Q2FY22 (B) (C) (A) (A+B+C) Home Loans 55.5 297.9 248.8 -3.4 (3.3) 242.2 Business Loans
Slide 24: H1 & Q2 FY22 Financial performance
1. H1 & Q2 FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance 3. Corporate, Digital strategy & ESG updates
Slide 25: Well diversified sources of funding
Well diversified sources of funding.. Resource profile is well diversified, with increasing share of bank loans Outstanding borrowing (₹ Cr) Bonds/ NCDs investors split (%) 15,395 17,982 24,539 26,141 25,734 28,426 29,270 Others, Public, 22.6% 12.3% Foreign CBLO Investors , 41.0% Banks/FIs, 8% 10% R
Slide 26: Structural Liquidity- Surplus across all buckets
Structural Liquidity- Surplus across all buckets Cr Surplus/ (Deficit) as a % of outflow (cumulative) 809% 116% 100% 98% 79% 43% 20% 21% 0% 43998 39548 43,998 35377 32,609 22924 29,538 17912 16,006 12079 9984 6697 4572 9,990 3,099 4,990 6,073 503 Up 14 days 1 month 2 months 3 months 6 months 1 year
Slide 27: Debt repayment obligation schedule, well covered
Debt repayment obligation schedule, well covered ₹ Cr Cash & Cash equivalents as on September 30, 2021 5,774 Earmarked cash & cash equivalents (2,116) 10,574 Free cash & cash equivalents 3,652 Liquid investments / Unutilised CC (+) 643 9,577 Undrawn credit lines (+) 2,078 9,207 Aggregate liquidity 6
Slide 28: Debt resource raising trend
Debt resource raising trend Term Loan Bonds Refinance ₹ Cr 3,987 3,889 3,717 500 908 425 918 1,822 1,402 320 1,005 3,062 2,981 2799 152 671 550 825 275 831 180 425 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 CRISIL long term rating at AA (Stable) IIFL Bonds garner 843 Cr CRISIL maintains rating at AA
Slide 29: Business segments review
1. H1 & Q2 FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance 3. Corporate, Digital strategy & ESG updates
Slide 30: Home loans – industry overview
Home loans – industry overview Housing loans outstanding at HFCs/NBFCs to grow by 8-10% in fiscal 2022 Home loans outstanding logged 16% CAGR over fiscals 2015-2020 22% Rising demand for housing 10.00 25% 20% 21% in tier-II-III cities is 9.00 8.00 20% expected to result into 7.00 surge in construc
Slide 31: Home loans – product overview
Home loans – product overview Distribution of AUM as at September 30, 2021 Primary focus on affordable and non-metro customers. 90% of home loans were disbursed to customers under PSL category Uttar Pradesh, Uttarakhand Andhra Target segment is salaried and self –employed Tamil Nadu, 12% Pradesh
Slide 32: Home loans – financial overview
Home loans – financial overview Assets Under Management (₹ Cr) Portfolio Yield (%) Self Employed Salaried 5,300 8,579 12,197 12,443 14,439 15,698 41% 48% 54% 58% 61% 62% 10.3% 10.3% 10.1% 10.1% 9.8% 59% 52% 46% 9.6% 42% 39% 38% FY17 FY18 FY19 FY20 FY21 Q2FY22 FY17 FY18 FY19 FY20 FY21 Q2FY22 Average
Slide 33: Business segments review
1. H1 & Q2 FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance 3. Corporate, Digital strategy & ESG updates
Slide 34: Business loans – industry overview
Business loans – industry overview Non-bank MSME credit to pick up gradually as the economy revives 5,000 27% 30% 23% 4,500 21% 25% 4,000 3,500 15% 20% 3,000 2,500 15% 2,000 8-10% 5-7% 10% 1,500 1,000 4% 3% 5% 500 1,661 2,112 2,546 3,136 3,621 3,765 3,866 4,050-4,150 4,400-4,500 - 0% FY15 FY16 FY17
Slide 35: Business loans – product overview
Business loans – product overview Distribution of AUM as at September 30, 2021 For business loans backed by cash flows South, 26% 34% of unsecured unsecured MSME portfolio West, 33% covered through CGTMSE guarantee scheme Focus on balancing prudent credit underwriting East, 7% with instant in-
