Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q2 FY2018 Earnings Presentation
40 slides from Au Small Finance Bank's earnings presentation, Oct 29, 2017
Slide 1: Q2FY18 Investor Presentation
Q2FY18 Investor Presentation 29th October 2017 Retail Focused I Differentiated I Well Capitalized I Fast Growing I Customer Centric
Slide 2: Table of Contents
Table of Q2/ 1H FY18 Performance Summary Contents Retail Bank, Wholesale Bank Snapshot Liabilities Snapshot About AU Small Finance Bank Financials & Shareholding 2
Slide 3: Q2 / 1H FY18 Performance Summary
▪ Robust AUM growth of ~30% y-o-y; Total Loans Rs. 12,000+ crore with ~85% Retail Loans of Rs. 10,000+ crore ▪ Led by ~45% surge in Disbursements y-o-y, Disbursals of more than Rs. 2,500 crore in the quarter (up 67% q-o-q) Q2 / 1H FY18 ▪ Granular Deposits Book at ~Rs. 2,000 crore with CASA ratio of
Slide 4: Q2 / 1H FY18 Key Financials
Select P&L Highlights In INR Crore Total Income Net Interest Income PPOP Profit After Tax1 Q2 H1 Q2 H1 Q2 H1 Q2 H1 Q2 / 1H 9% 1% 20% 10% FY18 41% 37% 12% 11% Key Financials Select Business Highlights In INR Crore & Y-o-Y Comparison Gross AUM Disbursements2 Deposits Net Worth 30% 29% NA 24% Assets Qu
Slide 5: Q2 / 1H FY18 Assets and Liabilities Business Updates
20 years experience in Retail Assets + Bank Platform = Wider Customer Base, New Products, Cross Sell Opportunities ▪ Disbursed ~37000 new loans in Q2FY18; ▪ All segments of Retail Bank1 witnessed strong growth in Q2; Wheels, SBL- MSME, Q2 / 1H SBL-SME y-o-y Disbursements grew 23%, 43% and 8% respect
Slide 6: Q2 / 1H FY18 Distribution & Treasury Updates
Strengthening & Leveraging AU Bank Distribution Network ▪ Received Corporate Agency Approval from IRDAI for distribution of 3rd party Insurance Products ▪ Tied up with Aditya Birla Health Insurance Co Ltd; Agreement Signing stage with Q2 / 1H another leading Indian insurance carrier for general insu
Slide 7: Steady ROA & ROE in Q2FY18
Steady ROA & ROE in Q2FY18 Despite a sharp but expected increase in Cost to Income Ratio in Q2FY18, both ROA and ROE have stabilized at Q1FY18 levels because of improved NII & other operating income RoA1 (%) RoE2 (%) 3.6% 3.1% 20.7% 21.3% 1.7% 1.8% 1.8% 12.3% 13.1% 12.7% Q2 FY17 1H FY17 Q1FY18 Q2 FY
Slide 8: Key Performance Matrix
Key Performance Matrix Active Loan Accounts Gross AUM1 INR Crore Disbursements INR Crore 3,03,756 2,520 2,85,558 10,759 12,134 9,368 1,738 2,53,346 1,513 Sept-16 Jun-17 Sept-17 Sept-16 Jun-17 Sept-17 Q2 FY17 Q1FY18 Q2 FY18 As NBFC As a Bank As NBFC As a Bank As NBFC As a Bank Asset Centers Branches2
Slide 9: Consistent Asset Quality
