Creditaccess Grameen Ltd. · NSE:CREDITACC
Creditaccess Grameen — Q3 FY20 Earnings Presentation
42 slides from Creditaccess Grameen's earnings presentation, January 2020
Slide 1: CreditAccess Grameen Limited Q3 & 9M FY20
CreditAccess Grameen Limited Q3 & 9M FY20 Investor Presentation January 2020 www.grameenkoota.org
Slide 2: Disclaimer
Disclaimer By accessing this presentation, you agree to be bound by the following terms and conditions. This presentation (which may reflect some price sensitive information in terms of SEBI regulations and Companies Act, 2013, as amended from time to time) has been prepared by CreditAccess Grameen
Slide 3: Discussion Summary
Discussion Summary Q3 & 9M FY20 Result Update Investment Rationale Business Outlook Annexure www.grameenkoota.org 3
Slide 4: Q3 FY20: Key Performance Highlights
Q3 FY20: Key Performance Highlights Weighted Avg. COB Cost/Income Ratio GLP Disbursements 10.0% 34.8% Rs 8,872 Cr Rs 2,977 Cr (+45.8% YoY) (+68.9% YoY) Marginal COB Opex/GLP Ratio 9.4% 5.1% Capital Adequacy Ratio ROA Total Equity 32.4% 4.6% PAT Rs 2,668 Cr Rs 108 Cr Tier 1 Ratio ROE (+8.2% YoY) D/E
Slide 5: Q3 FY20: Awards & Recognitions
Q3 FY20: Awards & Recognitions CreditAccess Grameen Wins the Prestigious ‘Microfinance Organization of the Year’ Award The award conferred at the 16th Inclusive Finance India Awards 2019 www.grameenkoota.org 5
Slide 6: Q3 & 9M FY20: Profit & Loss Statement
Q3 & 9M FY20: Profit & Loss Statement Profit & Loss Statement (Rs. Cr) Q3 FY20 Q3 FY19 YoY% Q2 FY20 QoQ% 9M FY20 9M FY19 YoY% FY19 Interest income 416.7 319.6 30.4% 381.8 9.1% 1,162.8 905.9 28.4% 1,218.3 - Interest on Loans 411.7 299.7 37.4% 373.7 10.4% 1,137.4 858.3 32.5% 1,156.1 - Income from Secu
Slide 7: Q3 & 9M FY20: Balance Sheet
Q3 & 9M FY20: Balance Sheet Balance Sheet (Rs. Cr) Q3 FY20 Q3 FY19 YoY% Q2 FY20 QoQ% 9M FY20 9M FY19 FY19 Cash & Other Bank Balances 974.2 917.0 6.2% 678.0 43.7% 974.2 917.0 615.5 Loans - Balance sheet assets (Net of Impairment Loss Allowance) 8,101.5 5,292.1 53.1% 7,315.1 10.7% 8,101.5 5,292.1 6,40
Slide 8: Q3 FY20: Asset Quality Update
Q3 FY20: Asset Quality Update Status Update: Impact of floods in certain districts of Northern Status Update: Impact of external interference in two Karnataka and South Maharashtra in Q2 FY20 districts in coastal Karnataka in Q3 FY20 • Currently, 75-80% customers have regularized their accounts • He
Slide 9: Q3 FY20: Well-Diversified Liability Mix
Q3 FY20: Well-Diversified Liability Mix Liability Mix - Institution / Instrument Wise (%) Focus on dynamic liability management Bank - Sub Debt NBFCs - Term Loan • Focus on long-term funding with a mix of domestic & foreign sources 0.4% 1.9% • Target to meet 40%-50% of funding requirement through fo
Slide 10: Q3 FY20: Comfortable Liquidity Position
Q3 FY20: Comfortable Liquidity Position To Meet Obligations And Fulfil Growth Requirements For the month For the Financial year 2019-20 Particulars (Rs Cr) Jan-20 Feb-20 Mar-20 FY 2021 (Jan-20 to Mar-20) Opening Cash & Equivalents* (A) 973.2 1,266.7 1,513.1 973.2 1,784.9 Loan recovery [Principal] (B
Slide 11: Q3 FY20: Positive ALM Continues To Contribute Growth
Q3 FY20: Positive ALM Continues To Contribute Growth Positive ALM Mismatch (in Months) 26.6 25.3 23.1 23.7 21.5 21.2 19.4 19.0 18.6 16.0 16.1 16.0 15.5 15.0 14.7 13.6 14.1 13.1 FY15 FY16 FY17 FY18 FY19 Q2 FY19 Q3 FY19 Q2 FY20 Q3 FY20 Average Maturity of Assets Average Maturity of Liabilities www.gra
