Sbfc Finance Limited · NSE:SBFC
Sbfc Finance — Q1 FY2024 Earnings Presentation
36 slides from Sbfc Finance's earnings presentation, Aug 29, 2023
Slide 1: Cover letter to stock exchanges
August 29, 2023 To To National Stock Exchange of India Limited, BSE Limited Exchange Plaza, Plot No. C/1, G Block, Phiroze Jeejeebhoy Towers, Bandra-Kurla Complex, Bandra (East), 21st Floor, Dalal Street, Mumbai – 400051 Mumbai – 400001 NSE Symbol: SBFC BSE Scrip Code: 543959 Dear Sir/ Madam, Sub: I
Slide 2: Investor Presentation Q1 FY 2024
Investor Presentation Q1 FY 2024
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (‘Presentation”), which have been prepared by SBFC Finance Limited (the "Company"), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities,
Slide 4: SBFC – At a glance
SBFC – At a glance Size and Growth Distribution Granular Book Asset Quality Liability Profile Profitability 5,327 % AUM 162 97.4% 2.54% 1,666 47 YoY 47% | QoQ 8% # Branches % Secured GNPA Tangible Net worth Q1 FY24 PAT 4,328 3,136 9.84* | 0.85* % 3.72% Secured MSME AUM 1.55% CRAR 33.6% Employees Ave
Slide 5: About the company
About the company Management and Shareholder Business Credit & Risk Financials ESG 4
Slide 6: Executive Summary
Executive Summary RBI registered, systemically important, non-deposit taking non-banking finance 162 branches company (“NBFC-ND-SI”) 120 Cities 16 States 2 UTs Team: Experienced, cycle-tested, professional management with strong corporate governance backed by marquee investors Focused Segment: Offer
Slide 7: SBFC Focus Segment – customers borrowing ₹0.05 to ₹0.3 cr
SBFC Focus Segment – customers borrowing ₹0.05 to ₹0.3 cr Large segment within MSME of ₹2.5 lakh cr and growing at CAGR 24% Segment Market Size1 (₹ tn) CAGR2 (%) % of Market >₹1 cr 3.6 13.1% 42% ₹0.5 – 1 cr 1.1 17.0% 13% ₹0.3 – 0.5 cr 0.9 20.4% 10% Focus ₹0.05– 0.3 cr 2.5 23.7% 30% Segment <₹0.05 cr
Slide 8: Our Journey
Our Journey 1,00,000 customers 150 Branches 150 cr PAT Credit rating upgraded to ‘A +’ 5327 50,000 customers 4943 100 AUM of INR Branches Investment by 1000cr Clermont and 3192 Arpwood group 2221 1648 1156 778 2018 2019 2020 2021 2022 2023 2024 (Q1) All figures in Rs. crore. AUM 7
Slide 9: Management and Shareholder
About the company Management and Shareholder Business Credit & Risk Financials ESG 8
Slide 10: Management
Management Experienced, cycle-tested, professional management Aseem Dhru Mahesh Dayani Narayan Barasia Pankaj Poddar MD & CEO Chief Business Officer Chief Financial Officer Chief Risk Officer Sanket Agrawal Sumeet Ghai Ganesh Vaidya VM Maneesh Sai Prashant Menon Chief Strategy Officer Chief Human Re
Slide 11: Board of Directors
Board of Directors Strong corporate governance backed by long term investors Neeraj Swaroop Surekha Marandi SGX Rajesh Agrawal Independent Jt. Managing Director, Ex Executive Director, Ex-CEO Ajanta Pharma RBI Standard Chartered John Mescall Jonathan Tatur Arjun Sakhuja Managing Director Investments
Slide 12: Shareholding
Shareholding Category of Shareholders % Share Shareholding Pattern Promoters 10.25% Clermont Group 58.52% 10.61% 2.61% Arpwood Group 5.50% 64.02% Other Major Shareholders 12.51% SBI Mutual Fund 7.32% Amansa 4.16% Malabar Funds 4.16% Promoters Mutual Funds, AIF, Insurance, Banks Steadview Capital 1.8
Slide 13: Business
About the company Management and Shareholder Business Credit & Risk Financials ESG 12
