Fedbank Financial Services Ltd. · NSE:FEDFINA
Fedbank Financial Services — Q1 FY25 Earnings Presentation
49 slides from Fedbank Financial Services's earnings presentation, Jul 19, 2024
Slide 1: Exchange cover letter: investor meet presentation correction
Secretarial Department July 19, 2024 Ref. FEDFINA/ CS/ 135/ 2024-25 To, To, National Stock Exchange of India Ltd., BSE Limited, Listing Department The Corporate Relationship Dept. Exchange Plaza, C-1, Block G, Rotunda Building, Bandra Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (E), Mumbai – 40
Slide 2: Fedbank Financial Services Investor Presentation Q1 FY25
FEDBANK FINANCIAL SERVICES INVESTOR PRESENTATION EMPOWERING EMERGING INDIA WITH EASY ACCESS TO LOANS Q1 FY25
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (‘Presentation”), which have been prepared by Fedbank Financial Services Limited or Fedfina (the "Company"), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subs
Slide 4: Who we are
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 5: Q1FY25 Result Summary
Q1FY25 Result Summary YoY QoQ ₹ 131.9 bn ₹ 50.0 bn ₹ 702.3 mn ₹ 23,222.5 mn 85.8% AUM Disbursements Profit After Tax Shareholder’s Funds Secured AUM 39.8% 8.2% 68.8% 15.4% 30.3 % 3.8% 64.1 % 2.7 % 159 bps 80 bps 619 18 ₹ 92.8 bn 22.8% 4,344 Branches States and UTs Borrowings1 CRAR Employees 35 -2 3
Slide 6: Executive Summary
Executive Summary In the quarter gone by, we saw a healthy growth across products. Our AUM grew by ₹9.96 bn (8.2% QoQ) in absolute terms to close at ₹131.88 bn. Gold loans AUM grew by 14.9% QoQ to ₹45.62 bn while mortgage loans grew by 5.9% QoQ to ₹65.83 bn. The AUM growth was on the back of a
Slide 7: Who we are
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 8: About Fedfina
About Fedfina We are a majority subsidiary of the Federal Bank Limited, catering to the Product Suite emerging self-employed segment in India. Our parentage provides us with unfettered access to debt and equity. Our vision is to “Empower Emerging India with Easy Access to Loans”. Armed with the
Slide 9: Our Board of Directors
Our Board of Directors Independent Directors Executive Director Non-Executive and/or Nominee Directors Balakrishnan Krishnamurthy Anil Kothuri Shyam Srinivasan Chairman & MD & CEO Non-Executive Director Independent Director Ashutosh Khajuria Gauri Shah Non-Executive Independent Director Nominee Dire
Slide 10: Experienced Management Team
Experienced Management Team Anil Kothuri MD & CEO C.V. Ganesh Siddharth K Shardul Kadam Anila Rajneesh Chief Financial Chief Operating Chief Risk Chief Human Officer Officer Officer Resource Officer Vikas Srivastava K Sureshkumar Ramchandar R Jagadeesh Rao CBO – Mortgage CBO – Mortgage CBO – CBO - G
Slide 11: Our Growth Journey
Our Growth Journey Delivery: FY23 onwards.. • AUM: ₹132 bn (Q1 FY25) Scale-up : FY20 – FY22 • Branches: 619 (Q1 FY25) • Employees: 4,344 (Q1 FY25) • AUM: ₹62 bn (FY22) 132 Initial Public • Branches: 516 (FY22) Offering of ₹10.9 122 Foundation : FY16 – FY19 • Employees: 2,855 (FY22) Bn • AUM: ₹20 bn
Slide 12: Transformational Journey
Transformational Journey FY19 FY24 Operational Parameters No. of Branches 149 4.2x 621 No. of Employees 964 4.5x 4,298 Disbursement (₹ mn) 19,686 6.9x 1,35,787 Disbursement per Branch p.a. (₹ mn) 132 1.7x 219 Disbursement per Employee p.a. (₹ mn) 20 1.6x 32 Financial Parameters (₹ mn) Asset Under Ma
Slide 13: Our Historical Performance
Our Historical Performance Particulars (in ₹Mn) FY19 FY20 FY21 FY22 FY23 FY24 CAGR Operational Information Branches (#) 149 303 359 516 575 621 Disbursements 19,686 43,795 58,937 74,698 1,07,487 1,35,787 AUM 20,193 38,382 48,624 61,872 90,696 1,21,919 43% Employees (#) 964 1,890 2,125 2,855 3,570 4,
Slide 14: Our Vision & Values
Our Vision & Values Vision Empower Emerging India with Easy Access to Loans Values Execution Excellence People Focus Integrity Customer Centric Clear Objectives Empowerment Transparency Customer Goals Resource Optimization Development Opportunities Accountability Clear Communication
Slide 15: Opportunity and our Strengths
Opportunity and our Strengths Opportunity* Core Strengths MSME Credit Addressable Market Pedigree Phygital Risk People Management Model ₹25 Tn ₹92 Tn credit gap Access to low Branches Great Established cost coupled with Place to Work Risk Culture borrowing digital Credit Gap Formal Sector distributi
Slide 16: Our Product Suite
Our Product Suite Secured Against Collateral Mortgage Loans Gold Loan Business Loan AUM (₹Mn) 65,834 45,620 18,690 (% of total) (49.9%) (34.6%) (14.2%) Avg. Ticket Size 22.3 1.4 23.2 (₹ Lakh) Disbursement 7,376 39,706 2,965 (INR Mn) & (Origination Yield) (14.0%) (15.7%) (17.1%) Average LTV 51.8% 71.
