Creditaccess Grameen Ltd. · NSE:CREDITACC
Creditaccess Grameen — Q4 FY24 Earnings Presentation
42 slides from Creditaccess Grameen's earnings presentation, May 2024
Slide 1: CreditAccess Grameen Limited Q4 & FY24 Investor Presentation
CreditAccess Grameen Limited Q4 & FY24 Investor Presentation May 2024 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 Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 3
Slide 4: Q4 FY24: Key Business Highlights
Q4 FY24: Key Business Highlights Robust Business Momentum, Sustainable Operating Profitability, Best In Class Asset Quality Q4 FY24 YoY% QoQ% • Crossed INR 25,000 crore AUM in the 25th year of business GLP (INR Cr) 26,714 +27.0% +14.3% Borrowers (Lakh) 49.18 +15.3% +4.8% • Portfolio growth driven by
Slide 5: Customer Growth Led By Robust Additions & High Retention
Customer Growth Led By Robust Additions & High Retention Robust Borrower Additions Borrower Vintage Borrowers (‘000) Q4 FY24 57% 25% 18% 126 Q3 FY24 56% 27% 17% 1,358 578 Q2 FY24 55% 28% 17% 4,918 Q1 FY24 52% 32% 16% 4,264 Q4 FY23 47% 36% 17% Q4 FY23 Addition Write-off Attrition Q4 FY24 < 3 years 3-
Slide 6: Asset Quality Update (1/2)
Asset Quality Update (1/2) PAR Trend PAR Movement 1.8% 1.7% 1.5% 1.2% 1.3% 1.2% 1.4% 1.5% 1.7% 1.2% 1.1% 1.0% 0.9% 1.2% 1.0% 0.8% 0.7% 1.0% 0.9% 0.7% 0.8% 0.6% 1.5% 1.7% Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 PAR 0+ Fresh PAR 0+ Write-offs PAR 0+ PAR 0+ PAR 30+ PAR 60+ PAR 90+ Mar-23 Accretion Mar-
Slide 7: Asset Quality Update (2/2)
Asset Quality Update (2/2) Q4 FY24 (INR Cr) Credit Cost (INR Cr) Q4 FY24 FY24 Asset Classification (dpd) EAD EAD% ECL% Opening ECL - (A) 410.7 347.8 Stage 1 0 – 15 (GL), 0 – 30 (RF) 25,438.8 98.4% 0.92% Additions (B) Stage 2 16 – 60 (GL), 31 – 90 (RF) 96.9 0.4% 55.68% - Provisions as per ECL 133.7 3
Slide 8: Stable Net Interest Margin Profile
Stable Net Interest Margin Profile Key Metrics Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Avg. New Disbursement Interest Rate % 21.9% 21.9% 22.0% 21.8% 21.4% Portfolio Yield % 19.7% 20.7% 21.1% 21.0% 21.0% Weighted Avg. Cost of Borrowing % 9.5% 9.6% 9.8% 9.8% 9.8% Marginal Cost of Borrowing % 9.4% 9.7%
Slide 9: Performance Vs. Annual Guidance
Performance Vs. Annual Guidance Initial Revised FY24 Key Indicators Variance FY24 Guidance FY24 Guidance Performance • GL book grew by 24.7% GLP Growth % 24.0% - 25.0% 24.0% - 25.0% 27.0% • RF book grew by 320.4% • Interest spread increased from 9.6% in FY23 to 11.0% in FY24 • Loan repricing • Super
Slide 10: FY25 Performance Guidance: Key Indicators
FY25 Performance Guidance: Key Indicators Key Indicators FY25 Guidance GLP Growth % 23.0% - 24.0% NIM % 12.8% - 12.9% Cost-to-Income Ratio % 30.0% - 31.0% Credit Cost (Provisions + Write-offs) – 2.2% - 2.4% % of Avg. On-Book Loan Portfolio Return on Assets % 5.4% - 5.5% Return on Equity % 23.0% - 23
Slide 11: FY25 – FY28: Reiterating Our Medium-Term Business Strategy
FY25 – FY28: Reiterating Our Medium-Term Business Strategy FY25 – FY28 FY25 – FY28 Leadership position in microfinance Guidance Guidance Key Indicators Key credit provider for graduating customers and low- (Earlier 18th May 2023) (Revised 7th May 2024) middle income informal segment households G
Slide 12: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 12
Slide 13: Q4 FY24: Key Performance Highlights
