Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q3 FY2022 Earnings Presentation
50 slides from Au Small Finance Bank's earnings presentation, Jan 28, 2022
Slide 1: Stock exchange cover letter for investor presentation
AU , SMALL FINANCE ~ BANK A SCHEDULED COMMERCIAL BANK Ref. No.: AUSFB/SEC/2021-22/317 Date: 28 th January 2022 To, National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai 400051, Mumbai 40000
Slide 2: Investor Presentation Q3'FY22
AU aL BADLAAV we HUMSE HAI INVESTOR PRESENTATION Q3’FY22 Tech-led | Retail Focused | Customer Centric | Well Capitalized | Inclusive
Slide 3: Agenda
Management Update Asset Quality Operating & Financial Highlights Tech Update Branch Banking Update Other Key Updates
Slide 4: 1. Management Update
Appointment of Shri H.R. Khan as an 1. Management Update Independent Director 10 Strategic Business Units formalized CRISIL upgraded credit rating outlook to ‘Positive’ from ‘Stable’ Added 3,018 employees YTD
Slide 5: Executive summary
Executive summary OPERATING ENVIRONMENT ▪ Q3’FY22 saw a near-normal operating environment with improvement across all key vectors aided by a strong festive season and resilient customer sentiment ▪ Based on early impressions, impact of Omicron variant seems limited, and we remain optimistic with a c
Slide 6: Executive summary
Executive summary ➢ Assets ▪ Q3’FY22 disbursement at ₹ 8,152 Cr, our highest ever quarterly achievement – growth of 59% QoQ and 33% YoY; AUM grew 26% YoY to ₹ 42,023 Cr ▪ Asset quality improved further – GNPA down ~57 bp QoQ to 2.6% from 3.2%; Net NPA reduced to 1.3% from 1.7% QoQ; PCR at 51% versus
Slide 7: We continue to witness positive trends for our digital bank
We continue to witness positive trends for our digital bank Registrations 9.6 Lacs 2.2 Lacs AU 0101 registrations. 39% Non AU customer registrations on AU 0101 app Acquisition ~65k 1 Lac+ 3 Lacs+ Savings account opened Credit cards issued UPI QRs installed digitally through AU 0101 Engagement 38% 4.
Slide 8: Our Purpose: Empowering India
Our Purpose : Empowering India 7
Slide 9: Building a robust foundation to execute our strategy
Building a robust foundation to execute our strategy ▪ 10 Business Groups (SBU structures) formalized to drive future growth ▪ Each BU to have In the upcoming months, the Bank will provide an ✓ Its own vertical structure supported by shared horizontals like HR, Finance, opportunity for investors/ana
Slide 10: Working towards a pan-India presence
Working towards a pan-India presence 880 15 States Touchpoints and 2 UTs Launched 69 New Touchpoints in Q3 Jammu & Kashmir Himachal Pradesh Chandigarh Punjab AU Asset Haryana Center Delhi UP 397 Branches 205 Asset Centres Rajasthan MP Chhattisgarh West Bengal Gujarat 261 Unbanked Rural Centres AU BA
Slide 11: Contiguous & growing distribution franchise
Contiguous & growing distribution franchise 15 States and 2 UTs 880 Touchpoints 222 Districts 690 Locations 496 ATMs Break up of Touchpoints Sr. Added during 31-Dec-21 States & UTs 30-Sep-21 No. Q3’FY22 1 Rajasthan 330 18 348 2 Gujarat 115 16 131 3 Madhya Pradesh 114 3 117 4 Maharashtra 79 8 87 25%
Slide 12: Garnering deposits from Urban markets and disbursing in Core markets
Garnering deposits from Urban markets and disbursing in Core markets Liabilities Break up Assets Break up 24% (27%) 35% (35%) Urban Core 65% 76% (65%) (73%) 1% 2% 2% 1% Rajasthan 2% 1% 3% Maharashtra 4% Delhi NCR 17% 7% 32% Punjab Haryana 41% 7% 4% Gujarat Madhya Pradesh 9% 10% Himachal Pradesh Utta
Slide 13: 2. Operating & Financial Highlights
2. Operating & Financial Highlights Disbursements up 33% YoY in Q3’FY22 Profit at ₹ 302 Crore for Q3’FY22 COF at 5.9% Q3’FY22 ROA of 2.2% and ROE of 17.4% for Q3’FY22
Slide 14: Q3'FY22 Key highlights
Q3’FY22 Key highlights ₹ 8,152 Cr Disbursements ▪ Disbursements (fund-based) increased significantly in Q3’FY22 as operating +33% YoY environment normalised; up 33% YoY ₹ 42,023 Cr ▪ Non-fund disbursements for Q3'FY22 were up 54% YoY at ₹ 627 Crore as compared to AUM +26% YoY ₹ 406 Crore in the same
Slide 15: Q3'FY22 Key highlights
Q3’FY22 Key highlights 222 Districts Touchpoints Customers Employees 880 23.7 lac 25,502 Vs. Vs. Vs. 728 18.8 lac 18,992 (31-Dec-20) (31-Dec-20) (31-Dec-20) Total B/S Assets Disbursements1 Loan AUM Deposits CASA Ratioc ₹ Crore 26% 58,645 33% 8,152 26% 49% 44,278 39% 6,115 42,023 46,605 Vs. 33,222 29
Slide 16: Q3'FY22 Key financial highlights
Q3’FY22 Key financial highlights Net Interest Income Total Income PAT Shareholders Funds ₹ Crore 820 30% 32% 7,127 21% 1,772 68% 633 302 5,403 1,467 180 31-Dec-20 31-Dec-21 31-Dec-20 31-Dec-21 31-Dec-20 31-Dec-21 31-Dec-20 31-Dec-21 Yieldd on AUM Cost of Funds Net Interest Margin ROA ROE Vs. Vs. Vs.