Slide 17: Our Mortgage Business
Our Mortgage Business Mortgage Loans Small Ticket LAP and HL Medium Ticket LAP AUM (₹Mn) 33,564 32,270 (% of total) (25.5%) (24.5%) Avg. Ticket Size 12.8 60.4 (₹ Lakh) Disbursement 3,331 4,044 (INR Mn) & (Origination Yield) (16.1%) (12.3%) Average LTV 49.3% 53.9% Underwriting Assessed Income Income
Slide 18: Underwriting and Risk Management
Underwriting and Risk Management Initial Assessment Collateral Assessment Controls KYC Ownership check Team of skilled appraisers Face matching and liveliness Multi-step purity check Makers & checkers concept Customer profiling Deductions Internal deduping and geo Gold Loan Geo f
Slide 19: Underwriting and Risk Management
Underwriting and Risk Management Collateral Assessment Initial Assessment / Underwriting Checks Controls Personal discussion Legal checks : Title, charge creation, Risk containment unit Financial and cash flow analysis CERSAI, vetting of documents, etc.. Fraud check Reference checks Te
Slide 20: Our Customers
Our Customers Category Small Ticket LAP Medium Ticket LAP Business Loan Gold Loan Customer Retail Trading of Snacks and Trading and Installation of Industrial Food and Tea Stall Tailoring Business Savories Electrical Products Expand his product offering and to Refurbish a few existing outlets and Pu
Slide 21: Environmental, Social & Governance
Environmental, Social & Governance Purpose Create substantial and profound impacts by actively promoting and nurturing a sustainable culture within the workplace, fostering a sense of care and support for employees and undertake initiatives to develop sustainable communities and protect the environm
Slide 22: ESG : Framework & Structure
ESG : Framework & Structure Framework Structure ESG and CSR Committee (Board) Key Performance ESG Committee ESG Policy Indicators (Comprising of MD&CEO, COO & CFO, Clearly identified list of ESG Head & CHRO) Board approved policy in place to follow and KPI’s in place, metrics adopt ESG Practices for
Slide 23: Making a Change
Making a Change Komal Pujari, a 22-year-old, lives with her husband and Fedfina Women’s T20 Bilateral Cricket Series young daughter. Wanting to support her family and provide a good education for her child, Komal enrolled in the GDA Nursing Course, encouraged by her husband. She gained skills in com
Slide 24: Digital Landscape
Digital Landscape Fedfina Loans Fedfina Lite Fedfina Collect 9 Lakh+ Downloads 69% Digital Registration 51% Digital Payments Customer Acquisition & Collection Management Servicing Employee Productivity 23
Slide 25: Technology Landscape
Technology Landscape Origination Underwriting Loan Operations Customer Service • Digital Marketing Leads via Social • Cloud based Loan Origination System • Seamless API integration between • Ubiquitous presence in digital universe Media and Company’s Digital with robust Loan Management System LOS an
Slide 26: Our Franchise
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 27: Branch Footprint
Branch Footprint Comprehensive Branch Network… 86 20.1% 619 18 2,000+ Branches States Local channel Branch AUM 44.7% 287 9 and UTs partners Mix Mix 2 1 244 15 37 35.1% 22 20 92 South West North South West North 15 1 2 More than 70 branches 111 Branch Expansion 20-70 branches 49 Less than 20 branches
