Creditaccess Grameen Ltd. · NSE:CREDITACC
Creditaccess Grameen — Q1 FY24 Earnings Presentation
37 slides from Creditaccess Grameen's earnings presentation, July 2023
Slide 1: CreditAccess Grameen Limited Q1 FY24 Investor Presentation
CreditAccess Grameen Limited Q1 FY24 Investor Presentation July 2023 www.creditaccessgrameen.in
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 Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 3
Slide 4: Key Business Highlights
Q1 FY24: Key Business Highlights Robust Business Momentum, Strong Operating Profitability, And Best In Class Asset Quality Q1 FY24 YoY% QoQ% GLP (INR Cr) 21,814 +39.7% +3.7% • Strong customer additions of 3.28 Lakh, 47% coming Borrowers (Lakh) 44.23 +19.9% +3.7% from outside of top 3 states Disburse
Slide 5: Customer Growth Led By Robust Additions & High Retention
Q1 FY24: Customer Growth Led By Robust Additions & High Retention Robust Borrower Additions Borrower Vintage Borrowers (‘000) Q1 FY24 52% 32% 16% Q4 FY23 47% 36% 17% 266 1,467 467 Q3 FY23 48% 34% 18% 4,423 Q2 FY23 46% 35% 19% 3,689 Q1 FY23 47% 35% 19% Q1 FY23 Addition Write-off Attrition Q1 FY24 < 3
Slide 6: Best-In-Class Asset Quality
Q1 FY24: Best-In-Class Asset Quality PAR Trend Credit Cost (INR Cr) Q1 FY24 1.5% Opening ECL - (A) 347.8 1.2% 1.2% Additions (B) 1.1% 1.0% 1.0% - Provisions as per ECL 43.0 0.8% 0.7% Reversals (on account of write-off) (C) 67.1 Q4 FY23 Q1 FY24 Closing ECL (D = A+B-C) 323.7 PAR 0 PAR 30 PAR 60 PAR 90
Slide 7: Comfortably Placed to Maintain Healthy NIMs
Q1 FY24: Comfortably Placed to Maintain Healthy NIMs Key Metrics Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Avg. New Disbursement Interest Rate % 20.3% 20.8% 21.5% 21.9% 21.9% Portfolio Yield % 18.4% 19.1% 19.6% 19.7% 20.7% Weighted Avg. Cost of Borrowing % 9.1% 9.2% 9.6% 9.5% 9.6% Marginal Cost of Bor
Slide 8: Strong Traction In Foreign Funding
Q1 FY24: Strong Traction In Foreign Funding Maiden Syndicated Social Loan Facility Of Up To USD 200 Million Foreign Funding Update – Q1 FY24 • The facility qualifies as ECB under the automatic route of the RBI • This is the first social ECB loan in MFI industry and fourth from India • USD 142 Mn (IN
Slide 9: Promoter Stake Sale Further Broadening The Shareholder Base
Q1 FY24: Promoter Stake Sale Further Broadening The Shareholder Base Shareholding Pattern – March 2023 Augmentation of CA Grameen’s Shareholding Base • In line with Company’s strategy to expand the free float and Others, 4.37 shareholding base, 5.7% (90,00,000 shares) of Promoter holding was sold to
Slide 10: Performance Vs. Annual Guidance
Q1 FY24: Performance Vs. Annual Guidance FY24 Q1 FY24 Key Indicators Guidance Performance GLP Growth % 24.0% - 25.0% 39.7% NIM % 12.0% - 12.2% 13.0% Cost-to-Income Ratio % 35.0% - 36.0% 30.8% Credit Cost (Provisions + Write-offs) – % of Avg. On-Book 1.6% - 1.8% 0.4% Loan Portfolio (non annualized) R
Slide 11: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 11
Slide 12: Key Performance Highlights
Q1 FY24: Key Performance Highlights NIM Cost/Income Ratio 13.0% 30.8% PPOP GLP: INR 21,814 Cr INR 544 Cr (+39.7% YoY) Weighted Avg. COB Opex/GLP Ratio (+87.7% YoY) 9.6% 4.5% ROA Capital Adequacy Ratio Total Equity 5.8% 24.4% INR 5,449 Cr PAT: INR 348 Cr (+151.5% YoY) ROE Tier 1 Ratio D/E Ratio 26.4%
Slide 13: P&L Statement
Q1 FY24: P&L Statement Profit & Loss Statement (INR Cr) Q1 FY24 Q1 FY23 YoY% Q4 FY23 QoQ% FY23 Interest Income 1,105.2 736.2 50.1% 964.8 14.6% 3,327.1 - Interest on Loans 1 1,080.8 727.6 48.5% 950.1 13.8% 3,277.4 - Income from Securitisation 5.4 0.0 - 0.1 - 0.1 - Interest on Deposits with Banks and