Slide 17: 9M'FY22 Key financial highlights
9M’FY22 Key financial highlights Net Interest Income Total Income PAT Shareholders Funds ₹ Crore 34% 32% 7,127 18% 2,298 42% 784 4,937 5,403 1,710 4,180 554 31-Dec-20 31-Dec-21 31-Dec-20 31-Dec-21 31-Dec-20 31-Dec-21 31-Dec-20 31-Dec-21 Yieldd on AUM Cost of Funds Net Interest Margin ROA ROE Vs. Vs.
Slide 18: Stable spreads despite high liquidity
Stable spreads despite high liquidity Incremental Spreads AUM Spreads 16.0% 14.3% 16.0% 13.8% 13.7% 13.9% 14.0% 14.0% 12.9% 12.7% 12.0% 12.0% 10.0% 10.0% 7.6% 7.8% 7.8% 8.0% 7.6% 7.4% 8.0% 8.0% 6.0% 6.0% 6.7% 6.1% 5.8% 4.0% 5.9% 4.0% 5.3% 5.3% 2.0% 2.0% 0.0% 0.0% 31 Dec'20 30 Sep'21 31 Dec'21 31 Dec
Slide 19: Profit & Loss statement
Profit & Loss statement (All Figures in ₹ Crore) 9M'FY22 9M'FY21 Y-o-Y 31-Dec-21 31-Dec-20 Y-o-Y 30-Sep-21 Q-o-Q Income Interest Earned 4,255 3,658 16% 1,496 1,261 19% 1,405 7% Interest Expended 1,957 1,948 0% 676 628 8% 652 4% Net Interest Income 2,298 1,710 34% 820 633 30% 753 9% ▪ NII growth at 3
Slide 20: Balance sheet
Balance sheet (All Figures in ₹ Crore) 31-Dec-21 31-Dec-20 Y-o-Y 30-Sep-21 Q-o-Q Liabilities Shareholders Fund 7,127 5,403 32% 6,781 5% ▪ Shareholders’ fund increased by 32% YoY and Deposits 44,278 29,708 49% 39,034 13% 5% QoQ Borrowings 4,569 9,171 -50% 4,968 -8% Other Liabilities and ▪ Deposits at
Slide 21: Other income
Other income (All Figures in ₹ Crore) 9M'FY22 9M'FY21 Y-o-Y 31-Dec-21 31-Dec-20 Y-o-Y 30-Sep-21 Q-o-Q Loan Assets Processing & Other Fees 264 174 52% 141 103 37% 94 50% General Banking, Cross Sell & Deposits related fees 108 74 45% 40 32 26% 36 12% PSLC Fees 144 25 487% 77 8 840% 49 56% Miscellaneou
Slide 22: Operating expense movement
Operating expense movement Balance ₹ Crore # of sheet growth Employees +26% YoY +34% YoY 157 1,647 160 150 80 18% New Business initiatives 1,100 - Cards, QR, VB 49% Distribution expansion Business as usual (BAU) expenses 33% Brand building Opex - 9MFY'21 Structural Capacity building Business growth
Slide 23: Profitability trends
Profitability trends ROA (%) ROE (%) 1.9% 15.1% 15.6% 1.7% 9M'FY21 9M'FY22 9M'FY21 9M'FY22 ROA Components NII (%) Other Income(%) 5.1% 5.6% 1.6% 1.7% 9M'FY21 9M'FY22 9M'FY21 9M'FY22 Opex (%) Cost to Income Ratio (%) Provision & Contingencies (%) # 0.4% # 49.3 55.3 COVID-19 related Provisions 3.3% 4.