Consistent Asset Quality Gross NPA1 Net NPA INR Crore INR Crore 179 155 266 217 112 154 Sept-16 Jun-17 Sept-17 Sept-16 Jun-17 Sept-17 As NBFC As a Bank As NBFC As a Bank Gross NPA1 Net NPA Provision Coverage Ratio 3.1% 32.8% 3.0% 28.6% 27.3% 2.4% 2.1% 2.1% 1.8% Sept-16 Jun-17 Sept-17 Sept-16 Jun-17
Slide 10: Way Forward
Way Forward Retail, Wholesale Bank – Diversify Products Mix • Leverage existing customer base of ~500,000 customers and continue to be a asset led bank • Launch / scale up digital distribution model for Two Wheeler Loans and CD Loans • Re-enter Housing Finance • Cross-sell liabilities products, insu
Slide 11: Retail Bank, Wholesale Bank Snapshot
Q2/ 1H FY18 Performance Summary Retail Bank, Wholesale Bank Snapshot Liabilities Snapshot About AU Small Finance Bank Q2FY18 Financials & Shareholding 11
Slide 12: Retail & Wholesale Bank Snapshot – I
Retail & Wholesale Bank Snapshot – I Retail Bank Assets comprise ~85% of Gross AUM In Q2FY18 AUM surged by 30 % y-o-y; Retail Bank AUM crossed Rs. 10,000 crore mark (up 29% y-o-y) of Rs. 12,134 Crore INR Crore AUM Growth Q-o-Q Y-o-Y 12,134 15% 10,759 9,368 Total 12.8% 29.5% 10,360 8,020 9,576 Retail
Slide 13: Retail & Wholesale Bank Snapshot - II
Retail & Wholesale Bank Snapshot - II - Disbursements growth led by growth in all segments of Retail Bank and Wholesale Bank - Overall Disbursements crossed Rs. 2500 crore mark INR Crore Disbursement Q-o-Q Y-o-Y 2,520 Growth Total 1,738 Total 66.5% 45.0% 1,513 1,824 Retail Bank 51.9% 29.0% 1,414 1,2
Slide 14: Retail Bank Snapshot – I
Retail Bank Snapshot – I Retail Assets AUM Mix by Products – Wheels, In Q2FY18 Retail Bank AUM by ~29% Y-o-Y; Pilot Tested Consumer Durable Loans in Raj, Hah & Haryana MSME, SME and GL+CD+Agri SME INR Crore 10,360 AUM Growth Q-o-Q Y-o-Y 9,576 8,020 Overall Retail Bank 8.2% 29.2% 9% 0% 5,318 5,786 Wh
Slide 15: Retail Bank Snapshot - II
Retail Bank Snapshot - II Retail Assets Disbursements growth led by growth in all segments Overall Retail Disbursements INR Crore 1824, Products Q-o-Q Y-o-Y 1,414 1,201 Overall Retail Bank 51.9% 29.0% 1,056 860 Wheels 55.7% 22.8% 678 Gross AUM 68.1% 46.4% 659 SBL MSME 55.5% 43.4% 459 424 95 0 98 1 1
Slide 16: Wheels Book Split by Ownership & Product Types
Wheels Book Split by Ownership & Product Types Wheels AUM break up – New vs Old Wheels AUM break up – Vehicle types 0% 4% 4% 3%1% 3% 26% 6% 29% 3% 5% 67% 21% 28% New Used / Re-finance Trade Advance Multi-Utility Vehicle Cars Small Commercial Vehcile Light Commercial Vehcile Three Wheeler Sports Util
Slide 17: Wholesale Bank Snapshot
Wholesale Bank Snapshot Wholesale Bank Assets AUM Break-up – Exposure In Q2FY18 Wholesale Bank AUM by ~32% Y-o-Y; NBFC clocked growth over 60% Y-o-Y to NBFC ~60% INR Crore 1,774 AUM Growth Q-o-Q Y-o-Y 3% 1,348 1,183 Overall Wholesale Bank 50.0% 31.6% 1,021 638 NBFC 67.1% 59.^9% 40% 611 Gross AUM 68.