Slide 36: Business loans – financial overview
Business loans – financial overview Assets Under Management (₹ Cr) Portfolio Yield (%) 8,117 7,805 16.1% 7,361 7,464 7,019 15.6% 15.6% 6,000 15.4% 14.9% 14.0% FY17 FY18 FY19 FY20 FY21 Q2FY22 FY17 FY18 FY19 FY20 FY21 Q2FY22 Onboarding Average Ticket Size (₹ Lakhs) Gross NPAs (%) 83.0 6.1% 5.7% 49.0 3
Slide 37: Business segments review
1. H1 & Q2 FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance 3. Corporate, Digital strategy & ESG updates
Slide 38: Gold loans – industry overview
Gold loans – industry overview Gold loan NBFCs to grow 14-16% this fiscal1 1,600 30% 1,400 24% 24% 25% 1,200 25,000 tonnes 1,000 14-16% 20% of gold is held by Indian 800 13% 12% 11-13% 15% Households 600 7% 10% (65% in Rural India) 400 5% 200 530 598 640 719 890 1,104 1,269 1,421 - 0% FY16 FY17 FY18
Slide 39: Gold loans – product overview
Gold loans – product overview Distribution of AUM as at September 30, 2021 Branches in more than 1150 towns/ cities Loan against gold ornaments for personal & business use with on-boarding LTV ~75% In-house loan origination tablet application South, 25% North, 24% equipped to screen customers
Slide 40: Gold loans – financial overview
Gold loans – financial overview Assets Under Management (₹ Cr) Portfolio Yield (%) 13,600 18.8% 17.8% 18.1% 19.0% 18.0% 13,149 17.3% 9,125 6,195 4,037 2,910 FY17 FY18 FY19 FY20 FY21 Q2FY22 FY17 FY18 FY19 FY20 FY21 Q2FY22 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 72 58 56 59 53 48 1.0%
Slide 41: Business segments review
1. Q2FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance 3. Corporate, Digital strategy & ESG updates
Slide 42: Microfinance – industry overview
Microfinance – industry overview Overall MFI to grow by 25-26% in FY22 1,200 70% 60% 1,000 53% 60% 46% 50% 800 40% 29% 26% 600 30% 400 17% 11% 10% 20% 200 10% 136 198 231 355 567 734 815 900 1,131 - 0% FY15 FY16 FY17 FY18 FY19 FY20 FY21 E FY22 P FY23 P Credit outstanding at NBFCs (Rs.bn) YoY change
Slide 43: Microfinance – product overview
Microfinance – product overview Distribution of AUM as at September 30, 2021 Small-ticket loans for purpose of income WestBengal, Assam, 1% UttarPradesh, 8% generation activities 2% Bihar, 19% Chhattisgarh, Target segment is rural and semi-urban self- TamilNadu, 1% 18% employed women in joint li
Slide 44: Microfinance – financial overview
Microfinance – financial overview Assets Under Management (₹ Cr) Portfolio Yield (%) 4,796 4,534 26.0% 25.4% 3,400 24.8% 2,286 23.4% 22.6% 22.3% 22.3% 840 110 238 FY16 FY17 FY18 FY19 FY20 FY21 Q2FY22 FY16 FY17 FY18 FY19 FY20 FY21 Q2FY22 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 34 36 2
Slide 45: Corporate, Digital strategy & ESG updates
1. H1 & Q2 FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance 3. Corporate, Digital strategy & ESG updates
Slide 46: Strategic & Digital updates during the quarter
Strategic & Digital updates during the quarter Gold Loan Home Loan Launched Co-branded Prepaid Card with Integrated with WhatsApp for better customer ICICI Bank for Gold Loan Customers engagement on post disbursal customer queries Online pre-qualification lead filtration form- Tied-up with GooglePay
Slide 47: Instant business loan on Whatsapp
Instant business loan on Whatsapp First NBFC in the country to launch instant business loan end to end journey on WhatsApp - 60000+ leads generated in 10 days of launch. Loan worth Rs.4.5 crs disbursed. Onboarding Journey Powered by AI Bot Ease of chat has been brought to Powerful AI-bot matches
Slide 48: Our recent partnerships with banks