Q4 FY24: Key Performance Highlights NIM Cost/Income Ratio GLP Disbursements 13.1% 30.1% PPOP INR 26,714 Cr INR 8,053 Cr INR 683 Cr (+27.0% YoY) (+12.3% YoY) Wgtd. Avg. COB Opex/GLP Ratio (+35.8% YoY) 9.8% 4.7% ROA CRAR Total Total Equity GNPA: 1.18% PAT 5.7% 23.1% INR 6,570 Cr INR 397 Cr NNPA: 0.35%
Slide 14: FY24: Key Performance Highlights
FY24: Key Performance Highlights NIM Cost/Income Ratio GLP Disbursements 13.0% 30.5% PPOP INR 26,714 Cr INR 23,134 Cr INR 2,391 Cr (+27.0% YoY) (+24.8% YoY) Wgtd. Avg. COB Opex/GLP Ratio (+58.7% YoY) 9.8% 4.5% ROA CRAR Total Total Equity GNPA: 1.18% PAT 5.6% 23.1% INR 6,570 Cr INR 1,446 Cr NNPA: 0.3
Slide 15: Q4 & FY24: P&L Statement
Q4 & FY24: P&L Statement Profit & Loss Statement (INR Cr) Q4 FY24 Q4 FY23 YoY% Q3 FY24 QoQ% FY24 FY23 YoY% Interest Income 1,363.2 964.8 41.3% 1,244.4 9.5% 4,900.1 3,327.1 47.3% - Interest on Loans 1 1,340.5 950.1 41.1% 1,220.0 9.9% 4,812.5 3,277.4 46.8% - Interest on Deposits with Banks and FIs 22.
Slide 16: Q4 & FY24: Balance Sheet
Q4 & FY24: Balance Sheet Balance Sheet (INR Cr) Q4 FY24 Q4 FY23 YoY% Q3 FY24 QoQ% FY24 FY23 Cash & Other Bank Balances 1,313.9 1,436.4 -8.5% 1,168.5 12.4% 1,313.9 1,436.4 Investments 1,438.9 454.5 216.6% 1,390.2 3.5% 1,438.9 454.5 Loans - (Net of Impairment Loss Allowance) 25,105.0 18,939.8 32.6% 22
Slide 17: Continued Business Traction with Rural Focus
Continued Business Traction with Rural Focus Gross Loan Portfolio (INR Cr) Borrowers (‘000) 27.0% 15.3% 26,714 4,918 4,603 4,693 23,382 4,423 22,488 4,264 21,814 21,031 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 www.creditaccessgrameen.in 17
Slide 18: Consistent Growth in Infrastructure
Consistent Growth in Infrastructure Branches 10.1% 1,894 1,967* 1,826 1,877 1,786 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 * 13 branches were merged in Q4 FY24 Employees Loan Officers 15.7% 14.8% 19,241 19,041 19,395 13,336 13,054 13,191 16,759 17,391 12,044 11,490 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4
Slide 19: Robust Quarterly Performance Trend (1/2)
Robust Quarterly Performance Trend (1/2) Disbursements (INR Cr) Total Income (INR Cr) 12.3% 1,459 1,248 1,295 1,171 8,053 1,066 7,171 4,966 5,344 4,771 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Margin Analysis (%) Operating Efficiency (%) 20.7% 21.1% 21.0% 21.0%
Slide 20: Robust Quarterly Performance Trend (2/2)
Robust Quarterly Performance Trend (2/2) NII, PPOP, PAT (INR Cr) Asset Quality (%) 922 772 802 1.95% 690 763 1.78% 1.81% 1.59% 1.60% 683 544 563 602 1.21% 1.18% 503 0.97% 0.89% 0.77% 348 347 353 397 297 0.96% 0.94% 0.70% 0.60% 0.75% Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3
Slide 21: Stable Operational Efficiency
Stable Operational Efficiency GLP / Branch (INR Cr) GLP / Loan Officer (INR Cr) 2.0 13.6 12.3 1.8 1.8 1.8 11.8 11.9 12.0 1.7 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Borrowers / Branch Borrowers / Loan Officer 2,422 2,453 2,478 2,500 371 367 360 373 2,388 345 Q
Slide 22: Product Range To Meet Diverse Customer Needs
Product Range To Meet Diverse Customer Needs GLP - Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Product Mix (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total IGL 20,090 96% 20,670 95% 21,103 94% 21,800 93% 24,741 93% Family Welfare 67 0% 148 1% 150 1% 102
Slide 23: Well Diversified Presence Across India
Well Diversified Presence Across India Our Presence as on Mar-24 Uttar Pradesh Branch Network Q4 FY24 % Share Q4 FY23 % Share 16 States & 1 UT 98 Karnataka 341 17.3% 311 17.4% 383 Districts Bihar Maharashtra 300 15.3% 301 16.9% 1,967 Branches 158 Tamil Nadu 387 19.7% 378 21.2% West Bengal Madhya Pra
