Utkarsh Small Finance Bank Limited · NSE:UTKARSHBNK
Utkarsh Small Finance Bank — Q3 FY24 Earnings Presentation
47 slides from Utkarsh Small Finance Bank's earnings presentation, Jan 27, 2024
Slide 1: Investor Presentation intimation letter to exchanges
SE/2023-24/100 January 27, 2024 The BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers 5th Floor, Exchange Plaza, C-1, Block G, Dalal Street, Fort Bandra Kurla Complex, Bandra East, Mumbai – 400001 Mumbai – 400 051 Scrip Code: 543942, 958095, 958226, 959644 NSE symbol: UT
Slide 2: Investor Presentation Q3 FY24
Slide 3: Key Highlights Q3, FY24
Key Highlights Q3, FY24 01 Credit growth 31% YoY; deposits growth 18% YoY Healthy growth in micro-banking loan portfolio – Micro-banking portfolio crossed ₹10,000 crore mark 02 Increasing share of secured loans in overall loan portfolio – share of secured loans increased to 35% of Gross Loan 03 Port
Slide 4: Key Highlights Q3'FY24
Key Highlights Q3’FY24 LIABILITIES FINANCIAL CAPITAL ASSET NETWORK ASSETS PERFORMANCE STRUCTURE QUALITY ₹16,407 cr. vs. ₹15,111 cr. vs. ₹116 cr. vs. ₹2,808 cr. vs. 880 vs. [794] 3.0% vs. [3.6%] [₹12,543 cr.] [₹12,847 cr.] [₹94 cr.] [₹1,863 cr.] Banking Outlets Gross NPAs Gross Loan Deposits Profit A
Slide 5: Journey and Franchise; Portfolio and Deposits Build Up
Journey and Franchise Portfolio Build Up Deposits Build Up Financial Performance Technology, ESG & CSR 4
Slide 6: Journey and Franchise
Journey and Franchise Committed journey of ~14 years from Microfinance to Small Finance Bank to Listed Company Significant presence in rural & semi urban locations and under penetrated States of the Country Differentiated branch network to ensure relevant product offerings for customers & ensuring c
Slide 7: Utkarsh Journey
Utkarsh Journey Highest ever annual profit of > ₹400 crore in FY23 Bank’s Capital + Reserves FY24 crossed ₹2,000 crore FY23 In Jul-23 Bank launched IPO to raise equity capital of ₹500 Launched digital on- crore; IPO Utkarsh Small Finance Bank Ltd. boarding of accounts Conversion of oversubscribed wa
Slide 8: Business Overview
Business Overview Focus on Financial inclusion, offer a range of financial products and services that address the specific requirements of customer segments Microbanking 61% Other Retail Loans 28% Joint Liability Individual MSME Loans Housing Group Loans Loans (Retail Assets) Loans Asset products 1
Slide 9: Diversified Distribution Network
Diversified Distribution Network Extensive physical network of Banking Outlets (Dec’23) Potential for Retail Assets within existing Branches (Dec’23) >50 Outlets Total 1 <50 Outlets MB MSME HL Wheels STATES Banking GB Outlets Outlets Locations Locations Locations No Outlets Outlets 2 Chandigarh: 3 8
Slide 10: Differentiated Branch Network
Differentiated Branch Network 794 830 851 871 880* ▪ Differentiated branch network to ensure relevant product offerings to the 602 605 customers as well as ensuring cost 564 579 594 efficiency of operations 230 251 257 269 275 ▪ All branches CBS enabled; customers can transact from any of the 880 De
Slide 11: Strategies
Strategies Continue diversifying asset portfolio ❑ Leverage wide base of existing customers in the unserved and underserved segments ▪ Extend products offering from JLG loans to individual loans, affordable housing loans and other new products ❑ Focus on offering working capital and term loans to MS
Slide 12: Portfolio Build-up
Portfolio Build-up Loan portfolio grew 31% YoY Rural & semi urban franchise, deep rooted understanding of our core geographies, proven track record - key strength of our micro-banking lending Increasing share of secured lending with build-up of MSME, Housing & CV / CE loan book 11
Slide 13: Loan Portfolio Build-up
Loan Portfolio Build-up CAGR% Loan Book (Mar-20) Product (FY20-9M FY24) Retail Loans Housing Micro-banking Loans 15% (MSME) Loans Other Retail Loans 81% 4% 1% Others* 2% Wholesale Lending (Excl BBG) 46% 16,407 Wholesale 14,892 Lending 14,394 5% 13,957 1,760 1,672 Microbanking 1,617 10,631 1,547 4,59
Slide 14: Micro Banking Lending
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Slide 15: Micro Banking Lending
Micro Banking Lending All Amounts in ₹ Crores Portfolio Outstanding Demographic Break up of MB Outlets URBAN METROPOLITAN 11% 3% 10,054 JLG: 94% 86% 9,216 9,059 9,292 MBIL: 6% Branches in 8,701 Rural & Semi- urban areas SEMI URBAN RURAL 48% 38% Geographical Split of MB Portfolio Presence across 12 M
Slide 16: Micro Banking Lending (Contd.)
