Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q3 FY2023 Earnings Presentation
61 slides from Edelweiss Financial Services's earnings presentation, Jan 31, 2023
Slide 1: Cover letter to stock exchanges
EW/Sec/2023/24 January 31, 2023 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E), Mumbai – 400 001. Mumbai – 400 051. Scrip Code: 532922 Symbol: EDELWEISS Dear Sir/Madam, Sub: Investor Presentation Please find attac
Slide 2: Earnings update – Quarter ended Dec 22
US $ version Edelweiss Financial Services Limited Earnings update – Quarter ended Dec 22
Slide 3: Contents
Contents 1 Overview & highlights of quarter ended Dec 22 3 2 Update on key priorities for FY23 23 3 Business performance 29 4 Governance & corporate responsibility 55 Business Update – Nuvama Wealth Management (formerly Edelweiss Wealth Management) 2
Slide 4: Overview & Highlights
Overview & Highlights Quarter ended Dec 22
Slide 5: Edelweiss at a glance – quarter ended Dec 22
Edelweiss at a glance – quarter ended Dec 22 Net Worth Ex-Insurance PAT BVPS $1,011 Mn $20 Mn $1 (FV $0.01) Liquidity Customer Assets $781 Mn $49,102 Mn 4
Slide 6: We are a diversified company across eight businesses
We are a diversified company across eight businesses Edelweiss Financial Services Ltd (EFSL) Credit Asset Management Insurance Asset Wealth Housing Alternative Reconstruction General Management NBFC Mutual Fund Life Insurance Finance Asset Mgt Insurance ECL Finance Edelweiss Edelweiss Edelweiss Edel
Slide 7: Performance overview – quarter ended Dec 22
Performance overview – quarter ended Dec 22 1 Ex-Insurance PAT grows by 31% YoY Slide 7 - 10 2 MF AUM grows to $12,079 Mn and Alts AUM increased 50% YoY to $5,436 Mn Slide 11 3 Customer reach grows 30% YoY to ~6 million Slide 12 4 Businesses are well capitalized with comfortable liquidity Slide 13 -
Slide 8: Profitability across businesses
1 Profitability across businesses Profit After Tax for the quarter in $ Mn EFSL Asset Asset ex-Insurance Credit Management Reconstruction 20 10 15 8 8 4 4 2 Dec 21 Dec 22 Dec 21 Dec 22 Dec 21 Dec 22 Dec 21 Dec 22 31% YoY 8% YoY 209% YoY 26% YoY 7
Slide 9: Earnings distribution across businesses
1 Earnings distribution across businesses $ Mn Business Dec 22 Dec 21 NBFC 4 4 Housing Finance 0 0 Mutual Fund 1 1 Alternatives Asset Management 7 1 Asset Reconstruction 10 8 Life Insurance (6) (6) General Insurance (3) (4) EFSL share in Wealth Management 4 3 BMU & Corporate (4) 1 (Less) Minority sh
Slide 10: Update on operating performance (1)
1 Update on operating performance (1) • GNPA steady at 2.97% with total provision cover of 312% NBFC • Wholesale inflows of $133 Mn in the quarter, $338 Mn YTD • New co-lending partnership with Bank of Baroda and State Bank of India Housing Finance • GNPA improved to 2.45% from 3.80% YoY. Collection
Slide 11: Update on operating performance (2)
1 Update on operating performance (2) Asset • Quarterly recoveries of $307 Mn Reconstruction • Capital employed in retail assets increased by 21% YoY • Individual APE grew at a 5-year CAGR of 13%, industry growth at 10% Life Insurance • Gross premium growth of 11% YoY to $46 Mn; claim settlement rat
Slide 12: Asset Mgt added AUM of $1,570 Mn in the quarter
2 Asset Mgt added AUM of $1,570 Mn in the quarter Mutual Fund AUM ($ Mn) Alternative Asset Mgt AUM ($ Mn) 12,079 5,436 9,893 3,612 3,648 5,919 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22 Growth of 22% YoY Growth of 50% YoY 11