Slide 28: Disbursements & AUM
Disbursements & AUM ₹ Mn Disbursements YoY: 68.8% QoQ: 15.4% 1,35,787 50,046 43,361 1,07,487 10,340 42,016 33,440 29,656 29,329 14,875 74,698 33,122 58,937 6,683 11,201 19,548 9,256 43,795 7,602 39,706 93,771 28,486 19,686 17,323 74,365 22,973 22,239 51,335 55,150 20,073 8,766 26,472 10,920 FY19 FY2
Slide 29: Installment Loans Disbursements
Installment Loans Disbursements ₹ Mn Small Ticket LAP & HL Medium Ticket LAP Business Loans 14,750 13,591 13,675 11,022 10,908 11,192 7,654 5,968 6,706 5,181 3,701 3,484 3,278 2,835 2,103 2,463 2,873 5 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 19 FY 20 FY 21 FY 22 FY
Slide 30: AUF Mix by Products
AUF Mix by Products 2% 2% 2% 2% 6% 16% 15% 13% 13% 13% 21% 11% 0% 8% 22% 37% 35% 38% 28% 41% 39% 39% 22% 22% 24% 32% 23% 27% 24% 29% 27% 22% 17% 16% 15% FY19 FY20 FY21 FY22 FY23 FY24 Q1FY25 Small Ticket LAP & HL Medium Ticket LAP Gold Loan Business Loan Other 29
Slide 31: AUM Mix by Products
AUM Mix by Products 2% 2% 1% 1% 6% 16% 15% 13% 15% 14% 21% 11% 0% 8% 22% 37% 33% 35% 28% 41% 39% 39% 25% 25% 24% 32% 23% 27% 24% 26% 26% 22% 17% 16% 15% FY19 FY20 FY21 FY22 FY23 FY24 Q1FY25 Small Ticket LAP & HL Medium Ticket LAP Gold Loan Business Loan Other 30
Slide 32: Off-Book Strategy
Off-Book Strategy ₹ Mn AUM AUF Off Book % Product Q1’25 Q4'24 Q1’24 Q1’25 Q4'24 Q1’24 Q1’25 Q4'24 Q1'24 Mortgage 65,834 62,179 47,024 50,463 50,041 40,359 23.3% 19.5% 14.2% Gold Loan 45,620 39,694 31,242 39,323 34,473 31,242 13.8% 13.2% 0.0% Business Loan 18,690 18,255 14,872 13,108 12,859 11,147 29
Slide 33: AUM Mix by Region
AUM Mix by Region Mortgage Loan Gold Loan 1% 5% 0% 3% 6% 9% 9% 14% 13% 17% 17% 17% 19% 20% 20% 34% 28% 27% 29% 28% 29% 32% 30% 29% 38% 43% 45% 100% 77% 65% 67% 66% 62% 63% 56% 52% 55% 51% 45% 40% 38% FY19 FY20 FY21 FY22 FY23 FY24 Q1FY25 FY19 FY20 FY21 FY22 FY23 FY24 Q1FY25 South West North 32 Mortga
Slide 34: Financial Performance
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 35: Financials
Financials ₹ Mn Particulars Q1 FY25 Q4 FY24 Q1 FY24 Operational Information Branches (#) 619 621 584 Disbursements 50,046 43,361 29,656 AUM 1,31,881 1,21,919 94,342 Employees (#) 4,344 4,298 3,732 Financial Information Total Income 4,910 4,277 3,679 Interest Expenses 2,024 1,734 1,636 Net Interest I
Slide 36: Yields, CoB and Spreads
Yields, CoB and Spreads Spreads Yields Cost of Borrowings Spreads Yields Cost of Borrowings 17.3% 17.4% 17.4% 15.6% 15.8% 16.2% 16.1% 16.0% 15.5% 14.5% 8.8% 8.9% 8.7% 9.3% 8.4% 8.3% 8.5% 8.6% 7.4% 7.8% 8.2% 8.0% 8.8% 8.7% 8.1% 7.2% 7.4% 7.3% 7.4% 6.1% FY 20 FY 21 FY 22 FY 23 FY 24 Q1 FY24 Q2 FY24 Q3
Slide 37: Balance Sheet
Balance Sheet ₹ Mn Balance Sheet Q1 FY25 Q4 FY24 Q1 FY24 QoQ YoY FY 24 FY 23 Assets Cash & Cash Equivalents & Other bank 5,388 1,855 2,478 1,855 946 Balance Loans 1,03,615 98,225 82,966 98,225 79,997 Investments 7,344 7,513 5,543 7,513 6,806 Other Financial Assets & Receivables 1,250 1,768 975 1,768
Slide 38: P&L Statement
