Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q1 FY19 Earnings Presentation
43 slides from Au Small Finance Bank's earnings presentation, Aug 7, 2018
Slide 1: Investor Presentation Q1FY19
Investor Presentation Q1FY19 A SCHEDULED BANK I FORTUNE INDIA 500 COMPANY Retail Focused I Differentiated I Well Capitalized I Fast Growing I Customer Centric August 7, 2018
Slide 2: Table of Contents
Table of Q1FY19 Performance Summary Contents Retail Assets & Small & Mid Corporate Assets - Snapshot Branch Banking & Treasury - Snapshot About AU Small Finance Bank Summary Financials & Shareholding Pattern 2
Slide 3: Q1FY19 Key Highlights
Q1FY19 Key Highlights 395 Branches1 11 States 28 Offices 292 ATMs 11,535 employees 96 Asset Centers Assets Under Active Loan Disbursements Deposit Accounts Deposit Base2 CASA Ratio3 Management Accounts INR Crore INR Crore INR Crore 17,322 6,46,685 2,885 3,84,024 9,999 10,759 2,85,632 1,490 28% 53,28
Slide 4: Q1FY19 Key Highlights
Q1FY19 Key Highlights Total Net Interest PAT Balance Sheet Size Net worth Income Income INR Crore INR Crore INR Crore INR Crore INR Crore 703 20,942 286 77 62 2,843 416 183 10,973 2,048 Q1FY18 Q1FY19 Q1FY18 Q1FY19 Q1FY18 Q1FY19 30-Jun-17 30-Jun-18 Q1FY18 Q1FY19 Yield on Net Interest Gross Cost of Fu
Slide 5: Temasek Holding’s Investment of INR 1000 Crores
Temasek Holding’s Investment of INR 1000 Crores • INR 1000 crores capital infusion by TEMASEK HOLDINGS PRIVATE LIMITED via their indirect wholly-owned subsidiary Camas Investments Pte. Ltd. • This is LARGEST PRIMARY EQUITY CAPITAL RAISE by AU BANK • Offer Summary: • Equity (30%) and Convertible Warr
Slide 6: Q1FY19 Performance Summary: Advances & Asset Quality
ADVANCES & ASSET QUALITY ▪ Yet another stellar quarter; Gross AUM at INR 17,322 Crore, Up 61% y-o-y ▪ Retail Assets continue to dominate; Forming 82% of Gross AUM at INR 14,248 Crore, Up 53% y-o-y Q1FY19 ▪ Q1FY19 Total Disbursements nearly DOUBLED at 94% y-o-y growth at INR 2,885 Crore; despite Q1 P
Slide 7: Q1FY19 Performance Summary
▪ Deposits to Advances ratio improves by ~600 bps; now stands at ~66% vs. ~60% last quarter ▪ Owning to revision in rates, Cost of Deposits (excluding Certificate of Deposits) increased to 6.94% in Q1FY19 from 6.59% in entire FY18 ▪ Mutual Fund : INR 7.5+ Crore mobilized during the quarter including
Slide 8: Q1FY19 Performance Summary: Digital Banking & Analytics
DIGITAL BANKING & ANALYTCIS ▪ Launched AU ABHI (Android) – New Age Instant Digital Savings Bank Account; ▪ Launched AU Business – A simple but POWERFUL app for internal lead referrals and fulfillment; Q1FY19 Total Business of 68 Crores with conversion of ~1100 leads Performance ▪ Corporate Internet
