Pnb Housing Finance Limited · NSE:PNBHOUSING
Pnb Housing Finance — Q3 FY2020 Earnings Presentation
69 slides from Pnb Housing Finance's earnings presentation, Jan 23, 2020
Slide 1: Exchange filing cover letter: Investor Presentation
January 23, 2020 The BSE Limited, National Stock Exchange of India Limited, Listing Department, Listing Department Phiroze Jeejeebhoy Towers, "Exchange Plaza" Dalal Street, Bandra Kurla Complex, Mumbai - 400 001 Sandra (E) , Mumbai - 400 051 Scrip Code: 540173 Symbol: PNBHOUSING Dear Sirs, Sub: Inve
Slide 2: Investor Presentation January 2020
Investor Presentation January 2020 1
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by PNB Housing Finance Ltd (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any secur
Slide 4: About PNB Housing Finance
About PNB Housing Finance Housing
Slide 5: Leading Housing Finance Company…
Leading Housing Finance Company… Write-offs since Inception Asset Under Disbursement (on cumulative Management INR 15,800 Crore* disbursement) INR 86,297 Crore (US$ 2,215 mn) 7 bps (US$ 12,097 mn) Average Cost of GNPA Borrowing 1.45% on AUM 8.30%* 1.75% on Loan Assets Deposits 4 delivery Retail Loan
Slide 6: …incorporated in 1988
…incorporated in 1988 • Included in MSCI Global Small Cap • First HFC to Index issue Green • Raised ECB Bonds to IFC of US$ • IPO - Raised 465mn (INR 2019 INR 3,000 Crore 3,324 crore) • AUM crossed • AUM crossed INR INR 25,000 2018 85,000 Crore Crore • Expanded to over 2017 100 branches • Introduced
Slide 7: HFC Sector well placed...
HFC Sector well placed... Housing
Slide 8: India's Mortgage Market
India’s Mortgage Market Under penetrated mortgage market, rising urbanization coupled with increase in housing demand is leading to mortgage market expansion Indian mortgage market is significantly under-penetrated Trend in urbanization of population Mortgage to GDP Ratio (%) 2,500 2,242 35% 82% 2,1
Slide 9: Mortgage Sector Growth: Limited Interest Rate Sensitivity
Mortgage Sector Growth: Limited Interest Rate Sensitivity Leading Bank Home Loan Rate Overall Growth Banks Growth HFC's/NBFC's Growth 30.00% 26% 25.00% 22% 22% 21% 20% 20.00% 17% 17% 19% 19% 18% 18% 17% 15.00% 15% 15% 14% 11% 13% 10% 10.00% 9% 10.8% 10.0% 10.2% 10.2% 9.6% 8.7% 8.4% 8.8% 8.3% 5.00% 0
Slide 10: Sustainable Growth of HFCs
Sustainable Growth of HFCs Portfolio Growth of HFCs Total Loan of all HFCs: INR 10.5 trillion as on Jun-19 30% 26% 26% 24% Top 5 HFCs: 82% 21% 22% 22% 20% 19% 20% 22% 15% 12.9% 19% 21% 19% 16% 13% 10% 1.1% 6% 8% 1.7% 3% 1.8% 39.7% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Jun-19 7.2% Other Loans Ove
Slide 11: Government Initiatives
Government Initiatives Housing
Slide 12: Growth Drivers
Growth Drivers Urbanization Improved Affordability Changing Demographics Home Buyers Developers Financers • GST rate cut from 12% to 5% on • RERA results in higher • Infrastructure status for affordable under-construction property developers accountability housing, enabling easier institutional cred
Slide 13: PMAY-CLSS
PMAY-CLSS Changes / Inclusion in the scheme effective 1-Jan-17 • Existing scheme renamed as PMAY-CLSS for EWS/LIG • Maximum tenure changed from 15 to 20 years • Scheme extended to Middle Income (MIG) available upto March 2020 Category EWS LIG MIG I MIG II Household Income (INR Lakhs per annum) 3 6 1
Slide 14: Sector Initiatives by Government
Sector Initiatives by Government Additional liquidity support of Relaxation in the minimum holding INR 10,000 Crore totalling to period to six months for securitisation INR 30,000 Crore to NHB for further lending to HFCs Enhancement of bank’s exposure limit On-lending of housing loans upto to 20% of
Slide 15: Liquidity Position
Liquidity Position Housing
Slide 16: Long Term Resource Mobilisation
Long Term Resource Mobilisation Deposits Bank Term Loan • 2nd highest deposit mobilizer • Borrowed INR 11,000 Crore during among HFCs; mobilized INR 7,649 9MFY20; existing relationship with Bank Term Deposits crore during 9MFY20 31 banks Loan Resource NCDs Mobilisation • Raised Non Convertible Deben