Slide 14: Balance Sheet
Q1 FY24: Balance Sheet Balance Sheet (INR Cr) Q1 FY24 Q1 FY23 YoY% Q4 FY23 QoQ% FY23 Cash & Other Bank Balances 1,303.3 1,369.2 -4.8% 1,436.4 -9.3% 1,436.4 Investments 731.2 173.1 322.3% 454.5 60.9% 454.5 Loans - (Net of Impairment Loss Allowance) 19,735.0 14,137.6 39.6% 18,939.8 4.2% 18,939.8 Loans
Slide 15: Continued Business Traction with Rural Focus
Q1 FY24: Continued Business Traction with Rural Focus Gross Loan Portfolio (INR Cr) Borrowers (‘000) 39.7% 19.9% 21,814 21,031 4,423 4,264 17,786 3,939 16,539 3,689 3,798 15,615 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 www.creditaccessgrameen.in 15
Slide 16: Consistent Growth in Infrastructure
Q1 FY24: Consistent Growth in Infrastructure Branch Additions Branches States Q1 FY24 Bihar 7 8.6% Chhattisgarh - Gujarat - 1786 1,826 Jharkhand - 1,681 1,684 1,727 Madhya Pradesh - Karnataka 8 Kerala - Maharashtra 5 Odisha - Puducherry - Rajasthan 7 Tamil Nadu 5 Uttar Pradesh 5 Q1 FY23 Q2 FY23 Q3 F
Slide 17: Robust Quarterly Performance Trend (1/2)
Q1 FY24: Robust Quarterly Performance Trend (1/2) Disbursements (INR Cr) Total Income (INR Cr) 122.3% 1,171 7,171 1,066 910 761 814 4,847 4,771 4,375 2,146 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Margin Analysis (%) Operating Efficiency (%) 20.7% 5.1% 5.0% 18.
Slide 18: Robust Quarterly Performance Trend (2/2)
Q1 FY24: Robust Quarterly Performance Trend (2/2) NII, PPOP, PAT (INR Cr) Asset Quality (%) 763 690 3.11% 516 566 2.46% 462 3.01% 2.04% 503 544 1.78% 2.17% 1.59% 334 379 2.33% 290 1.71% 348 1.72% 1.21% 297 1.34% 175 216 0.89% 139 0.96% 0.70% Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q2 FY23 Q3
Slide 19: Stable Operational Efficiency
Q1 FY24: Stable Operational Efficiency GLP / Branch (INR Cr) GLP / Loan Officer (INR Cr) 11.8 11.9 1.8 1.8 10.3 1.6 9.8 1.5 1.5 9.3 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Borrowers / Branch Borrowers / Loan Officer 2,422 351 371 367 2,256 2,281 2,388 349 344
Slide 20: Product Range To Meet Diverse Customer Needs
Q1 FY24: Product Range To Meet Diverse Customer Needs GLP - Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Product Mix (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total IGL 14,937 96% 15,801 96% 17,054 96% 20,090 96% 20,670 95% Family Welfare 121 1% 185 1%
Slide 21: Well-Diversified Presence Across India
Q1 FY24: Well-Diversified Presence Across India Our Presence as on Jun-23 Branch Network Q1 FY24 % Share Q1 FY23 % Share 14 States & 1 UT Karnataka 319 17.5% 308 18.3% 353 Districts Maharashtra 306 16.8% 294 17.5% 1,826 Branches Uttar Pradesh Tamil Nadu 383 21.0% 378 22.5% 80 Madhya Pradesh 148 8.1%
Slide 22: Progressing Well on Liability Strategy
Q1 FY24: Progressing Well on Liability Strategy Liability Mix - Institution / Instrument Wise (%) Focus on dynamic liability management Banks - NCD NBFCs - TL • Focus on long-term funding with strong diversification between domestic 0.2% 2.9% FIs - TL & foreign sources 9.2% • Target to meet funding
Slide 23: Stable Liquidity/ALM Position/ Credit Ratings
Q1 FY24: Stable Liquidity/ALM Position/ Credit Ratings Static Liquidity / ALM Position For the Month For the Financial Year Debt Diversification Q1 FY24 Particulars (INR Cr) Jul-23 Aug-23 Sep-23 Oct-23 to Mar-24 FY25 Total Drawdowns 2,958 Opening Cash & Equivalents (A) 1,921.9 2,113.2 2,764.9 3,109.