Slide 9: Q1FY19 Performance Summary: Financials, Capital Adequacy & Returns
FINANCIAS, CAPITAL ADEQUACY & RETURN RATIOs ▪ Average AUM IRR of 14.5%; Average Cost of Funds of 7.9% ▪ Net Interest Income of INR 286 Crore for Q1FY19; Up 56% over Q1FY18. Q1FY19 ▪ Total Income of INR 703 Crore for Q1FY19; Up 69% over Q1FY18 and 6% over Q4FY18 Performance ▪ Q1FY19 Cost to Income Ra
Slide 10: Consistent Return Ratios
Consistent Return Ratios RoA1 (%) RoE1 (%) 2.4% 14.8% 13.7% 12.3% 13.2% 2.0% 2.0% 1.5% Q1FY18 Q4FY18 FY18 Q1FY19 Q1FY18 Q4FY18 FY18 Q1FY19 ROA / ROE – Components NII1 (%) Other Income3 (%) Opex1 (%) 6.5% 3.3% 5.3% 4.8% 7.1% 7.0% 6.6% 2.7% 4.4% 5.8% 2.1% 2.1% Q1FY18 Q4FY18 FY18 Q1FY19 Q1FY18 Q4FY18 F
Slide 11: Stable Asset Quality
Stable Asset Quality Movement of Gross NPA Q1FY19 Q4FY18 (All Figures in INR Crore) Unaudited Audited Opening Gross NPA 270 286 Additions during the period 99 48 Reductions during the period 35 64 Gross NPA (closing) 334 270 Gross NPA (%age) 2.2% 2.0% Gross NPA Net NPA Provision Coverage Ratio 3.0%
Slide 12: Well Capitalized
Well Capitalized (INR Crore) Jun-18 Mar-18 Jun-17 Unaudited Audited Unaudited Total Risk Weighted Assets 13,212 11,833 9,985 Tier I Capital 2,653 2,179 1,885 Tier II Capital 85 105 98 Total Capital 2,738 2,285 1,983 CRAR 20.7% 19.3% 19.9% Tier I CRAR 20.1% 18.4% 18.9% Tier II CRAR 0.6% 0.9% 1.0% Not
Slide 13: Key Performance Matrix
Key Performance Matrix Branches1 Disbursements Employees INR Crore 97 96 119 11,151 11,535 10,825 377 395 9,055 284 4,205 1,490 2,885 30-Jun-17 31-Mar-18 30-Jun-18 30-Jun-17 31-Mar-18 30-Jun-18 Q1FY18 Q4FY18 FY18 Q1FY19 Asset Centers Asset Centers Bank Branches Bank Branches Active Loan Accounts Gro
Slide 14: Profit & Loss Statement
Profit & Loss Statement (All Figures in INR Crore) Q1FY19 Q1FY18 Y-o-Y Q4FY18 FY18 Unaudited Unaudited Audited Audited Income Interest Earned 600 361 66% 532 1,767 Interest Expended 314 178 77% 245 827 Net Interest Income 286 183 56% 287 940 1 Other Income 103 55 87% 134 388 Total Net Income 389 238
Slide 15: Balance Sheet
Balance Sheet (All Figures in INR Crore) 30-Jun-18 30-Jun-17 Y-o-Y 31-Mar-18 Unaudited Unaudited Audited Liabilities Capital 290 284 2% 286 Money received against Share Warrants 175 - N.A. - Employees stock options outstanding 28 - N.A. 17 Reserves and Surplus 2,350 1,764 33% 1,978 Deposits 9,999 81
Slide 16: Way Forward
Way Forward Cost Optimization, Customer Centric Offering, Digital Banking Retail Assets, Small & Mid Corporate Assets Diversify Products Mix; Offering wider products bouquet • Continue to be Retail Assets led bank • Scale up the recently launched Home loans product alongside other retail assets viz.
