Creditaccess Grameen Ltd. · NSE:CREDITACC
Creditaccess Grameen — Q4 FY23 Earnings Presentation
38 slides from Creditaccess Grameen's earnings presentation, May 2023
Slide 1: CreditAccess Grameen Limited Q4 & FY23 Investor Presentation
CreditAccess Grameen Limited Q4 & FY23 Investor Presentation May 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: FY23: Historic Year! Scaling New Heights! Setting New Benchmarks
FY23: Historic Year ! Scaling New Heights ! Setting New Benchmarks ✓ First Pure-play MFI To Cross INR 20,000 Crore Portfolio Mark ✓ Credit Rating Upgrade From ICRA And Ind-Ra To AA- (Stable), Highest Rating For Standalone MFI ✓ Maiden Public NCD Issue Worth INR 500 Crore ✓ First-of It’s Kind USD 35
Slide 5: Q4 FY23: Key Business Highlights
Q4 FY23: Key Business Highlights Robust Business Momentum, Strong Operating Profitability, And Best In Class Asset Quality YoY% QoQ% YoY% QoQ% Q4 FY23 Q4 FY23 Change Change Change Change GLP (INR Cr) 21,031 +26.7% +18.2% NII (INR Cr) 690 +32.7% +21.8% CA Grameen 17,561 +27.9% +18.5% PPOP (INR Cr) 50
Slide 6: Strong New Customer Addition Momentum
Q4 FY23: Strong New Customer Addition Momentum Robust New Borrower Addition over Past 12 Months, partially offset by Write-offs CA Grameen Pre-Write-off Borrower Growth of 21.1% Borrowers (‘000) New Borrower Addition Total % Share over past 12 Months 124 Karnataka 2,26,531 18.4% 995 379 Maharashtra
Slide 7: Superior Vintage Profile with High Borrower Retention
Q4 FY23: Superior Vintage Profile with High Borrower Retention Supporting the Retained / Higher Vintage Borrowers, whilst consciously Adding New Borrowers with Deep Rural Focus 1 Borrower Vintage Analysis CA Grameen MMFL 3 Focus on 3-Year Loans for Q4 FY23 48% 34% 18% Q4 FY23 45% 43% 12% High Vintag
Slide 8: Continued Improvement in Asset Quality
Q4 FY23: Continued Improvement in Asset Quality CA Grameen MMFL Consolidated Collection Efficiency (excl. arrears) Collection Efficiency (excl. arrears) Collection Efficiency (excl. arrears) 98% 98% 98% 99% 97% 97% 98% 98% 98% 98% 95% 96% Q3 FY23 Q4 FY23 Q3 FY23 Q4 FY23 Q3 FY23 Q4 FY23 CE% (excl. ar
Slide 9: Comfortably Placed to Protect NIMs
Q4 FY23: Comfortably Placed to Protect NIMs Key Metrics Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY23 Avg. New Disbursement Interest Rate % 20.3% 20.8% 21.5% 21.9% 21.3% Portfolio Yield % 18.4% 19.1% 19.6% 19.7% 18.9% Weighted Avg. Cost of Borrowing % 9.1% 9.2% 9.6% 9.5% 9.4% Marginal Cost of Borrowing % 8.7
Slide 10: Performance in line with Annual Guidance
Q4 FY23: Performance in line with Annual Guidance FY23 Q4 FY23 FY23 Key Indicators Guidance Performance Performance GLP – Growth % 24.0% - 25.0% 26.7% 26.7% 0.6% 2.4% (gross credit cost) (gross credit cost) Credit Cost 1.8% - 2.0% (Provisions + Write-offs) – % of Avg. On-Book (revised to Loan Portfo
Slide 11: Consistent Delivery Of Best-In-Class Cross Cycle Return Metrics
Consistent Delivery Of Best-In-Class Cross Cycle Return Metrics Cross-Cycle ROA (%) Cross-Cycle ROE (%) Strong Cross Cycle FY17-FY18 FY19 FY21 FY22 Performance Despite Demonetisation, UP Floods, Covid Covid Several Crisis farm loan waiver NBFC crisis Wave 1 Wave 2 5.1% 22.2% 5.0% 4.2% 18.0% 16.3% 3.