Slide 18: Liabilities Snapshot
Q2FY18 Performance Summary Retail Bank, Wholesale Bank Snapshot Liabilities Snapshot About AU Small Finance Bank Q2FY18 Financials & Shareholding 18
Slide 19: Well entrenched distribution franchise
Well entrenched distribution franchise 301 Branches & 9,974 303,756 Active Loan 156,091 CASA 11 States 287 ATMs 33% CASA Ratio 113 Asset Centers employees Accounts Accounts Deep Penetration into Core States and Expansion into Branch Distribution Growth Geographies Metropolitan Urban Semi-urban Rural
Slide 20: Liabilities, Branch Banking, Cross Sell - Snapshot
Liabilities, Branch Banking, Cross Sell - Snapshot Rapidly building granular retail deposit franchise (value), CASA Ratio of 33% Growth in Q2 CASA RATIO (%) CASA RATIO (%) 1,978 1,334 61% 33% 815 423 506 316 143% 77 139 Jun 30, 2017 Sept 30, 2017 Rapidly building granular retail deposit franchise -
Slide 21: Enhancing Customer experience
Enhancing Customer experience 70% Aadhaar linked TAB-based “Paperless” account opening Savings A/c opened via TAB • Completely automated induvial Saving’s account opening – 100% Straight 54% 13209 15% Through Process • Clocking average of ~2,500 accounts opened per day 12,835 22,695 30,821 • All sal
Slide 22: Cross Sell – Key Tie Ups
Cross Sell – Key Tie Ups Received Corporate Agency Approval from IRDAI for distributing 3rd party Insurance Products • Tied up with Aditya Birla Health Insurance Co Ltd; • Agreement Signing stage with another leading Indian insurance carrier for general insurance Received AMFI Registration Number fr
Slide 23: Liabilities Product Portfolio
Liabilities – bouquet of product offerings Key Features Savings Insurance Accounts (3rd Party) ✓ Few Product Variants - Easy to remember & recollect Current ✓ Go-to-Market approach ATMs Liabilities Product Portfolio Accounts ✓ True Anywhere Banking – No home branch concept Fixed ✓ Extended Banking H
Slide 24: Diversified Liabilities Portfolio
Diversified Liabilities Portfolio Increasing proportion of Deposits further diversifying the funding profile All figures in INR Cr 4,742 7,071 8,208 9,404 0.0% 0.0% 7.5% 4.7% 9.9% 4.0% 21.0% 17.8% 22.5% 13.2% 3.5% 6.8% 8.0% 11.0% Deposits 13.5% 6.1% 20.7% Tier II Capital 15.7% Loans from Banks & NBF
Slide 25: Declining Cost of Funds & Treasury Updates
Declining Cost of Funds & Treasury Updates O/s Amount as on Sept Improving cost of funds Cost of Funds raised in H1FY18 ROI % 30,2017 (INR Crore) 10.0% 9.8% Before Bank conversion (from Apr 1, 9.6% Avg. Cost of Funds 793 8.15% 9.5% 2017 to Apr 19, 2017) 9.0% 9.0% Post bank conversion (from Apr 19, 8
Slide 26: About AU Small Finance Bank
Q2FY18 Summary Performance Retail Bank, Wholesale Bank Snapshot Liabilities Snapshot, , Digital, Technology Snapshot About AU Small Finance Bank Financials & Shareholding Pattern 26
Slide 27: Retail Focused I Differentiated I Well Capitalized I Fast Growing I Customer Centric
Retail Focused I Differentiated I Well Capitalized I Fast Growing I Customer Centric
Slide 28: AU Bank - Retail Focused, Fast Growing, Well Capitalized Bank (1/2)
AU Bank - Retail Focused, Fast Growing, Well Capitalized, Differentiated, Customer Centric Bank (1/2) • Mr. Sanjay Agarwal, All India Rank Holder CA - Hands on Promoter, MD & CEO of AU Bank, holding ~33% equity stake; ably supported by seasoned team • Prominent, retail focused Bank primarily serving
Slide 29: AU Bank - Retail Focused, Fast Growing, Well Capitalized Bank (2/2)