Slide 17: Retail Assets & Small & Mid-Corporate Assets - Snapshot
Q1FY19 Performance Summary Retail Assets & Small & Mid-Corporate Assets - Snapshot Branch Banking & Treasury - Snapshot About AU Small Finance Bank Summary Financials & Shareholding Pattern 17
Slide 18: Retail and Small & Mid-Corporate Assets Snapshot – I
Retail and Small & Mid-Corporate Assets Snapshot – I Retail Assets1 comprise ~82% of Gross AUM of INR Retail Assets continues to exhibit strong growth 17,322 Crore INR Crore 17,322 16,038 82.3% Retail Assets AUM Growth Q-o-Q Y-o-Y 10,759 14,248 Total 61.0% 8.0% 13,265 Small & Mid- 9,283 Retail Bank
Slide 19: Retail and Small & Mid-Corporate Assets Snapshot – II
Retail and Small & Mid-Corporate Assets Snapshot – II Consistent growth in Disbursements INR Crore 10,825 Disbursement • Continued to witness strong growth Growth Y-o-Y Q-o-Q 7,905 on Bank Platform; Total 93.7% -31.4% • Qtrly Disbursements almost doubled 4,205 2,885 Retail 89.6% -38.2% in Q1 1,490 3
Slide 20: Retail Assets Snapshot – I
Retail Assets Snapshot – I Retail Assets AUM Break-up AUM (INR Cr) Jun-18 Growth (%) • Robust 61% Y-o-Y growth in Retail Retail Assets 30-Jun-17 31-Mar-18 30-Jun-18 Y-o-Y Q-o-Q AUM led by growth in SBL-MSME Wheels 5,318 7,133 7,710 45.0% 8.1% followed by Wheels SBL – MSME 3,284 4,977 5,464 66.4% 9.8
Slide 21: Retail Assets Snapshot - II
Retail Assets Snapshot - II Strong Disbursement Momentum maintained in Retail Assets Disbursements (INR Cr) Q1FY19 Growth (%) • Disbursement nearly doubled over Retail Assets Q1FY18 Q4FY18 Q1FY19 Y-o-Y Q-o-Q Q1FY18 Wheels 677 1,626 1,358 100.5% -16.5% SBL – MSME 419 1,060 715 70.6% -32.5% • Strong g
Slide 22: Diversified Wheels Book
Diversified Wheels Book Wheels AUM break up – New vs Old Wheels AUM break up – Vehicle types 2% 0% 2% 2% Cars Multi-Utility Vehicle 27% 2% 4% Small Commercial 3% Vehcile 28% 6% Sports Utility Vehicle Light Commercial Vehcile 8% Tractor Heavy Commercial Vehcile 71% Three Wheeler 21% 23% Construction
Slide 23: Scaling Up New Retail Foot Prints
Scaling Up New Retail Foot Prints Agriculture SME Loan Agri Enterprises Agri Infrastructure Rolled Out Disbursements Agri Projects in 6 States INR 42 Crore Consumer Durable Online sourcing through Tech. Partner Vijay Sales, Croma, Flipkart, Amazon, Samsung, Godrej etc. Online/ Paperless Disbursement
Slide 24: Small & Mid-Corporate Assets Snapshot
Small & Mid-Corporate Assets Snapshot Small & Mid-Corporate Assets AUM Break-up Good Momentum in Business Banking INR Crore 3,074 2,773 AUM Growth Y-o-Y Q-o-Q 25% Small & Mid-Corporate 108.4% 10.9% 1,815 1,525 1,475 NBFC 198.7% 19.3% Gross AUM 68.1% 46.4% 608 59% Real Estate Group 12.3% -3.3% 779 75
Slide 25: Branch Banking & Treasury - Snapshot
Q1FY19 Performance Summary Retail Assets & Small & Mid-Corporate Assets - Snapshot Branch Banking & Treasury - Snapshot About AU Small Finance Bank Summary Financials & Shareholding Pattern 25
Slide 26: Liabilities - Branch Banking - Snapshot
Liabilities - Branch Banking - Snapshot Growing Deposit Franchise (value), CASA Ratio of 28% 48% of the Term Growth over Deposits are non- Q4 FY18 Current Account Saving Account Term Deposits* Total callable CASA RATIO (%) CASA RATIO (%) CASA RATIO (%) 8,071 6,743 28% 5,841 32% 20% 4,609 61% 1,742 1
Slide 27: Diversified Liabilities Portfolio
Diversified Liabilities Portfolio Increasing proportion of Deposits further diversifying the funding profile Funding Source 30-Jun-17 30-Sep-17 31-Dec-17 31-Mar-18 30-Jun-18 Deposits + Borrowings (INR Crore) 8,208 9,404 11,041 15,562 16,874 Deposits 9.9% 21.0% 33.7% 50.9% 59.3% Refinance from FIs 15
Slide 28: Declining Cost of Funds & Treasury Updates
Declining Cost of Funds & Treasury Updates Incremental Funds1 being raised at relatively lower cost Improving cost of funds2 INR Crore 20,000 Chart Title 7.1% 7.25% 7.06% 9.0% Avg. Cost of funds 15,000 6.06% 11,568 8.3% 5.06% 8.6% 10,000 4.06% 8.0% 4,251 3.06% 7.9% 5,000 2.06% 0 1.06% FY18 Q1FY19 Q1
Slide 29: About AU Small Finance Bank