Slide 12: FY24 Performance Guidance: Key Indicators
FY24 Performance Guidance: Key Indicators Key Indicators FY24 Guidance GLP Growth % 24.0% - 25.0% NIM % 12.0% - 12.2% Cost-to-Income Ratio % 35% - 36% Credit Cost (Provisions + Write-offs) – 1.6% - 1.8% % of Avg. On-Book Loan Portfolio (non annualized) Return on Assets % 4.7% - 4.9% Return on Equity
Slide 13: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 13
Slide 14: Q4 FY23: Key Performance Highlights
Q4 FY23: Key Performance Highlights NIM Cost/Income Ratio 12.2% 30.2% PPOP GLP: INR 21,031 Cr INR 503 Cr (+26.7% YoY) Weighted Avg. COB Opex/GLP Ratio (+36.3% YoY) 9.5% 4.5% ROA Capital Adequacy Ratio Total Equity 5.5% 23.6% INR 5,107 Cr PAT: INR 297 Cr (+86.4% YoY) ROE Tier 1 Ratio D/E Ratio 24.0%
Slide 15: Q4 & FY23: P&L Statement
Q4 & FY23: P&L Statement Profit & Loss Statement (INR Cr) Q4 FY23 Q4 FY22 YoY% Q3 FY23 QoQ% FY23 FY22 YoY% Interest Income 964.8 728.5 32.4% 854.8 12.9% 3,327.1 2,567.3 29.6% - Interest on Loans 1 950.1 721.1 31.8% 837.6 13.4% 3,277.4 2,533.0 29.4% - Income from Securitisation 0.1 0.6 - 0.0 - 0.1 0.
Slide 16: Q4 & FY23: Balance Sheet
Q4 & FY23: Balance Sheet Balance Sheet (INR Cr) Q4 FY23 Q4 FY22 YoY% Q3 FY23 QoQ% FY23 FY22 Cash & Other Bank Balances 1,436.4 1,761.4 -18.4% 1,001.2 43.5% 1,436.4 1,761.4 Investments 454.5 0.5 - 438.3 3.7% 454.5 0.5 Loans - (Net of Impairment Loss Allowance) 18,939.8 14,765.3 28.3% 16,402.3 15.5% 1
Slide 17: Understanding the Credit Cost Impact
Q4 & FY23: Understanding the Credit Cost Impact Consolidated Consolidated (INR Cr) Q4 FY23 FY23 Opening ECL - (A) 344.6 533.9 Additions (B) - Provisions as per ECL 57.4 194.2 - Management Overlay on MMFL’s legacy book 13.8 13.8 Reversals (on account of write-off) (C) 68.0 394.1 Closing ECL (D = A+B-
Slide 18: Continued Business Traction with Rural Focus
Q4 FY23: Continued Business Traction with Rural Focus Gross Loan Portfolio (INR Cr) Borrowers (‘000) 26.7% 11.5% 21,031 4,264 17,786 3,939 16,599 16,539 3,824 3,798 3,689 15,615 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 www.creditaccessgrameen.in 18
Slide 19: Consistent Growth in Infrastructure
Q4 FY23: Consistent Growth in Infrastructure Branch Additions Branches States Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Bihar 10 - 19 13 9.2% Chhattisgarh 2 - - - Gujarat 5 1 - 11 1,727 1,786 Jharkhand 5 - - - 1,635 1,681 1,684 Madhya Pradesh 1 - 6 1 Karnataka - - - 3 Kerala - - - 0 Maharashtra 9 - 6 1 Odisha
Slide 20: Robust Quarterly Performance Trend (1/2)
Q4 FY23: Robust Quarterly Performance Trend (1/2) Disbursements (INR Cr) Total Income (INR Cr) 23.8% 1,066 910 7,171 824 814 761 5,792 4,375 4,847 2,146 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Margin Analysis (%) Operating Efficiency (%) 5.1% 5.0% 19.1% 19.6%
Slide 21: Robust Quarterly Performance Trend (2/2)
Q4 FY23: Robust Quarterly Performance Trend (2/2) NII, PPOP, PAT (INR Cr) Asset Quality (%) 3.61% 3.44% 3.01% 690 3.11% 566 2.46% 520 516 2.04% 462 1.78% 503 2.71% 2.17% 2.33% 369 379 1.71% 290 334 1.72% 1.21% 297 1.34% 175 216 0.96% 159 139 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2
Slide 22: Sustainable Operational Efficiency
Q4 FY23: Sustainable Operational Efficiency GLP / Branch (INR Cr) GLP / Loan Officer (INR Cr) 11.8 1.8 10.2 9.8 10.3 1.6 9.3 1.5 1.5 1.5 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Borrowers / Branch Borrowers / Loan Officer 2,339 2,281 2,388 371 2,195 2,256 355 3