AU Bank - Retail Focused, Fast Growing, Well Capitalized, Differentiated Customer Centric Bank (2/2) • Experts in Smaller Ticket Loans and Priority Sector Lending – Our Core Strength • 20 years of track record of doing smaller loans; Avg ticket size of around Rs. 5 lacs in Retail loans • Customer Ce
Slide 30: Key Milestones | Our Journey
Key Milestones | Our Journey • PE Investment by • Divestment in • Obtained ChrysCap & Au Housing FY investments from FY Kedaara Finance Ltd & 96–07 IBEF and INEF I 11–12 FY16 other subsidiaries H1FY18 (Motilal Oswal) & • Two notch long / associates IFC & Infusion by term rating Promoters upgrade by
Slide 31: Vision & Mission
Vision & Mission AU Vision AU Mission • To be the world’s most trusted retail bank and To build one of India’s largest retail franchise by 2022 coveted employer that is admired for: • That is admired as the epitome of financial • Making every customer feel supreme while being inclusion and economic
Slide 32: Financials & Shareholding Pattern
Q2 Summary Financial Performance Table of Retail Bank, Wholesale Bank Snapshot Contents Liabilities Snapshot, , Digital, Technology Snapshot About AU Small Finance Bank Financials & Shareholding Pattern 32
Slide 33: Profit & Loss Statement
Profit & Loss Statement (All Figures in INR Crore) Q2FY18 Q2FY17 Y-o-Y H1FY18 H1FY17 Y-o-Y Q1 FY18 FY17 Unaudited Unaudited Unaudited Audited Unaudited Audited Income Interest Earned 410 324 27% 771 616 25% 361 1,287 Interest Expended 191 128 48% 368 253 46% 178 500 Net Interest Income 220 195 12% 4
Slide 34: Balance Sheet
Balance Sheet (All Figures in INR Crore) Sept 30, 2017 Sept 30, 2016 Y-o-Y Jun 30, 2017 Mar 31, 2017 Unaudited Audited Unaudited Audited Liabilities Capital 284 46 522% 284 284 Reserves and Surplus 1,828 1,652 11% 1,764 1,703 Deposits 1,978 - N.A. 815 - Borrowings 7,442 4,742 57% 7,393 7,071 Other L
Slide 35: Robust Operating and Financial Performance (1/2)
Robust Operating and Financial Performance (1/2) Total Revenue and PAT Yields and Cost of Funds2 All figures in INR Cr Avg Yield on Gross AUM Avg cost of funds Revenue PAT 1,387 NII + OI 7.8% 7.8% 8.1% 9.1% 9.0% 9.4% 7.5% 1,015 18.3% 927 17.9% 17.7% 17.5% 17.1% 738 16.5% 619 15.7% 446 11.6% 11.6% 11
Slide 36: Robust Operating and Financial Performance (2/2)
Robust Operating and Financial Performance (2/2) Growth Trajectory Networth and Capital Infusion # of active INR cr loan 102,021 146,277 175,531 189,175 225,713 280,349 303.756 accounts Infusion 183 - 86 39 - 172 - 12,134 1,988 2,113 10,734 Gross AUM 8,221 Net Worth (INR Cr) (INR Cr) 1,009 5,568 811
Slide 37: Marquee Shareholders Base – As on 30th Sep 2017
Marquee Shareholders Base – As on 30th Sep 2017 Shareholding Break –up Key Non-Promoter Shareholders (Holding above 1%) Holding Redwood Investment (Warburg Pincus) 15.82% Others - Domestic, 7.0% Foreign Institutions (FC, International Finance Corporation 7.99% FPI, FII), 38.0% Ourea Holdings (Kedara
Slide 38: Disclaimer
Disclaimer This presentation has been prepared by AU SMALL FINANCE BANK LIMITED (the “Bank”) solely for information purposes, without regard to any specific objectives, financial situations or informational needs of any particular person. All information contained has been prepared solely by the Ban
Slide 39: Thank You
THANK YOU 39
Slide 40: Abbreviations
Abbreviations ALM Asset Liability Management NPA Non Performing Assets AUM Asset Under Management NSE National Stock Exchange BSE Bombay Stock Exchange OPEX Operating Expenses CASA Current Account Deposits and Savings Account Deposit PAT Profit After Tax CRAR Capital Adequacy Ratio PPOP Pre-Provisio
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