Slide 13: Customer franchise continues to grow
3 Customer franchise continues to grow Total Customer Customer AssetsReach ($ Mn)(in Lakhs) Customer Reach (# in lakhs) 61 49,102 41,964 47 31,986 29 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22 Growth of 30% YoY Growth of 17% YoY 12
Slide 14: Businesses are well capitalized with comfortable liquidity
4 Businesses are well capitalized with comfortable liquidity Strong capitalization across businesses Conservative provisions for credit assets Comfortable liquidity of $781 Mn at ~26% of debt Debt reduction of ~$725 Mn over last 2 years 13
Slide 15: Strong capitalization across businesses
4 Strong capitalization across businesses Businesses Metric Value NBFC Capital Adequacy 34.5% Housing Finance Capital Adequacy 34.7% Asset Reconstruction Capital Adequacy 46.5% Life Insurance Solvency Ratio 219% General Insurance Solvency Ratio 173% 14
Slide 16: Conservative provisions for credit assets
4 Conservative provisions for credit assets Balance Sheet Provisions ($ Mn) IRAC Provisions IndAS Provisions 86 69 64 27 22 21 Dec 20 Dec 21 Dec 22 We have consistently provided for higher than IRAC norms 15
Slide 17: Cash flow plan
4 Cash flow plan $ Mn Jan 23 to Dec 23 Opening Available Liquidity (A) 785 Inflows Expected Inflows 1,039 Fresh Borrowings 749 Total Inflows (B) 1,788 Outflows Repayments 1,208 Disbursements 568 Total Outflows (C) 1,776 Closing Available Liquidity (A+B-C) 797 16
Slide 18: Assets in each tenor range adequately cover liabilities
4 Assets in each tenor range adequately cover liabilities $ Mn Assets Liabilities Excess / (Gap) Upto 1 year 1,582 1,401 181 1-3 years 1,413 821 592 3 years+ 1,317 1,160 157 17
Slide 19: Debt reduced by ~$725 Mn over last 2 years
4 Debt reduced by ~$725 Mn over last 2 years Debt ($ Mn) Debt distribution across businesses ($ Mn) 3,695 Business Dec 22 NBFC 1,041 2,982 Housing Finance 240 Alternatives 22 Asset Reconstruction 354 Wealth Management 605 BMU & Corporate 720 Gross Debt 2,982 (Less) Available liquidity 781 Dec 20 Dec
Slide 20: Update on Key Priorities for FY23
Update on Key Priorities for FY23
Slide 21: On track on our key priorities for the year
5 On track on our key priorities for the year Demerger and Listing of Nuvama Wealth Management Scaling Asset Management and Insurance businesses Reducing Wholesale loan assets 20
Slide 22: Demerger and Listing of Nuvama Wealth Management
5 Demerger and Listing of Nuvama Wealth Management Phase I • PAG’s strategic investment in Edelweiss Wealth Management Phase II • NCLT order received and made effective for Phase 2 demerger scheme • Solicit share entitlement report and fairness opinion Completed • Demerger completion • Board Approva
Slide 23: Nuvama's readiness to operate independently
5 Nuvama’s readiness to operate independently • Independent board • Independent credit ratings • Tech transition and allied investments • Strengthened governance • New brand and location • Formal demerger and subsequent listing Ongoing Refer to Business Update on Nuvama Wealth Management for details
Slide 24: 2nd highest AUM growth in the industry in CY22
5 2nd highest AUM growth in the industry in CY22 Total Customer Mutual Reach Fund Total (in(#) Folios Lakhs) Mutual Fund AUM ($ Mn) 12,079 11,32,000 9,893 9,20,000 5,919 4,30,000 3,563 2,86,000 Dec 19 Dec 20 Dec 21 Dec 22 Dec 19 Dec 20 Dec 21 Dec 22 More than tripled over 3 years; CAGR of 50% Nearly