Slide 14: Executive Summary - Q1 FY24
Executive Summary - Q1 FY24 Asset Under Management Disbursement1 Branches 5327 655 162 47% 8% 32% 4% +27 +10 Gross NPA Yield Opex 2.54% 16.56% 5.42% -32bps -3bps +83bps +5bps -67bps -17bps PAT RoAAUM RoATE 47 3.7% 12.0% 46% 10% -11bps +2bps +156bps +15bps 1Secured MSME All figures are in ₹cr 13 YoY
Slide 15: Business Momentum
Simplify graphic Business Momentum Delivering rapid growth in recent years YoY : 47% 5327 QoQ : 8% 50 3% 16% CAGR: 49% 40 4943 50 4943 3% 18% 30 3% 18% 40 3192 3628 7% 6% 81% 30 20 2221 20% 20% 20 10% 79% 25% 10 79% 10 73% 74% 65% - - Mar-21 Mar-22 Mar-23 Q1Mar-21 FY 23 Q4 FY 23 Mar-22 Q1 FY 24 Mar-
Slide 16: Business Momentum – Secured MSME
Business Momentum – Secured MSME Growth in both Volume & Value AUM Disbursement Value Disbursement Volume YoY: 31% YoY: 32% YoY: 61% QoQ: 7% QoQ: 4% QoQ: 10% 6230 6655 4328 632 655 3920 5076 496 2695 Q1Q1 FYFY 22-23 23 Q4Q4FYFY22-23 23 Q1 Q1FYFY23-24 24 Q1 FY 23 Q4 FY 23 Q1 FY 24 Q1 FY 23 Q4 FY 23 Q
Slide 17: Business Momentum – Co-origination
Business Momentum Co-origination – Validates our profitable origination Steady rise in co-origination disbursement… …leading to rise in co-origination AUM over the years %1 17% 22% 18% 10% 16% 16% Co-origination AUM (₹ crs) Co-origination Disbursement (₹crs) 699 137 613 116 83 276 Q1 FY23 Q4 FY23 Q1
Slide 18: Business Momentum – No concentration risk
Business Momentum No concentration risk & well distributed growth Present in 16 states, 2 UTs covering 120 cities via 162 branches Driven by steady rise in AUM per branch # Branches 31 43 88 162 <12 months >12 & <36 months >36 months 2 1 2 8 45 4 38 39 40 22 35 7 11 35 30 31 7 30 96 4 25 12 20 18 15
Slide 19: Credit & Risk
About the company Management and Shareholder Business Credit & Risk Financials ESG 18
Slide 20: Credit Underwriting
Credit Underwriting Tailored to service underserved, underbanked informal customers Most small businesses in India SBFC's business model, backed by experience in this segment have challenges • Credit officer spends time to understand income & cash flow (documented + non-documented) at family Partial
Slide 21: Credit Underwriting Key Steps
Rework graphic Rework icons Credit Underwriting Robust end-to-end credit process Sourcing Appraisal Credit Disbursement Account Management Personal Discussion Sanction Letter NACH, PDC & EMI 100% in house loan sourcing KYC Verification & DeDupe Presentation Analysis of Financials, CIBIL Check Collec
Slide 22: Credit Underwriting – Quality borrowers
Credit Underwriting Quality borrowers with credit score above 700 Over 83% AUM from customers with CIBIL >7001,2 Granular loan book with high quality collateral1 0/-1 8.0% 7.4% 7.9% 7.8% 4.3% 2.1% 1.8% <650 6.8% 8.5% 7.7% 7.5% 94.01% 42.39% 9.9% AUM secured by self occupied > 650 & < 700 LTV residen
Slide 23: Credit Indicators
Credit Indicators Gross NPA % 1 Net NPA % 2 1.78% 2.87% 2.57% PCR 2.54% 39.56% 1.58% 1.55% Q1 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q4 FY23 Q1 FY24 1+ DPD % 3 Collections Efficiency 4 6.69% 97.21% 97.17% 97.28% 5.11% 5.51% Q1 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q4 FY23 Q1 FY24 Note: 1. Gross NPA% (Stage 3%) as per
Slide 24: ECL Provisions Summary