Micro Banking Lending (Contd.) All Amounts in ₹ Crores Micro Banking Disbursements MBIL Product Portfolio Outstanding 3,020 2,619 553 2,304 2,366 470 387 1,897 332 252 Q3,FY23 Q4,FY23 Q1,FY24 Q2,FY24 Q3,FY24 Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 Demographic Break up of Portfolio o Micro Banking Individ
Slide 17: Micro Banking – Asset Quality
Micro Banking – Asset Quality Collection Efficiency (excl. Pre-Payments) 5.9% 6.1% 6.2% 97% 97% 96% 3.6% 3.8% 4.0% Q1'FY24 Q2'FY24 Q3'FY24 0.8% 0.9% 0.7% SMA 0.7% 0.5% 0.7% 0.9% 0.9% 0.9% 0.8% 0.8% 0.8% 0.8% 0.8% 0.7% 0.7% 0.7% 0.5% Jun'23 Sep'23 Dec'23 SMA 0 SMA 1 SMA 2 NPA Carrying floating provis
Slide 18: Other Retail Lending
Other Retail Lending MSME (Retail Assets) Housing Loans CE & CV Loans 17
Slide 19: MSME (Retail Assets) Lending
MSME (Retail Assets) Lending All Amounts in ₹ Crores Portfolio Outstanding 2,183 1,977 1,724 1,534 1,225 Secured Unsecured Micro LAP / Business Loans Business Loan Overdraft (LAP) Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 Disbursements (14% YoY Growth) o Significant presence in our core geography 11.5% 11.
Slide 20: Housing Loans
Housing Loans All Amounts in ₹ Crores Portfolio Outstanding 627 Retail Housing Loans Affordable Housing 590 557 519 461 o Significant presence in our core geography o Currently offering HL product from 49 locations, Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 significant headroom to expand within existing Di
Slide 21: CE & CV Loans
CE & CV Loans All Amounts in ₹ Crores Portfolio Outstanding 839 CV (New) CE (New) CV & CE (Used) 741 637 •89% of total •7% of total •4% of total 560 portfolio portfolio portfolio 429 Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 o Lending primarily to small fleet operator segment Disbursements (30% YoY Growth)
Slide 22: Wholesale Lending
Wholesale Lending All Amounts in ₹ Crores Portfolio Break up (Mar-20) Portfolio Break up (Dec-23) Portfolio - ₹1,760 crore (Dec-23) Rating Wise WSL FI Portfolio Break up Business Started Business Business Banking Group Banking in FY21 Banking Group 0% 28% Disbursement AA Category BBB Yield – 10.9% 2
Slide 23: Deposits Build-up
Deposits Build-up Deposits grew by 18% YoY; Retail Term Deposits grew 46% YoY Expanded General Banking Franchise significantly over last 2 year Targeting top-100 deposits districts of the country Focus on building retail franchise, reduced bulk deposits & top-20 deposits concentration 22
Slide 24: Deposits Trend & Composition
Deposits Trend & Composition All Amounts in ₹ Crores Deposits Trend Customer Base (in mn.) Growth led Deposits (18% YoY Growth) 2.53 million by RTDs 1.39 Total Deposit 1.29 1.14 1.18 1.25 Customers 17,000 101% 99% 1.06 95% 95% 97% 0.94 110% 16,000 15,000 100% 0.86 15,111 14,000 90% 13,967 13,965 13,
Slide 25: Deposits Trend & Composition (Contd.)