Slide 12: Q3 FY20: Ratings & Reaffirmations
Q3 FY20: Ratings & Reaffirmations Q3 FY19 Q3 FY20 Rating Instrument Rating Agency Rating/Grading Rating/Grading Bank facilities ICRA ICRA A+ (Stable) ICRA A+ (Stable) Non-convertible debentures ICRA ICRA A+ (Stable) ICRA A+ (Stable) Subordinated debt ICRA ICRA A+ (Stable) ICRA A+ (Stable) Commercial
Slide 13: Q3 FY20: Robust Quarterly Performance Trend (1/2)
Q3 FY20: Robust Quarterly Performance Trend (1/2) Gross Loan Portfolio (GLP) (Rs Cr) Disbursements (Rs Cr) 45.8% 68.9% 3,272 8,872 2,977 7,619 7,905 7,159 2,310 2,186 6,085 1,762 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Margin Analysis (%) Operating Efficiency
Slide 14: Q3 FY20: Robust Quarterly Performance Trend (2/2)
Q3 FY20: Robust Quarterly Performance Trend (2/2) Asset Quality (%) PAT (Rs Cr) 8.2% 1.19% 0.85% 0.61% 0.55% 0.52% 108 100 96 101 76 0.00% 0.00% 0.00% 0.00% 0.00% # Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 GNPA NNPA Total Equity (Rs Cr) & Debt/Equity Ratio Retu
Slide 15: Q3 FY20: Strong Business Traction With Rural Focus
Q3 FY20: Strong Business Traction With Rural Focus... Gross Loan Portfolio (GLP) (Rs Cr) Borrowers (‘000) 45.8% 22.5% 8,872 2,770 2,564 2,640 7,905 456 2,470 66 7,619 2,261 59 7,159 41 50 373 426 6,085 325 26 200 8,417 2,514 2,581 2,703 7,246 7,479 2,235 2,429 6,834 5,885 Q3 FY19 Q4 FY19 Q1 FY20 Q2
Slide 16: Backed by Consistent Growth In Infrastructure
Q3 FY20: ...Backed by Consistent Growth In Infrastructure Branches Kendras (Group Lending) (‘000) 40.8% 23.5% 887 928 185 164 169 175 659 670 753 150 65 70 60 60 49 693 822 858 610 610 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Group Lending Retail Finance Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Employ
Slide 17: Along With Sustainable Productivity
Q3 FY20: …Along With Sustainable Productivity GLP / Branch (Rs Cr) GLP / Loan Officer (Rs Cr) 5.4 6.2 0.5 0.6 0.7 6.5 0.6 4.1 6.5 0.4 11.2 10.5 1.1 1.3 1.3 1.2 1.2 9.6 9.1 9.8 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Group Lending Retail Finance Group Lending R
Slide 18: Product Range To Meet Diverse Customer Needs
Q3 FY20: …Product Range To Meet Diverse Customer Needs GLP - Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Product Mix (Rs Cr) % of Total (Rs Cr) % of Total (Rs Cr) % of Total (Rs Cr) % of Total (Rs Cr) % of Total IGL 4,725 78% 6,088 85% 6,454 85% 6,660 84% 7,541 85% Family Welfare 261 4% 93 1% 264 3% 317
Slide 19: Q3 FY20: District Wise Exposure Trend
Q3 FY20: District Wise Exposure Trend Portfolio Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Exposure of Districts No. of % of Total No. of % of Total No. of % of Total No. of % of Total No. of % of Total (% of Portfolio) Districts Districts Districts Districts Districts Districts Districts Districts Dis
Slide 20: Discussion Summary
Discussion Summary Q3 & 9M FY20 Result Update Investment Rationale Business Outlook Annexure www.grameenkoota.org 20
Slide 21: Investment Rationale
Investment Rationale 2 3 Contiguous District Customer Centric Based Expansion Business Model With Rural Focus 1 4 Strong Parentage Classical Joint of CreditAccess Key Differentiators Lending (JLG) Asia N.V. Model 6 5 Consistent Growth Unique Human Along With Strong Capital & Internal Asset Quality A
Slide 22: Strong Parentage of CreditAccess Asia N.V.