Slide 25: Alts AUM doubled over 3 years; growth of 50% YoY
5 Alts AUM doubled over 3 years; growth of 50% YoY Total Customer Reach (in Lakhs) Alternatives AUM ($ Mn) 5,436 • Closed fundraising for AnZen India Energy Yield Plus Trust • A diversified Energy InvIT focusing on providing growth with predictable yields, with an initial AuM of over $278 Mn 2,597 •
Slide 26: Premium growth of 11% YoY for LI and 27% YoY for GI
5 Premium growth of 11% YoY for LI and 27% YoY for GI LI – Gross Premium for the quarter ($ Mn) GI – Gross Premium for the quarter ($ Mn) 46 18 41 36 14 7 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22 25
Slide 27: Wholesale inflows of ~$133 Mn in the quarter
5 Wholesale inflows of ~$133 Mn in the quarter ECLF wholesale loan assets ($ Mn) 1,401 1,280 942 459 278 Dec 20 Dec 21 Dec 22 Dec 23E Dec 24E Inflows of $338 Mn YTD 26
Slide 28: Business Performance: Credit
Business Performance Credit
Slide 29: Credit businesses at a glance
Credit Credit businesses at a glance Quarter ended Dec 22 Equity AUM Profit After Tax $558 Mn $1,764 Mn $5 Mn 28
Slide 30: NBFC: Business performance snapshot
NBFC NBFC: Business performance snapshot Key Metrics for the quarter Business Update • Maintained credit quality with stable asset quality ratios Equity ($ Mn) 462 o GNPA at 2.97% with total provision cover of 312% • Wholesale inflows of $133 Mn in the quarter, $338 Mn YTD AUM ($ Mn) 1,255 • Steady
Slide 31: NBFC: Financial performance snapshot
NBFC NBFC: Financial performance snapshot $ Mn For the quarter ended Dec 22 Dec 21 Credit Assets 1,192 1,629 Gross Loan book 682 982 Equity 462 469 Gross Revenue 64 64 Net Revenue 31 20 Opex 14 11 Credit Cost 12 3 Profit After Tax 4 4 GNPA 2.97% 3.09% NNPA 1.91% 2.31% Total Provision Cover 312% 187%
Slide 32: Housing Finance: Business performance snapshot
Housing Finance Housing Finance: Business performance snapshot Key Metrics for the quarter Business Update • New co-lending partnerships with Bank of Baroda and Equity ($ Mn) 96 State Bank of India • Disbursals ongoing with Standard Chartered Bank and State AUM ($ Mn) 502 Bank of India under co-lend
Slide 33: Housing Finance: Financial performance snapshot
Housing Finance Housing Finance: Financial performance snapshot $ Mn For the quarter ended Dec 22 Dec 21 Credit Assets 395 445 Gross Loan book 370 413 Equity 96 93 Gross Revenue 13 17 Net Revenue 4 7 Opex 4 4 Credit Cost 0 3 Profit After Tax 0 0 GNPA 2.45% 3.80% NNPA 1.92% 2.98% Total Provision Cove
Slide 34: Business Performance: Asset Management
Business Performance Asset Management
Slide 35: Asset Management businesses at a glance
Asset Management Asset Management businesses at a glance Quarter ended Dec 22 Equity AUM Profit After Tax $65 Mn $17,515 Mn $8 Mn Fee Income $14 Mn 34
Slide 36: Mutual Fund: Business performance snapshot
Mutual Fund Mutual Fund: Business performance snapshot Key Metrics for the quarter Business Update • Retail folios grew by 23% YoY to 11.3 lakhs as on Dec 22 Equity ($ Mn) 24 • Equity AUM grew by 15% YoY to $2,670 Mn; net equity inflows of $338 Mn in the quarter • Second highest in total AuM growth
Slide 37: Mutual Fund: Financial performance snapshot
Mutual Fund Mutual Fund: Financial performance snapshot $ Mn For the quarter ended Dec 22 Dec 21 AUM 12,079 9,893 Net New Money 797 1,437 Equity 24 23 Net Revenue 5 5 Opex 4 4 Profit After Tax 1 1 36