Deposits Trend & Composition (Contd.) All Amounts in ₹ Crores Deposits Composition Decline in Concentration to Top 20 Depositors % 21% 21% 19% 20% 20% CASA 60% 62% 62% 66% 68% CASA + RTD 2,895 2,884 2,973 2,571 2,775 Institutional Term Deposits 29% 40% 38% 38% 34% 32% Retail Term Deposits 21% 21% 18
Slide 26: Asset Quality Movement
Asset Quality Movement All Amounts in ₹ Crores Write off 151 67 82 92 49 Dec-23 Dec-22 Sep-23 Gross NPA % 3.0% 3.6% 2.8% PCR% 80.5% 88.3% 89.8% 94.6% 93.8% Net NPA % 0.2% 0.7% 0.2% 448 464 432 431 404 SMA 1 & 2 1.5% 1.4% 1.8% 1.9% 316 267 87 206 197 51 44 29 22 Dec'22 Mar'23 Jun'23 Sep'23 Dec-23 Mar
Slide 27: Financial Performance
Financial Performance Stable & consistent financial performance Focus on cost efficiency resulting healthy cost income ratio Profit after tax increased 24% YoY to ₹116 crore in Q3 FY24 Building floating provision to ensure resiliency 26
Slide 28: Enduring Profitability Metrics
Enduring Profitability Metrics Operating Profit & PAT – Quarterly Trend (₹ in crores) Operating Profit & PAT Y-o-Y (₹ in crores) 715 256 630 238 210 208 221 134 338 107 114 116 271 94 Q3' FY23 Q4' FY23 Q1' FY24 Q2' FY24 Q3' FY24 9M' FY23 9M' FY24 Operating Profit (PPoP) PAT Operating Profit (PPoP) P
Slide 29: Enduring Profitability Metrics (Contd.)
Enduring Profitability Metrics (Contd.) 3.1% 2.4% 53.3% / 12.7% 56.0% / 12.3% 9M FY23 9M FY24 9M FY23 9M FY24 2.8% 2.7% 2.3% Credit cost 54.9% 56.5% 57.0% 56.5% 54.7% 2.1% at 2.3% for Q3, FY24, 1.1% excl. floating provision 11.1% 12.8% 13.9% 10.0% 10.3% created of ₹14 crore Q3'FY23 Q4'FY23 Q1'FY24 Q
Slide 30: Return on Equity during Covid Cycle
Return on Equity during Covid Cycle Covid Cycle RoE Additionally, built floating provision cushion during this period; ₹134 Average: 15.1% crore as on Dec-23 22.8% 20.3% RoE back to pre- 18.5% covid levels on higher capital base 10.0% 4.1% FY20 FY21 FY22 FY23 9M FY24 29
Slide 31: Break-up of other income
Break-up of other income ₹ 71 crore ₹ 105 crore ₹ 83 crore 25% 26% 24% 14% 19% 20% 18% 23% 37% 40% 31% 22% Q3'FY23 Q2'FY24 Q3'FY24 Loan Processing Fee PSLC Income Recovery from written off accounts General Banking & Other Income 1/27/2024 30
Slide 32: CRAR & Tier 1
CRAR & Tier 1 All Amounts in ₹ Crores Particulars Dec-23 Dec-22 Sep-23 Risk Weighted Assets 11,720 9,517 10,906 Total Capital 2,717 1,940 2,707 Tier-I Capital 2,519 1,701 2,513 Tier-II Capital 198 239 194 PAT of Q3, FY24 of ₹ 116 crore not CRAR included in CRAR 23.18% 20.39% 24.82% Tier-I CRAR 21.49
Slide 33: Profit & Loss: Quarter and Nine Months Ended December 31, 2023
Profit & Loss: For the quarter & nine month ended December 31 , 2023 All Amounts in ₹ Crores st Particulars Q3’FY24 Q3’FY23 Y-o-Y Q2’FY24 Q-o-Q 9M’FY24 9M’FY23 Y-o-Y Limited Limited INCOME Review Audited Audited Review Audited Total Interest Earned 806 641 26% 756 7% 2,283 1,814 26% Less : Interest
Slide 34: Balance Sheet: As on December 31, 2023
Balance Sheet: As on December 31st, 2023 All Amounts in ₹ Crores December 31st, December 31st, September 30th, Particulars Y-o-Y Q-o-Q 2023 2022 2023 CAPITAL & LIABILITIES Limited Review Audited Audited Capital and Reserves 2,808 1,863 51% 2,687 4% Deposits 15,111 12,847 18% 13,965 8% Borrowings 1,7
Slide 35: Shareholding Pattern
Shareholding Pattern Bank Shareholders as on December 31st, 2023 Top 10 Shareholders as on December 31st, 2023 Utkarsh CoreInvest Limited Individuals & Mirae Asset (Mutual Funds) Others, Foreign Olympus ACF Pte. Ltd. 9.6% Companies, NRIs, 8.6% Bharti AXA Life Insurance Company Ltd. FPI, Triodos Sica