ECL Provisions Summary As on June 30, 2023 Stage 1 Stage 2 Stage 3 Total Gross Loans Outstanding 4,499 180 122 4,801 ECL Provision 28 12 48 88 Net Loans Outstanding 4,471 168 74 4,713 ECL Provision % 0.63% 6.48% 39.56% 1.84% As on March 31, 2023 Stage 1 Stage 2 Stage 3 Total Gross Loans Outstanding
Slide 25: Collections Approach
Rework icons Collections Approach In-house, on-ground collections teams – 92% collected digitally On-ground Teams Scalable Structure Adaptable collection strategy as per loan stage Loan Stage Branch staff Branch area- from local area + limited radius Normal • Call center autodial quick attention to
Slide 26: Financials
About the company Management and Shareholder Business Credit & Risk Financials ESG 25
Slide 27: Financial Performance
Financial Performance Trends in KPIs AUM Yield Spread (₹cr) 5327 17.10%1 7.63%1 4943 16.50% 7.49% 7.56% 3628 16.56% 7.09% 15.72% Q1 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q4 FY23 Q1 FY24 Q1 FY23 Q4 FY23 Q1 FY24 Opex Gross NPA RoAAUM 10.4%* 11.8%* 12.0%* RoATE* 6.09% 2.87% 3.83% 5.58% 2.57% 2.54% 3.72% 5.42% 3
Slide 28: Sources of Borrowing
Sources of Borrowing Diversified Borrowing Mix Long Term Credit rating A+ (Stable) 1.7% 1.1% 1.6% 1.5% 9.5% 0.7% 30.5% 8.4% Lenders to the Company 61.6% 43.1% 28.6% Public Sector Banks 3.1% 8.6% NCD Private Sector Bank NCD Private Sector Bank Private Sector Financial Institutions Public Sector Bank
Slide 29: ALM – June 2023
ALM – June 2023 Surplus 609 589 Upto 3 months 1198 920 761 Upto 6 months 1681 1524 1086 Upto 1 Year 2610 3514 550 Upto 3 Years 4064 4125 Upto 5 Years 1770 5895 6280 5+ Years 6280 Liablilities Asset All figures in Rs. Cr. 28
Slide 30: Summary Financial Statements – Profit & Loss Account
Summary Financial Statements – Profit & Loss Account Q-o-Q Y-o-Y Y-o-Y Particulars Q1FY24 Q4FY23 Q1FY23 FY 23 FY 22 Growth Growth Growth Interest Income on Loans 187.91 173.1 124.6 8.5% 50.8% 595.3 382.5 55.6% Interest Income other than on Loans 16.0 16.0 14.9 58.9 90.6 Fee & Other Income 26.0 19.6
Slide 31: ROE Tree
ROE Tree Ratios Q1FY24 Q4FY23 Q1FY23 FY 23 FY 22 Interest Income on Loans/ Average Loan Book 16.6%1 16.5% 15.7% 16.1% 15.5% Fee & Other Income/ Average AUM 2.1% 1.7% 2.5% 2.2% 2.2% Finance costs/ Average Borrowings 9.5% 9.0% 8.3% 8.7% 8.1% Spread 7.1%1 7.6% 7.5% 7.5% 7.5% Net Interest Margin/ Averag
Slide 32: Balance Sheet
Balance Sheet Particulars Q1FY24 Q4FY23 Q1FY23 FY 23 FY 22 Assets Cash and Bank Balances 440 400 278 400 335 Receivables 18 11 10 11 8 Loan Assets 4,713 4,415 3,366 4,415 2,983 Investments 623 607 665 607 848 Other financial assets 4 4 5 4 4 Current & Deferred tax assets (Net) - - 34 - 34 Property,
Slide 33: ESG
About the company Management and Shareholder Business Credit & Risk Financials ESG 32
Slide 34: Governance
Governance Strong ESG framework, serving the underserved in tier 2 & 3 locations Focus on financial inclusion Governance framework Underserved 90.4% ~8% 3 Independent 4 Nominee 1 Woman Women Secured MSME Directors Directors Director Customers borrowers1 borrowers new to formal lending Board committe
Slide 35: CSR towards Skill development and Education
CSR towards Skill development In our effort to support the Skill India mission, we initiated SBFC Gurukul. The program is run under the guidelines of National Apprenticeship Promotion Scheme and National Apprentice Training Scheme , where we groom and train fresh undergraduates and graduates in skil
Slide 36: Thank You!
THANK YOU! 35 PRIVATE & CONFIDENTIAL