Slide 38: Consistent growth in AUM and customer base
Mutual Fund Consistent growth in AUM and customer base MF Equity AUM ($ Mn) MF Debt Passive AUM ($ Mn) 2,670 8,238 2,319 5,979 3,648 966 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22 SIP Book ($ Mn) Active Folios (# in Lakhs) 21 11.3 19 9.2 11 3.6 Dec 20 Dec 21 Dec 22 Dec 20 Dec 21 Dec 22 Growing SIP bo
Slide 39: Alternative Asset Mgt: Business performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Business performance snapshot Key Metrics for the quarter Business Update • AUM grew 49% YoY and FPAUM grew 34% YoY Equity ($ Mn) 41 • Raised AUM of $519 Mn in the quarter; $1,425 Mn YTD AUM ($ Mn) 5,436 • Successfully launched first InvIT (Privately list
Slide 40: Alternative Asset Mgt: Financial performance snapshot
Alternative Asset Mgt Alternative Asset Mgt: Financial performance snapshot $ Mn For the quarter ended Dec 22 Dec 21 AUM 5,436 3,648 Fee Paying AUM 2,911 1,963 Equity 41 24 Net Revenue 14 9 Opex 6 7 Profit After Tax 7 1 39
Slide 41: Alternative assets overview
Alternative Asset Mgt Alternative assets overview AUM – Strategy wise Fee Paying AUM – Strategy wise AUM – Tenure wise 5% 10% 17% 16% 33% 40% 25% $5,436 Mn $2,911 Mn $5,436 Mn 15% 15% 83% 17% 24% Special Situations Special Situations Asset Over 3 year duration Structured Credit Structured Credit Ass
Slide 42: Business Performance: Asset Reconstruction
Business Performance Asset Reconstruction
Slide 43: Asset Reconstruction: Business performance snapshot
ARC Asset Reconstruction: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 326 • Recoveries of $307 Mn for the quarter; $709 Mn YTD, of which 12% was from retail portfolio AUM ($ Mn) 4,409 • Deployed $39 Mn in the quarter; $131 Mn YTD Capital employed • Capital
Slide 44: Asset Reconstruction: Financial performance snapshot
ARC Asset Reconstruction: Financial performance snapshot $ Mn For the quarter ended Dec 22 Dec 21 AUM 4,409 5,049 Capital Employed 605 636 Wholesale assets 520 566 Retail assets 85 70 Equity 326 291 Gross Revenue 32 29 Opex 4 4 Profit After Tax 10 8 Edelweiss’ share in PAT 6 5 43
Slide 45: Business Performance: Insurance
Business Performance Insurance
Slide 46: Insurance businesses at a glance
Insurance Insurance businesses at a glance Quarter ended Dec 22 Gross Premium Policies Issued Customer Reach $62 Mn # 120,600 ~42 lakhs 45
Slide 47: Life Insurance: Business performance snapshot
Life Insurance Life Insurance: Business performance snapshot Key Metrics for the quarter Business Update Equity ($ Mn) 85 • Gross premium growth of 11% YoY to $46 Mn • Traditional Par and Non-Par products constitute ~83% Individual APE ($ Mn) 12 of product mix #Policies Issued 8,900 • Launched Edelw
Slide 48: Life Insurance: Financial performance snapshot
Life Insurance Life Insurance: Financial performance snapshot $ Mn For the quarter ended Dec 22 Dec 21 Net Premium Income 44 40 Investment Income & Other 19 8 Income Total Income 64 48 Policy benefits & insurance policy 50 34 liability Other expenses 20 20 Profit After Tax (6) (6) Edelweiss’ share i
Slide 49: General Insurance: Business performance snapshot
General Insurance General Insurance: Business performance snapshot Key Metrics for the quarter Business Update • Gross direct premium income (GDPI) growth of 55% YoY against industry growth of 16% in YTD Dec 22 Equity ($ Mn) 19 • Launched EDGE – an open API distribution platform to enhance product o