Slide 17: Incremental Resource Mobilization
Incremental Resource Mobilization (INR Crore) Post Liquidity Issues 13,896 12,937 11,806 12,057 11,550 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 • Mobilized over INR 60,000 Crore in last 5 quarters • Focus on Long term borrowing with Commercial Paper exposure reduced to 3% as on 31-Dec-19 from 12% as on 31
Slide 18: Deposits
Deposits (INR Crore) Deposits as 19% % of total 26% 19% 17% resources 226,742 153,588 97,217 96,754 16,470 14,315 11,586 9,987 31-Mar-17 31-Mar-18 31-Mar-19 31-Dec-19 Deposit Outstanding No. of Deposit Accounts 17
Slide 19: Asset Liability Maturity profile
Asset Liability Maturity profile Graph as on 31-Dec-19 (INR Crore) 27,241 20,345 20,575 17,298 17,209 13,505 11,647 10,671 5,353 4,719 5,741 5,535 1,842 1,620 upto 1 month 1-3 months >3-6 months >6-12 months 1-3 years 3-5 years >5 years Total Assets Total Liabilities upto 1 >3-6 >6-12 Particulars As
Slide 20: Financial Performance of the Company
Financial Performance of the Company 19
Slide 21: Stable Performance QoQ
Stable Performance QoQ Stable NIM… ..and Gross Margin… ..supported by improving Cost To Income… 3.06% 3.18% 3.14% 3.19% 3.39% 3.51% 3.44% 3.42% 19.48% 19.89% 2.98% 18.57% 3.04% 16.18% 16.78% Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 ..wi
Slide 22: Highlights – Q3FY20 vs Q3FY19
Highlights – Q3FY20 vs Q3FY19 Disbursement (INR Crore) AUM (INR Crore) NII (INR Crore) +8% +1% -66% 9,345 86,297 558 566 79,737 3,196 Q3FY19 Q3FY20* 31-Dec-18 31-Dec-19 Q3FY19 Q3FY20 *Retail and Corporate disbursement degrew by 26% (YoY) and 84% (YoY) PAT (INR Crore) Opex to ATA respectively -22% -1
Slide 23: Highlights – Q3FY20 vs Q3FY19
Highlights – Q3FY20 vs Q3FY19 Average Yield Average Cost of Borrowing Spread -3 bps -3 bps 10.77% 10.74% 8.21% 8.21% 2.56% 2.53% Q3FY19 Q3FY20 Q3FY19 Q3FY20 Q3FY19 Q3FY20 NIM Gross Margin -8 bps -35 bps 3.06% 2.98% 3.39% 3.04% Q3FY19 Q3FY20 Q3FY19 Q3FY20 Ratios are calculated on Monthly Average Gros
Slide 24: Expected Credit Loss (ECL) Provisions
Expected Credit Loss (ECL) Provisions Classification of the Assets based on the ECL computation under Ind AS: Particulars (INR Crore) 31-Dec-19 30-Sep-19 31-Dec-18 Gross Stage 3 (GNPA) 1,212.76 624.06 335.36 % portfolio in Stage 3 (GNPA%) 1.75% 0.84% 0.47% ECL Provision Stage 3* 344.83 138.93 76.19
Slide 25: Expansion Led Growth and Unique Operating Model
Expansion Led Growth and Unique Operating Model 24
Slide 26: Business Operations
Business Operations No. of Branches Branches – Point of Sales & Services Hubs – Fountain head for Decision Making No. of Branches Unique Cities* 3 105 18 2 Geography Hub Branches 15 21 North 8 33 16 8 South 8 35 9 5 64 West 7 37 6 7 32 0 New Branches (opened in FY18, FY19 & 9MFY20) contribute 27 ~23
Slide 27: Consistency in Underwriting with advent of Technology
Consistency in Underwriting with advent of Technology Scalable Hub and Spoke Model Spokes Regional Hub Central Operations Customer acquisition / Underwriting Post Disbursement Operations servicing Field Investigation CPC Fountain head Fraud Control DSA PHFL for decision Unit making Underwriter revie
Slide 28: Robust Risk Buying Processes
Robust Risk Buying Processes Underwriting to Collections Specialization Customer profiling Other mitigating measures 3C Approach • Selective approach to • 3C approach: Counsel, • Professionally customer profiling • Mark to Market policies qualified with vast with tailor made Collect and Cure mortgag
Slide 29: Strong Business growth
Strong Business growth (INR Crore) Disbursement +32% 36,079 33,195 20,639 15,800 FY17 FY18 FY19 9MFY20 Asset +43% 84,722 86,297 62,252 41,492 74,023 69,194 57,014 38,531 31-Mar-17 31-Mar-18 31-Mar-19 31-Dec-19 AUM Loan Assets 1 Crore = 10 mn 28
Slide 30: Moderate NPAs in a seasoned Book
Moderate NPAs in a seasoned Book Non-Performing Assets 1.75% • Gross NPA on AUM at 1.45% and on Loan 1.44% Assets at 1.75% • Excluding the three corporate book accounts, 0.85% which were that informed as stretched in May 0.84% 2019, the Gross NPA is at 0.88% of Loan Assets 0.67% 0.65% 0.47% 0.48% 0.