Strong Parentage of CreditAccess Asia N.V. Committed to Micro Finance Business Strong Financial Support • CreditAccess Asia N.V. (CAA) specialises in Micro and Small • Invested through multiple rounds of capital funding along with Enterprises financing secondary purchase during 2009 to 2017 • Operat
Slide 23: Customer Centric Business Model (1/2)
Customer Centric Business Model (1/2) Partnering in growth with diverse product 52% of GLP Lending ratehas of 18%-22%, interest rate among of suite catering to entire customer life cycle the lowest in the industry 18%-19% Customer flexibility - Even in a group, borrowers members can canhave havediff
Slide 24: Customer Centric Business Model (2/2)
Customer Centric Business Model (2/2) Loan Customer Centric Ticket Size Tenure % of Cashless shift based Purpose Yield Type Products (Rs.) (months) GLP on customer’s Business Investments and 21% 43.0% preference Income Generation Group Income Enhancement 5,000 - 80,000 12-24 Loan(IGL) 19% 42.0% • Sm
Slide 25: Calibrated, Contiguous District Based Expansion Strategy
Calibrated, Contiguous District Based Expansion Strategy Focusing on Deep Rural Penetration Presence 13 States/ 1 UT Focus on achieving deep penetration within a particular district 230 Districts within three years of commencement of operations 928 Branches Rajasthan Uttar Pradesh 20 15 Gujarat Biha
Slide 26: Classical JLG Lending Model
Classical JLG Lending Model Group Formation Data Entry & CB Check Group Confirmation Kendra Meetings • Group: 5-10 members • Data entry into CBS at RPCs • CGT by LO for 5 days • Weekly / Fortnightly meetings • Kendra: 2-6 groups • Credit Bureau check • Re-interviews by BM followed by • Duration: 30-
Slide 27: Unique Human Capital, Internal Audit & Controls
Unique Human Capital, Internal Audit & Controls Unique Human Capital Internal Audit & Controls Well-established Operational Structure Sound Understanding of Rural Market • Internal audit team - 155 • ~90% of employees are hired fresh Business Heads from rural communities • Internal audit frequency –
Slide 28: Strong Performance Track Record (1/3)
Strong Performance Track Record (1/3) Gross Loan Portfolio (GLP) (Rs Cr) Disbursements (Rs Cr) 49.1% 44.3% 7,159 8,221 4,975 325 6,082 2,539 3,075 51 1,447 6,834 3,349 3,403 0 1 4,923 1,894 0 2,539 3,075 1,447 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Group Lending Retail Finance Margin Anal
Slide 29: Strong Performance Track Record (2/3)
Strong Performance Track Record (2/3) Asset Quality (%) PAT (Rs Cr) 322 0.82% 0.61% 212 0.04% 0.08% 0.08% 0.00% 0.00% 0.00% 0.00% 0.00% 84 75 49 FY15* FY16* FY17* FY18 FY19 # FY15* FY16* FY17* FY18 FY19 GNPA NNPA Total Equity (Rs Cr) & Debt/Equity Ratio Return Ratios & Capital Adequacy (%) 4.8 3.4 3
Slide 30: Strong Performance Track Record (3/3)
Strong Performance Track Record (3/3) Branches Borrowers (‘000) & Retention Rate (%) 86% 86% 86% 87% 84% 670 516 60 2,470 393 1,851 41 298 30 1,450 238 5 1,196 6 0 610 845 0 0 486 0 2,429 298 388 0 1,450 1,845 238 845 1,196 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Group Lending Retail Finan
Slide 31: Discussion Summary