Slide 50: General Insurance: Financial performance snapshot
General Insurance General Insurance: Financial performance snapshot $ Mn For the quarter ended Dec 22 Dec 21 Net Premium Income 10 7 Investment Income & Other 3 2 Income Total Income 13 9 Policy benefits & insurance policy 7 8 liability Other expenses 8 6 Profit After Tax (3) (4) 49
Slide 51: Business Performance: Wealth
Business Performance Wealth
Slide 52: Wealth Management: Business performance snapshot
Wealth Mgt Wealth Management: Business performance snapshot Key Metrics for the quarter Business Update • Transitioned to Nuvama Wealth Management limited AUA ($ Mn) 27,178 • AUA grew 16% YoY with net new money of $348 Mn for the quarter LAS loan book 405 • Distribution income increased by 53% YoY (
Slide 53: Wealth Management: Financial performance snapshot
Wealth Mgt Wealth Management: Financial performance snapshot $ Mn For the quarter ended Dec 22 Dec 21 AUA 27,178 23,373 Equity 261 216 Gross Revenue 70 58 Net Revenue 57 47 Opex 43 38 Profit After Tax 10 7 Edelweiss’ share in PAT 4 3 52
Slide 54: Governance & Corporate Responsibility
Governance & Corporate Responsibility
Slide 55: 8 Member Board with 4 Independent Directors
8 Member Board with 4 Independent Directors Mr. Ashok Kini Independent Director • Former Managing Director (National Banking Group) State Bank of India • Served as an advisor to the Thorat Committee on Financial Inclusion at RBI • 35 years of banking experience Dr. Ashima Goyal Independent Director
Slide 56: Significant institutional ownership
Significant institutional ownership Shareholding Pattern as on Dec 30, 2022 Key Shareholders above 1% Percent 1 Pabrai Investment Funds 8.2% Employee Trust 2 BIH SA 5.1% DIIs, Non 4.8% Promoter Group Institutions 3 Baron Asset Management 4.3% & Others 32.6% 4 TIAA CREF funds 4.3% 24.9% 5 LIC 2.6% 6
Slide 57: Our contribution to building a more sustainable tomorrow
Our contribution to building a more sustainable tomorrow Under the leadership of EdelGive Foundation, we have… Over ~$86 Mn mobilized Partnered with over 158 Assisted over 60% of EdelGive’s Ensured long term through commitments high caliber NGOs NGO partners to grow at a CAGR association with averag
Slide 58: Our investment in communities
Our investment in communities EdelGive Foundation’s commitment to investing in communities 88 Districts Sustainable Women across 11 States Quality Education Livelihoods Empowerment 20 lakh children impacted 90,000 Individuals trained 2 lakh women supported 31,000 schools reached 1,700 watershed stru
Slide 59: Trusted partner: EdelGive funding partners & networks
Trusted partner: EdelGive funding partners & networks Foundations, Corporates and HNIs partner with Edelgive Platform for their philanthropic allocation 58
Slide 60: Safe Harbour
Safe Harbour DISCLAIMER : This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies (“Ed
Slide 61: Safe Harbour
Safe Harbour Slide 4: Net worth includes MI, investment in CCD by CDPQ of $79 Mn and excludes EWM, Ex-Insurance PAT is post MI Slide 4,13,16,17,18: Available Liquidity is calculated as on balance sheet date and includes high quality liquid assets and LAS book. Numbers are based on management estimat
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