Slide 31: Sustainable Portfolio Mix
Sustainable Portfolio Mix 30
Slide 32: Asset Under Management
Asset Under Management As % to AUM Product-wise Break-up Consistent Segment Mix Individual Housing Loans 4% Retail Loan Against Property 19% 18% 20% 21% 18% 12% Retail Non- residental Premises Loans 18% Construction Finance 59% 4% 2% Corporate Term Loan Lease Rental Discounting Segment-wise Breakup
Slide 33: Loan Assets Walk and Securitized Pool Highlights
Loan Assets Walk and Securitized Pool Highlights Asset Bridge Highlights of Sold Portfolio (INR Crore) • Sold Corporate Finance portfolio worth INR 1,963 Crore during 9MFY20 86,297 • Help in improving CRAR 17,103 69,194 • Reported AUM is net of Sell Down portfolio Highlights of Securitized Pool • De
Slide 34: Retail Focused Lending Operations
Retail Focused Lending Operations Retail segment contribute 92% of the 9MFY20 disbursement Loans given as Individual Housing Loans, Loan Against Property and Non Residential Premises Loans Focus on mass housing segment Focus on completed properties; under construction (APF) funding reduced from 40%
Slide 35: Retail Book Average Ticket size
Retail Book Average Ticket size Average Ticket Size Range 1.57% 0.87% 0.86% 1.60% 0.65% 1.40% 0.56% 1.22% 5.53% 5.21% 5.05% 5.01% 20.40% 19.15% 23.47% 21.14% 17.01% 19.10% 18.66% 19.17% 27.96% 27.35% 28.33% 25.71% 29.10% 23.70% 24.74% 25.51% 31-Mar-17 31-Mar-18 31-Mar-19 31-Dec-19 >15 Crore 10-15 Cr
Slide 36: Key Loan Profile
Key Loan Profile Individual Housing Loans Retail Loan Against Property INR 30 Lakh INR 48 Lakh Average Ticket Size (US$ 42.1k) (US$ 67.3 k) Weighted Average Loan to Value (at 71% 49% Origination) Salaried vs Self- 72% : 28% 19% : 81% Employed Primary Security Mortgage of Property Financed Mortgage o
Slide 37: Corporate Book
Corporate Book Housing
Slide 38: Corporate Book Summary
Corporate Book Summary Unique Corporate AUM houses ATS No. of Unique No. of Loan Product Segment % of AUM (INR Crore) INR Crore Corporate houses Accounts (US$ mn) 145.8 Construction Finance 10,733 12% 180 (20.4) 98.8 Corporate Term Loan 3,126 4% 150 66 (13.9) 116.1 Lease Rental Discounting 1,534 2%
Slide 39: Corporate Book – primarily exposed to Mass Housing
Corporate Book – primarily exposed to Mass Housing Bifurcation of Units funded by ticket size 1% 1% 4% 16% 78% Upto INR 1 Crore 1-3 Crore 3-5 Crore 5-8 Crore > 8 Crore Data as on 30-Sep-19 Includes Construction Finance and Corporate Term Loan 38
Slide 40: Corporate Book Risk Buying and Review Mechanism
Corporate Book Risk Buying and Review Mechanism • External valuation and legal title checks to supplement inhouse expertise Risk Buying • Centralised team with specialisation across Acquisition, Technical, Legal, Credit, Operations • Effective risk management with segregation of responsibilities • S
Slide 41: Corporate Book Approval Process
Corporate Book Approval Process CCB (Includes 3 independent Board members & Managing Director) Committee of Management (Managing Director, Executive Directors and CFO) Managing Director Executive Directors (Business and Risk) Centralized Underwriting, Technical, Legal and Operations team at Central
Slide 42: Construction Finance Loan Stages
Construction Finance Loan Stages Real Estate Project Lifecycle Risk / Pricing Usage, Conversion and Approvals from Land aggregation Land registration competent authorities Post Launch Apartment Inventory Stage I Stage Stage I StageIIII Stage Stage III III Stage Stage IV IV Stage Stage VV PNB Housing
Slide 43: Corporate Term Loans and Lease Rental Discounting
Corporate Term Loans and Lease Rental Discounting Corporate Term Loans Lease Rental Discounting • Constitutes 2% of AUM • Constitutes 4% of AUM • Spread across 14 reputed • Spread across 49 reputed developers developers • Presence in 8 large cities • Top 7 markets contributes over 87% • 100% of LRD