Discussion Summary Q3 & 9M FY20 Result Update Investment Rationale Business Outlook Annexure www.grameenkoota.org 31
Slide 32: NBFC-MFIs Best Placed To Address Rural Credit Needs
NBFC-MFIs Best Placed To Address Rural Credit Needs 75% Unbanked Households in Rural Areas1- Large Untapped Opportunity • Massive Govt. thrust to boost financial Low penetration of banking credit inclusion - NBFC-MFIs to play a key role Total in rural areas in furthering this Households (247 Mn) 90%
Slide 33: FY20 Guidance
FY20 Guidance PAT (Rs Cr) 425 – 450 www.grameenkoota.org 33
Slide 34: Discussion Summary
Discussion Summary Q3 & 9M FY20 Result Update Investment Rationale Business Outlook Annexure www.grameenkoota.org 34
Slide 35: Quarterly Disbursement Trend
Quarterly Disbursement Trend FY16 – Rs 3,349 Cr FY17 – Rs 3,403 Cr FY18 – Rs 6,082 Cr FY 19 - Rs 8,221 Cr 3,272 1,911 1,762 1,680 1,616 1,571 1,368 1,296 Impact of 1,195 Demonetisation 1,011 967 832 709 716 611 538 Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY
Slide 36: Provisioning Policy
Provisioning Policy CAGL Policy (Revised w.e.f. RBI Norms IND-AS (Earlier) Q4 FY19) Standard 0-90 days Stage I 0-30 days 0-30 days 0-15 days Assets Asset Sub-Standard 91-180 days Stage II 31-90 days 31-90 days 16-60 days Classification Assets Loss >180 days Stage III >90 days >90 days >60 days Asset
Slide 37: Shareholding Structure
Shareholding Structure Shareholding Pattern (%) – December 2019 Top 10 Investors – December 2019 Bodies Eastspring Investments India Corporate & Others, HDFC Life Insurance Individuals, 2.49 3.45 ICICI Prudential Banking & Financial Services Fund MF & AIF, 7.77 ICICI Prudential Life Insurance Compan
Slide 38: Information Technology
Information Technology Key Technology Partners Key Technology Initiatives (Data Centre & Disaster (Core Banking Solution) Recovery SMS engine Paperless Infrastructure) Field transactions with integration process reduced TAT automation (Email and Collaboration) (Mobility solution) Event based Custome
Slide 39: Community Focus
Community Focus Awarded Winner in NBFC Category for FY 2017-18 by FE • Company aims to meet its responsibility towards society India’s Best Banks through: Comprehensive Awarded Micro Finance with ‘Water.org and Grading Sa-dhan –Awards’ for Water • Diligently follow responsible financing practices &
Slide 40: Effective Use of CSR Funds
Effective Use of CSR Funds Conducts various activities spread across states of Karnataka, Maharashtra, Tamil Nadu and Madhya Pradesh which complement its regular microfinance operations by contributing to improving living conditions of the customer/s. Events Conducted Beneficiaries WASH (Water Sanit
Slide 41: Go Green Activities
Go Green Activities 44,042 plant saplings were distributed in FY 19-20 (till Dec 31, 2019) to our customers and public for spreading awareness on afforestation and reforestation Karnataka Tamil Nadu Maharashtra Madhya Pradesh 27,720* plant sapling 6,305 plant sapling 5,828 plant sapling 4,189 plant
Slide 42: Thank You
Thank You For any investor related queries , please mail to investorrelations@grameenkoota.org www.grameenkoota.org 42