Q1FY19 Summary Performance Retail Assets & Small & Mid-Corporate - Snapshot Branch Banking & Treasury - Snapshot About AU Small Finance Bank Summary Financials & Shareholding Pattern 29
Slide 30: AU BANK – tapping the unreached and unbanked segments
AU BANK – tapping the unreached and unbanked segments Overview Focused on Retail Financing with Diversified Portfolio • AU SMALL FINANCE BANK (“AU BANK” or “Company”) is a scheduled commercial bank Gross AUM of INR 17,322 crore which successfully transited from an Asset Financing NBFC to a SFB; star
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: AU Journey - natural progression to Bank
AU Journey - natural progression to Bank FY96 to FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Q1FY19 INR 1000 Crore Fund Manager Investment by Channel Partner Temasek Holdings NBFC – Asset Finance Company Small Finance Bank CA, SA, Deposits, Lockers, Payments & Onl
Slide 33: Product Offerings
Diversified Bouquet of Products with focus on Retail Small & Mid-Corporate – Existing Retail Assets – Existing Products Products Secured Business Loans - Secured Business Loans – Parameter Wheels (Vehicle Loans) NBFC Real Estate Group MSME SME Commenced • 1996 • 2007 • 2012 • 2012 • 2012 • Traders,
Slide 34: Well entrenched contiguous distribution franchise addressing underserved customer segments
Well entrenched contiguous distribution franchise addressing underserved customer segments 395 Branches, 11,535 384,024 Active Loan 646,685 Deposit 11 States 292 ATMs 28% CASA Ratio1 96 Asset Centers employees Accounts Accounts Deep Penetration into Core States and Expansion into other States Target
Slide 35: Customer Centricity
Customer Centricity Customer Centricity at the core of strong Asset franchisee Deep branch penetration & Hire Local Relationships with dealers & Call Centers Banking Ombudsman Personnel manufacturers • Ensures being close to the • Establish relationships and • 38 Seater call center • 65 Banking ombu
Slide 36: Experienced Board of Directors
Experienced Board of Directors Board of Directors Mr. Mannil Venugopalan Ms. Jyoti Ishwar Chandra Mr. Raj Vikash Verma Mr. Krishan Kant Rathi Independent Director Chairman and Narang Independent Director 35+ years of experience Independent Director Independent Director 29+ years of experience Master
Slide 37: Summary Financials & Shareholding Pattern
Q3 / 9M FY 18 Summary Financial Performance Retail Assets & Small & Mid-Corporate Assets - Snapshot Branch Banking & Treasury - Snapshot About AU Small Finance Bank Summary Financials & Shareholding pattern 37
Slide 38: Robust Operating and Financial Performance (1/2)
Robust Operating and Financial Performance (1/2) Total Revenue and PAT Yields2 and Cost of Funds3 INR Crore NII + OI 4 7.8% 8.1% 9.1% 9.0% 9.4% 9.3% 7.8% 2155 17.9% 17.7% 17.5% 17.1% 16.5% 14.7% 14.5% 1419 11.6% 11.2% 10.6% 1015 10.0% 9.6% 8.4% 738 703 619 7.9% 446 212 305 292 80 92 140 77 1 1 FY13
Slide 39: Robust Operating and Financial Performance (2/2)
Robust Operating and Financial Performance (2/2) Growth Trajectory Networth and Capital Infusion # of active INR crore loan 146,277 175,531 189,175 225,713 280,349 3,58,080 384,024 accounts Infusion - 86 39 - 172 3 475 17,322 2,843 16,038 Gross AUM 2,281 10,734 Net Worth 1,988 (INR Crore) 8,221 (INR
Slide 40: Marquee Shareholders Base – As on Jun 30, 2018
Marquee Shareholders Base – As on Jun 30, 2018 Shareholding Pattern Key Non-Promoter Shareholders (Holding above 1%) Holding Redwood Investment (Warburg Pincus) 14.98% Other - Domestic, Foreign International Finance Corporation 7.57% Individual - 4.44% Institutions Temasek Holdings 4.81% Domestic, (
Slide 41: 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 42: Thank You
THANK YOU Contact for Investor queries: Sunil Parnami / Hemant Sethia AU Small Finance Bank Ltd Tel: +91 141 666 0666 / +91 22 6249 0607 / +91 22 6249 0614 Email: investorrelations@aubank.in 42
Slide 43: 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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