Slide 44: Corporate Book Stretched Exposures under Corrective Measures
Corporate Book Stretched Exposures under Corrective Measures 2 Key Corporate Book Exposures identified through Early warning Issue: Weighted Exposure Signals • Increase in FSI resulting in scope change Average • Aberration due to litigation Security Status: Coverage of • Stronger partner expected to
Slide 45: Operational and Financial Performance
Operational and Financial Performance 44
Slide 46: Well Diversified Resource Profile
Well Diversified Resource Profile (INR Crore) Access to a Diverse Base of Funding Relationships with multiple lending partners 7.12% 6.54% 8.45% 7.36% 31 Banks 31 Pension Funds 6.39% 7.73% 3.92% 2.47% 18.20% 22.93% 19.47% 25.86% 5.69% 6.12% 504 Provident 2 Multilateral 17.23% Funds Agencies 17.48% 1
Slide 47: Margin Analysis
Margin Analysis Average Yield Average Cost of Borrowings Spread 10.76% 10.24% 10.35% 10.86% 8.55% 8.00% 8.30% 2.54% 2.56% 7.70% 2.21% 2.35% FY17 FY18* FY19* 9MFY20* FY17 FY18* FY19* 9MFY20* FY17 FY18* FY19* 9MFY20* NIM Gross Margin 3.19% 3.11% 3.50% 3.34% 3.31% 2.97% 2.93% 3.27% FY17 FY18* FY19* 9MF
Slide 48: Operating Leverage playing out with Better Return Profile
Operating Leverage playing out with Better Return Profile Opex to ATA Ratio Cost to Income Ratio 0.73% 22.43% 0.65% 19.61% 0.61% 0.57% 17.22% 17.11% FY17 FY18* FY19* 9MFY20* FY17 FY18* FY19* 9MFY20* Return on Asset Return on Equity 1.56% 1.61% 17.44% 1.46% 1.44% 14.92% 14.20% 14.99% FY17 FY18* FY19*
Slide 49: CRAR and Gearing
CRAR and Gearing Capital to Risk Asset Ratio 21.62% 5.14% 16.67% 17.06% 3.92% 13.98% 2.97% 2.98% 16.48% 12.75% 14.09% 11.00% 31-Mar-17 31-Mar-18 31-Mar-19 31-Dec-19 Tier 2 Tier 1 Average Gearing (x) 9.30 8.97 8.72 7.60 31-Mar-17 31-Mar-18* 31-Mar-19* 31-Dec-19* Ratio is calculated on Monthly Average
Slide 50: Shareholding
Shareholding Housing
Slide 51: Shareholding
Shareholding Shareholding as on 27-Dec-19 4.13% 0.89% 2.43% 4.48% Top Shareholders 32.65% 23.19% General Atlantic Singapore Fund, Franklin Templeton MF, Varde Holdings, Fidelity International, Malabar Investments, Auburn Ltd, Vanguard, Reliance Capital MF, Birla MF, Blackrock (ETF) 32.23% Promoters
Slide 52: Detailed Financials and Valuations
Detailed Financials and Valuations 51
Slide 53: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (INR Crore) Q3 FY20 Q3 FY19 YoY Q2 FY20 QoQ 9M FY20 9M FY19 YoY FY19 Interest Income 1,890.4 1,764.1 2,015.9 5,885.6 4,900.0 6,792.9 Add: Net gain on fair value changes 32.5 51.8 24.0 95.9 78.5 128.9 Add: Income on derecognized (assigned) loans 104.2
Slide 54: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (INR Crore) 30-Sep-19 31-Mar-19 Particulars (INR Crore) 30-Sep-19 31-Mar-19 LIABILITIES ASSETS 1 Financial Liabilities 1 Financial Assets (a) Derivative financial instruments 172.9 210.8 (b) Payables (a) Cash and cash equivalents 4,330.1 4,034.0 (I) Trade Payab
Slide 55: Saksham – Contributing to the Society
Saksham – Contributing to the Society 54
Slide 56: Glimpses of Social Interventions
Glimpses of Social Interventions Enhancing Human Potential • Partnered with The Confederation of Real Estate Developers Association of India (CREDAI) to conduct Onsite & Offsite skill enhancement training programmes for construction workers Reaching Out, Reaching Far • Collaborated with various NGOs
Slide 57: Winning Awards & Accolades
Winning Awards & Accolades Felicitated as winner for Awarded for Best Mr. Nitant Desai Recognized at the Once again, awarded Awarded for Excellence Excellence in Operations Customer Engagement awarded amongst prestigious 6th CSR Housing Finance Firm in Project Management at the IDC India Insights In
Slide 58: Management Team...