P&L Statement ₹ Mn Profit & Loss Statement Q1 FY25 Q4 FY24 Q1 FY24 QoQ YoY FY 24 FY 23 Interest Income 4,305 3,854 3,407 14,580 10,754 Interest Expenses 2,024 1,733 1,636 6,797 4,722 Net Interest Income (Core) 2,281 2,120 1,771 7.5% 28.8% 7,783 6,032 Net Gain on Direct Assignment 215 -16 6 337 348 N
Slide 39: RoA Tree
RoA Tree RoA Tree Q1 FY25 Q4 FY24 Q1 FY24 FY 24 FY23 Interest Income / Average total assets 14.9% 14.2% 14.7% 14.4% 13.8% Interest Expenses / Average total assets 7.0% 6.4% 7.1% 6.7% 6.0% Net Interest Income (Core) / Average total assets 7.9% 7.8% 7.7% 7.7% 7.7% Net Gain on DA / Average total Assets
Slide 40: Risk Management
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 41: Quality of the Book
Quality of the Book Over 80% AUM from customers with CIBIL >6501,2 2% 15% 11% 22% 6% 9% 7% 55% 70% 15% 87% >700 650-700 <650 0/-1 >700 650-700 <650 0/-1 >700 <700 0/-1 Medium Ticket LAP Small Ticket LAP & HL Business Loan Granular loan book with high quality collateral 85.8% 80.8% ₹ 2.25 mn AUM secu
Slide 42: Portfolio Quality Indicators (1/2)
Portfolio Quality Indicators (1/2) Gross Stage III % Net Stage III % 2.3% 1.8% 2.0% 1.6% 1.7% 1.3% Q1 FY24 Q4 FY24 Q1 FY25 Q1 FY24 Q4 FY24 Q1 FY25 1+ DPD* % 30+ DPD* % 8.0% 4.6% 4.5% 4.8% 7.3% 7.4% Q1 FY24 Q4 FY24 Q1 FY25 Q1 FY24 Q4 FY24 Q1 FY25 41 * 1+ DPD and 30+ DPD are for non Gold Loan portfoli
Slide 43: Portfolio Quality Indicators (2/2)
Portfolio Quality Indicators (2/2) ₹ Mn Q1FY25 Gross Stage III % Net Stage III % Particulars Gross Net AUF PCR (%) Q1FY25 Q4FY24 Q1FY24 Q1FY25 Q4FY24 Q1FY24 Stage III Stage III Mortgage 50,463 1,497 1,190 20.5% 3.0% 2.2% 2.8% 2.4% 1.8% 2.3% Gold Loan 39,323 300 277 7.7% 0.8% 0.8% 0.9% 0.7% 0.7% 0.8%
Slide 44: Expected Credit Loss
Expected Credit Loss ₹ Mn Particulars Q1 FY25 Q4 FY24 Q1 FY24 FY24 FY23 Gross Stage 1 Assets 97,982 93,159 78,571 93,159 75,690 % of total loan assets 93.6% 93.9% 93.5% 93.9% 93.3% ECL provision 452 403 329 403 317 ECL provision % of assets 0.2% 0.2% 0.4% 0.2% 0.4% Gross Stage 2 Assets 4,583 4,360 3
Slide 45: Treasury & Funding
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 46: Funding Profile
Funding Profile Diversified Funding Profile Daily Average Cost of Borrowing* ALM Position as on 30th June 2024 (Cumulative) ₹ Mn Surplus / (Shortfall) 16% 8.75% 8.78% 28,159 8.64% 8.61% 8.45% < 3 months 12,269 15,891 38,764 19% < 6 months 22,806 15,958 58% 1% 75,252 5% < 1 year 34,971 40,282 Q1 FY24
Slide 47: Net Securitization Volume
Net Securitization Volume Off-book AUM ₹ 4,263 Mn ₹ 9,669 Mn ₹ 22,756 Mn ₹ 27,251 Mn* Incremental Sell Down ₹ 2,576 Mn ₹ 7,744 Mn ₹ 14,609 Mn ₹ 5,769 Mn 5,769 5,272 4,573 3,886 2,839 2,401 1,787 1,925 1,395 676 0 175 ₹ Mn Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY2
Slide 48: Shareholding Pattern
Shareholding Pattern Shareholding Pattern – 30th June 2024 Top Institutional Shareholders : 30th June 2024 Investor Details % Holding Others Federal Bank Ltd 61.3 19.4% True North Fund VI LLP 8.7 Nuvama Private Investment 2.8 FII 0.8% SBI Life Insurance 2.5 MFs 2.5% Insurance Unifi Capital (Blend II
Slide 49: Thank You
THANK YOU investor@fedfina.com www.fedfina.com
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