Slide 36: Diversified & Experienced Board
Diversified & Experienced Board Board Members of the Bank Parveen Kumar Gupta Ajay Kumar Kapur Part Time Non Executive Chairman & Independent Director Independent Director • Certified associate of the Indian Institute of Bankers • Currently engaged as an advisor to the United Nations • Previously as
Slide 37: Leadership Complementing Bank's Strengths
Leadership Complementing Bank’s Strengths Senior Management Team Govind Singh - Managing Director & Chief Executive Officer • Over 25 years of experience in the banking and financial services sector and in particular the microfinance industry • Previously associated with Utkarsh CoreInvest (Bank’s P
Slide 38: Tech, ESG & CSR
Tech, ESG & CSR Technology Setup to support Physical Infrastructure and Digital Requirement Integrating ESG Sensitivities into our operations & decision- making Contributing to the well-being of the society 37
Slide 39: Technology Setup to support Physical Infrastructure and Digital Requirement
Technology Setup to support Physical Infrastructure and Digital Requirement P H Supporting extensive branch network of 880 Y ISO 27001 Certification for IT operation branches S I Micro ATM for Cash Withdrawal in Remote Tab enabled feet-on-street for acquisition and C locations collections A L Extens
Slide 40: Transformation Fueling Business Growth
Transformation Fueling Business Growth T R Redesigning business process of retail asset and Invest on cloud platforms to improve agility liability for higher productivity and scalability A N S F O Automation and digitation of operational API led Integration platform for internal R process and custom
Slide 41: Environment, Social & Governance
Environment, Social & Governance Environment Social Governance Practice is aligned Committed to give • Exclusion List • Service to • Diversified Board with the national due consideration to • Training and Bottom of • Board environmental & awareness pyramid independence E&S laws and social sensitivit
Slide 42: Awards & Accolades
Awards & Accolades Best Customer Experience Strategy by India Customer Excellence (CX) Summit & Awards 2023 MOST PREFERRED Best Customer Experience WORKPLACE 2023-24 (BFSI) by at 18th Annual Summit and Marksmen Daily Awards by ASSOCHAM 1/27/2024 41
Slide 43: Awards & Accolades (Contd.)
Awards & Accolades (Contd.) RANKED 46 UNDER “THE NEXT 500 COMPANIES 2022” BY FORTUNE INDIA RECOGNITION AS ONE OF THE Recognised as one of the ‘PROMISING BRANDS 2022’ BY Most Trusted BFSI Brands ECONOMIC TIMES by Teammarksmen Daily 1/27/2024 42
Slide 44: Utkarsh Welfare Foundation: CSR Initiatives
Utkarsh Welfare Foundation: CSR Initiatives FINANCIAL AWARENESS SKILL & ENTERPRISE VILLAGE DEVELOPMENT OTHER PHILANTHROPIC HEALTH INITIATIVES ACTIVITIES DEVELOPMENT PROGRAM PROGRAM Initiatives Blood Donation Camps, Lives Impacted Lives Impacted Lives Impacted Lives Impacted Support to Old Age 10,50,
Slide 45: Utkarsh Welfare Foundation: CSR Initiatives (Contd.)
Utkarsh Welfare Foundation: CSR Initiatives (Contd.) Financial Awareness Polyclinic Camps E-Clinics Digital Smart Classes Women Entrepreneurship Blood Donation Camps 1/27/2024 44
Slide 46: Disclaimer
Disclaimer Utkarsh Small Finance Bank Limited (also referred to as ‘Bank’). By attending a meeting where this presentation is made, or by reading this presentation material, you agree to be bound by following limitations: The information in this presentation has been prepared for use in presentation
Slide 47: Thank You
THANK YOU. ©) Utkarsh Small Finance Bank
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