Slide 23: Product Range To Meet Diverse Customer Needs
Q4 FY23: Product Range To Meet Diverse Customer Needs GLP - Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Product Mix (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total IGL 15,949 96% 14,937 96% 15,801 96% 17,054 96% 20,090 96% Family Welfare 38 0% 121 1% 1
Slide 24: Well-Diversified Presence Across India
Q4 FY23: Well-Diversified Presence Across India Our Presence as on Mar-23 Branch Network Q4 FY23 % Share Q4 FY22 % Share 14 States & 1 UT Karnataka 311 17.4% 308 18.8% 352 Districts Maharashtra 301 16.9% 285 17.4% 1,786 Branches Uttar Pradesh Tamil Nadu 378 21.2% 382 23.4% 75 Madhya Pradesh 148 8.3%
Slide 25: Well-Diversified Liability Mix
Q4 FY23: Well-Diversified Liability Mix Liability Mix - Institution / Instrument Wise (%) Focus on dynamic liability management Banks - NCD • Focus on long-term funding with strong diversification between domestic 1.2% NBFCs - TL & foreign sources 3.4% • Target to meet funding requirements through f
Slide 26: Stable Liquidity/ ALM Position/ Credit Ratings
Q4 FY23: Stable Liquidity/ ALM Position/ Credit Ratings Static Liquidity / ALM Position For the Month For the Financial Year Debt Diversification Q4 FY23 Particulars (INR Cr) Apr-23 May-23 Jun-23 FY24 FY25 Total Drawdowns 5,840 Opening Cash & Equivalents (A) 1,895.0 1,912.8 2,156.9 2,282.6 3,520.1 8
Slide 27: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 27
Slide 28: 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 29: 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 30: 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 31: Unique Human Capital, Internal Audit & Risk Controls
Unique Human Capital, Internal Audit & Risk Controls Well-Established Operational Structure Multi-Pronged Approach For Risk Management Business Heads Sound Understanding of Rural Market Internal Audit (IA): • ~90% of employees are hired fresh from rural • IA frequency – 6 times in a year at branches
Slide 32: 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 • Upg
Slide 33: 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 34: Strong Parentage & Shareholder Base
Strong Parentage & Shareholder Base Shareholding Pattern – March 2023 Others, 4.37 MF, AIF, Insurance, 12.28 Committed to Micro Finance Business Promoter CreditAccess India B.V. (CAI) specialises in Micro & Small Enterprises Group, 73.68 • FPI, 9.67 financing • Widely held shareholding base: 247 sha
Slide 35: 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 36: 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 37: Key Ratios: Definitions
Key Ratios: Definitions 1. Portfolio Yield = (Interest on loans – processing fees + Income from securitisation)/ Avg. quarterly on-book loans 2. Cost of Borrowings / Weighted Avg. COB = (Borrowing cost – finance lease charges) / Daily average borrowings 3. Marginal COB = (Borrowings availed during t
Slide 38: For Further Queries:
For Further Queries: Nilesh Dalvi SVP & Head Investor Relations Contact No – 9819289131 Email Id – nilesh.dalvi@cagrameen.in Sahib Sharma AGM – Investor Relations Contact No – 7066559383 Email Id – sahib.sharma@cagrameen.in www.creditaccessgrameen.in 38