Management Team... Housing
Slide 59: …with Extensive Industry Experience
…with Extensive Industry Experience Age : 57 Years No. of Years with PNBHF : 9 Years Sanjaya Gupta Managing Director Prior Engagements : AIG, ABN Amro Bank N.V. and HDFC Limited Age : 47 Years Age : 54 Years Age : 57 Years No. of Years with No. of Years with No. of Years with PNBHF : 7 Years PNBHF :
Slide 60: …under the Aegis of a Highly Experienced Board
…under the Aegis of a Highly Experienced Board Sh CH. S. S. Mallikarjuna Rao Sh. Lingam Venkata Prabhakar Sunil Kaul Shital Kumar Jain Gourav Vallabh Non Executive Chairman Non Executive Director Non Executive Director Independent Director Independent Director Age: Age: Age: Age: Age: 57 Years 57 Ye
Slide 61: Corporate Governance
Corporate Governance Board of Directors It has 11 members,1 non-executive chairman, 2 non-executive directors, 7 independent directors and Managing Director Audit Committee (ACB) It has 3 members, all are independent directors Nomination and Remuneration Committee (NRC) It has 4 members, 2 are indep
Slide 62: Key Takeaways
Key Takeaways Improving Cost to Strong Wide Spread Retail Moderate NPA’s in Diversified Income Ratio Balance Sheet Distribution Network a Seasoned Book Borrowing Mix with and Unique balanced ALM Operating Model Wide spread retail Moderate NPA in a Diverse funding mix Operating leverage Conservative
Slide 63: Annexure
Annexure 62 @ pnb Housing Finance Limited
Slide 64: Return to Shareholders
Return to Shareholders Earnings Per Share (INR) Dividend Per Share (INR) 71.2 9.0 9.0 50.5 6.0 36.7 27.5 3.4 FY16 FY17 FY18* FY19* FY16 FY17 FY18 FY19 Book Value Per Share (INR) 495.0 450.5 394.2 336.7 169.1 31-Mar-16 31-Mar-17 31-Mar-18* 31-Mar-19* 31-Dec-19* *As per IND AS 63
Slide 65: Employee Efficiency
Employee Efficiency (INR Crore) Disbursement / Employee Loans Outstanding / Employee 28.99 49.79 51.05 24.25 24.88 45.28 21.23 39.91 FY16 FY17 FY18 FY19 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19 Total Revenue / Employee Profitability / Employee 0.82 5.30 0.73 4.59 4.79 0.62 3.96 0.48 FY16 FY17 FY18* F
Slide 66: Additional Details – Individual Housing Loans
Additional Details – Individual Housing Loans (INR Crore) Individual Housing Loans 59% of AUM 50,809 1% 48,915 5% 80% 36,549 8% 24,868 6% Home Purchase Residential Plot Residential Plot cum Constn 31-Mar-17 31-Mar-18 31-Mar-19 31-Dec-19 Self Construction Home Improvement/Extn 65
Slide 67: Glossary
Glossary ATA Average Total Assets GNPA Gross Non-Performing Asset ATS Average Ticket Size HFCs Housing Finance Companies AUM Asset Under Management LAP Loan against Property BVPS Book Value per Share LIG Low Income Group C/I Cost to Income LRD Lease Rental Discounting CRAR Capital to Risk Asset Rati
Slide 68: Formulas
Formulas Ratios Formulas Used Average Borrowings (%) Interest Expense / Average Borrowings Average Gearing Ratio (x) Average Borrowings / Average Net worth Average Yield (%) (Interest Income + Assignment Income) on Loans / Average Loan Assets Operating Expenditure(Employee Cost + Other Expenses + De
Slide 69: Thank You
Thank You Company: PNB Housing Finance Limited CIN: L65922DL1988PLC033856 Ms. Deepika Gupta Padhi (Head-Investor Relations) Phone: +91 11 23445214 Investor.relations@pnbhousing.com www.pnbhousing.com 68
PNB Housing Finance — Q3 FY2020 Earnings Presentation on 6ix