Slide 24: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 24
Slide 25: Progressing Well on Liability Strategy
Progressing Well on Liability Strategy Diversified Liability Mix - Institution / Instrument Wise (%) Focus on dynamic liability management NBFCs - TL • Focus on long-term funding with strong diversification between domestic FIs - TL 2.8% & foreign sources Banks - TL 10.6% 57.2% • Target to meet fund
Slide 26: Stable Liquidity/ ALM Position/ Credit Ratings
Stable Liquidity/ ALM Position/ Credit Ratings Static Liquidity / ALM Position For the Month For the Financial Year Debt Diversification Q4 FY24 Particulars (INR Cr) Apr-24 May-24 Jun-24 FY25 FY26 Opening Cash & Equivalents (A) 2,685.0 3,202.3 3,786.4 4,224.2 9,677.4 Total Drawdowns 5,885 Loan recov
Slide 27: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 27
Slide 28: 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 5% 22% 22% 26,714 23,134 4,910 21,031 18,539 4,055 4,264 3,912 3,824 16,599 15,466 13,587 11,011 11,996 10,389 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY2
Slide 29: 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 (%) 20.9% 5.01% 19.4% 18.8% 18.3% 18.9% 4.9% 4.8% 4.9% 4.7% 4.5% 3.44% 2.78% 13.0% 1.78% 1.95% 12.2% 10.9% 11.6% 4.43% 10.7% 36.7% 38.1% 39.0% 3
Slide 30: Past Eight Years Cross Cycle Performance
Past Eight Years Cross Cycle Performance 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 5.6% 5.1% 5.0% 24.9% 22.2% 4.2% 3.6% Avg: 3.6% 18.0% 16.3% Avg: 15.0% 12.3% 12.
Slide 31: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 31
Slide 32: Highly Motivated Team, Strong Management Foresight & Execution Strength
Highly Motivated Team, Strong Management Foresight & Execution Strength Management Team with Decades of Experience across Banking and Finance Industries Udaya Kumar Hebbar Ganesh Narayanan Balakrishna Kamath Managing Director Chief Executive Officer Chief Financial Officer Sudesh Puthran Firoz Anam
Slide 33: 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 34: 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 35: Calibrated Expansion Through Contiguous District-Based Approach
Calibrated Expansion Through Contiguous District-Based Approach Systematic geography selection based on the availability of infrastructure, competition, historical performance trend, social/ economic/ political/ climate risk, growth potential Ensures consistent replication of processes/ controls Fam
Slide 36: 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 – 8 times in a year at branches, 4 times
Slide 37: 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 38: 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 High touch-high tech delivery model: Future Upgrades & Investments • Digitized all customer touchpoints • Inv
Slide 39: 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 40: Strong Parentage & Shareholder Base
Strong Parentage & Shareholder Base Shareholding Pattern – March 2024 Others, 6.01 MF, AIF, Insurance, Committed to Micro Finance Business 15.76 Promoter • CreditAccess India B.V. (CAI) specialises in Micro & Small Enterprises Group, 66.58 financing • Widely held shareholding base: 279 shareholders
Slide 41: 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 42: For Further Queries:
For Further Queries: 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 www.creditaccessgrameen.in www.creditaccessgrameen.in