Our recent partnerships with banks.. Bank Name Product Home Loan and Home Loan and Gold Loan Gold Loan MSME LAP MSME LAP Nature of Sourcing Servicing Co-lending Co-lending Co-lending agreement arrangement arrangement arrangement arrangement Funding by 100% 80% 80% 80% Partnering bank Mutually accept
Slide 49: Home loan: Aiming for inclusive growth
Home loan: Aiming for inclusive growth IIFL is firmly committed to support economic activity and financial inclusion through its loan offerings while adapting to changes in the external environment. 132,000+ loans to first- 49,500+ families benefitted time home buyers under CLSS 1180+ Cr. subsidy pr
Slide 50: Gold loan: Supporting small ticket borrowers
Gold loan: Supporting small ticket borrowers Gold loans are essentially small-ticket business loans 65% of gold loan are of less than 81% of the branches are located ₹ 50,000 value in tier II, III cities and rural areas 63% of loans given to small 6% of loans is for agricultural businesses purposes
Slide 51: Microfinance: Aiming for financial inclusion
Microfinance: Aiming for financial inclusion Microfinance loans are for income generating activities 86% of these benefited 15.8 lakhs+ families customers stay in the rural area benefited in 17 states with of the country financial intervention 7,205+ dairy farmers supported Supports self-employed wo
Slide 52: Distinguished Board of Directors
Distinguished Board of Directors IIFL Finance – Board of Directors Nirmal Jain, Chairman & Whole-time Director R Venkataraman, Managing Director Chandran R, Non-Executive Director MBA from IIM Ahmedabad, MBA from IIM Bangalore, Managing Director, Hamblin rank-holder CA and Cost B-Tech from IIT
Slide 53: Experienced senior management team
Experienced senior management team Rajesh Rajak Sanjeev Srivastava Sneha Patwardhan (Chief Financial Officer) (Chief Risk Officer) (Compliance Officer) 22+ years of work 13 years of experience in Chartered IIFL experience Accountant the field of Secretarial, Prior to this, he was SVP- Financ
Slide 54: IIFL's brand and credibility recognized at various forums
IIFL’s brand and credibility recognized at various forums IIFL Finance was listed as an IIFL Finance received 'India Most "Iconic Brand" by the Economic Admired Financial Services IIFL Finance 's MyMoney App as Times Provider' Award at Asian BFSI “Best Finance App” at National Leadership Awards Awar
Slide 55: Environment, Social and Governance (ESG) Initiatives
Environment, Social and Governance (ESG) Initiatives As a responsible corporate, IIFL Finance aims to deliver sustainable growth through financial products and services that help satisfy unmet societal needs, enable a thriving society, conserve environment and create long-term value for all The
Slide 56: IIFL HFL contribution to Environment Sustainability
IIFL HFL contribution to Environment Sustainability- Green affordable housing impact by green value partners • Pioneered Green Building concept in partnership with housing developers through "Kutumb" platform • It provides industry experts and housing developers, a platform to promote sustainable in
Slide 57: CSR projects continue amid covid with creative use of technology
CSR projects continue amid covid with creative use of technology Sakhiyon ki Badi (Rajasthan) Sakhiyon ki Baadi is an initiative aimed at eradication of female illiteracy from Rajasthan Learning centres has been set up for girls in the age group of 4 yrs. to 14 yrs. old The centres are located
Slide 58: Thank you
Thank you Published in October 2021 IIFL Finance Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B-23, Thane Industrial Area, Wagle Estate, Thane – 400604. This report is for information purposes only and does not construe to be any investment, legal or taxa