Slide 24: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 24
Slide 25: Committed to Basics Through Classical JLG Lending Model
Committed to Basics Through Classical JLG Lending Model Microfinance loans are unsecured. JLG mechanism acts as security/ loan collateral Fully aligned with new harmonized guidelines in terms JLG Benefits: of - ✓ Strong group bonding ✓ Formulation of Board approved policies ✓ Mutual support – both f
Slide 26: Focus on Customer Centricity, Loyalty & Retention
Focus on Customer Centricity, Loyalty & Retention “One of the Lowest Cost Organised Financer” - One Stop Shop providing Support to Various Lifecycle Needs of the Customer One of the lowest lending rates in MFI industry Loan Customer Centric Ticket Size Tenure Purpose Type Products (INR) (months) Div
Slide 27: Calibrated Expansion Through Contiguous District-Based Approach
Calibrated Expansion Through Contiguous District-Based Approach Systematic geography selection based on the availability of CA Grameen’s contiguous infrastructure, competition, historical performance trend, social/ district-based expansion economic/ political/ climate risk, growth potential Ensures
Slide 28: Unique Human Capital, Internal Audit & Risk Management
Unique Human Capital, Internal Audit & Risk Management Well-Established Operational Structure Multi-Pronged Approach For Risk Management Sound Understanding of Business Heads Rural Market Internal Audit (IA): • ~90% of employees are hired fresh • IA frequency – 6 times in a year at branches, 4 times
Slide 29: Strong Internal Control Structure: Three Lines Of Defence
Strong Internal Control Structure: Three Lines Of Defence 3rd line of defence: Internal Audit team 2nd line of defence: Risk team 1st line of defence: Field & Quality Control teams Zonal Manager / State Head Zonal Manager handles 100 – 120 branches Regional / Divisional Regional Manager handles 40-5
Slide 30: Continuous Technology Enhancement to Drive Operational Efficiency
Continuous Technology Enhancement to Drive Operational Efficiency Ensures Quick And Seamless Delivery of Need Based Financial Products and Services backed by Robust Technology Infrastructure Future Upgrades & Investments High touch-high tech delivery model: • Upgradation of CBS to the latest version
Slide 31: Integrating Risk Management in Every Operating Process
Integrating Risk Management in Every Operating Process Microfinance is a Collection Business, hence Risk Management is Integral to Core Strategy and Operating Processes Contiguous Customer Employee Target Customer Customer Employee District-based Lending Model Engagement Incentive Segment Due-Dilige
Slide 32: Cross Cycle Business Resiliency
Cross Cycle Business Resiliency Cross-Cycle ROA (%) Cross-Cycle ROE (%) Strong Cross Cycle FY19 FY21 FY22 FY17-FY18 Performance Despite Floods, Covid Covid Demonetisation Several Crisis NBFC crisis Wave 1 Wave 2 5.1% 22.2% 5.0% 4.2% 18.0% 16.3% 3.6% Avg: 13.5% Avg: 3.3% 12.3% 12.9% 2.3% 2.2% 9.0% 0.
Slide 33: Strong Parentage & Shareholder Base
Strong Parentage & Shareholder Base Shareholding Pattern – June 2023 Others, 11.76 Committed to Micro Finance Business MF, AIF, Insurance, Promoter 11.91 • CreditAccess India B.V. (CAI) specialises in Micro & Small Enterprises Group, 66.77 financing • Widely held shareholding base: 247 shareholders
Slide 34: Past Five Years Performance Track Record (1/2)
Past Five Years Performance Track Record (1/2) Gross Loan Portfolio (GLP) (INR Cr) Disbursements Active Borrowers (‘000) CAGR CAGR CAGR 31% 23% 15% 21,031 18,539 4,264 4,055 3,912 3,824 16,599 15,466 13,587 11,996 10,389 11,011 2,470 8,221 7,159 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19
Slide 35: Past Five Years Performance Track Record (2/2)
Past Five Years Performance Track Record (2/2) Note: Refer Annexure for definition of key ratios Margin Analysis (%) Operating Efficiency (%) Asset Quality (%) 20.0% 5.01% 19.4% 18.8% 18.3% 18.9% 5.0% 4.9% 4.8% 4.9% 4.7% 3.44% 2.78% 12.7% 12.2% 1.78% 10.7% 10.9% 11.6% 39.0% 1.14% 4.43% 33.9% 36.7% 3
Slide 36: Key Ratios: Definitions
Key Ratios: Definitions 1. Portfolio Yield = (Interest on loans – processing fees + Income from securitisation)/ Avg. quarterly on-book loans 2. Weighted Avg. COB = (Borrowing cost – finance lease charges) / Daily average borrowings (excl. Financial Liability towards Portfolio Securitized) 3. Margin
Slide 37: Thank You!
For Further Queries: Thank You! Nilesh Dalvi SVP & Head Investor Relations Contact No – 9819289131 Email Id – nilesh.dalvi@cagrameen.in Sahib Sharma DGM – Investor Relations Contact No – 7066559383 Email Id – sahib.sharma@cagrameen.in 37 www.creditaccessgrameen.in www.creditaccessgrameen.in