Slide 24: 3. Branch Banking Update
3. Branch Banking Update Deposits up 49% YoY to ₹ 44,278 Cr. Retail deposits mix at 70% CASA further improved to 39% 36 New liability Branches added in Q3’FY22
Slide 25: Scale low cost, retail-focussed sustainable liability franchise
Scale low cost, retail-focussed sustainable liability franchise Key turning points Core Principles of our Deposit Strategy Deposit as a % Retail Depositsf of external as a % of total Communication & Engagement liabilities deposits Automated Customer Life Cycle Mgmt. Virtual RMs, Newsletters Apr’17 (
Slide 26: Branch banking - Snapshot
Branch banking - Snapshot Growing Deposit Franchise Average Monthly Balance ₹ Crore 56% 16% 41,971 43,946 37,164 1,406 37,951 1,784 1,268 1,600 14,075 15,595 27,810 9,772 28,203 10,228 1,011 5,087 1,254 5,191 26,123 26,566 26,123 26,566 21,758 21,758 31-Dec-20 30-Sep-21 31-Dec-21 31-Dec-20 30-Sep-21
Slide 27: 4. Asset Quality
4. Asset Quality GNPA declined to 2.6% from 3.2% QoQ PCR increased to 51% from 49% QoQ Contingency Provision intact at 300 Cr. Collection Efficiency for Q3'FY22 is 106%
Slide 28: Asset quality
Asset quality ▪ GNPA reduced sequentially by ₹ 94 Cr to ₹ 1,058 Cr (2.6%) AUM Gross Gross Disbursements All figures in ₹ Cr AUM from ₹ 1,151 Cr (3.2%) Yield Advances NPA (Q3’FY22) ▪ Standard Restructured accounts stood at 3.1% of gross Wheels 15,525 14.3% 14,441 488 3,045 advances. As on 31st Dec’21
Slide 29: Credit cost overview
Credit cost overview Credit Cost - Net Impact on P&L Q3’FY22 Q3’FY21 Q2’FY22 • As we had communicated earlier, basis on- (All Figures in ₹ Crore) ground feedback on accounts with low Repossession Loss 34 7 43 visibility of recoverability, wherein all POS Loss 8 4 8 collection efforts have been exhau
Slide 30: Overview of provisions
Overview of provisions Dec'21 Sep'21 Particulars No. of No. of Loans* Provisions* Coverage Loans* Provisions* Coverage Accounts Accounts GNPA 46,668 1,058 537 51% 50,147 1,151 560 49% Covid related Restructuring (Standard) 20,478 1,263 205 16% 21,284 1,302 213 16% Contingency Provisions 300 300 Prov
Slide 31: Asset quality has been resilient throughout our growth journey
Asset quality has been resilient throughout our growth journey 90+ dpd % Collection efficiencies 4.2% 4.1% 99% 98% 99% 97% 3.8% 3.6% 88% 89% 89% 2.6% 2.4% 2.5% 54% 1.9% Global Financial Oil price increase Demonetization Covid Pandemic Global Financial Oil price increase Demonetization Covid Pandemic
Slide 32: 5. Tech Update
5. Tech Update 1 lac+ Credit cards issued 3 lac+ UPI QR installed 38% increase in MAU 97% Financials transactions executed digitally
Slide 33: Five pillars of our strategy to build a tech led bank
Five pillars of our strategy to build a tech led bank ▪ Increasing digital offerings and building compelling 01 g Digital customer experience across touch-points ▪ Focus on digitization and automation of internal 02 Digitization processes to increase productivity ▪ Using analytics to understand and
Slide 34: Driving digital banking adoption
Driving digital banking adoption Awareness Adoption Acquisition Every team at the bank plays a prominent role in driving digital bank adoption Bank Customers Tech Savvy Acquire Convert (TS) TS to DC j Customers Digital Customers k (DC) Technology Branch Banking Customer Service Digital Marketing Ass
Slide 35: Leading to accelerated digital adoption
Leading to accelerated digital adoption Tech Savvy Monthly Active Customer Base Digital Customers Customers Users ~23.7 Lacs 13.1 Lacs 7.8 Lacs* 4.4 Lacs 11% 14% 34% 38% 35% 97% 66% Increase in Financial transactions Non-financial number of transactions** executed digitally transactions completed di
Slide 36: Offering limitless possibilities with our Credit cards
Offering limitless possibilities with our Credit cards 1 Lac+ 7:3 53% 100K Cards issued; Monthly run rate Ratio of ETB to NTB customers Issued to 1st time credit 32% Average limit per card 20k card users 68% ▪ Launched end-to-end digital acquisition journey for NTB customer with VKYC ▪ No cost EMI i
Slide 37: Our tech initiatives being recognized by reputed institutions
Our tech initiatives being recognized by reputed institutions IBS intelligence IBSi NeoChallanger Bank Awards 2021 ▪ Won ‘Digital banking ▪ Won Innovative Best ▪ Won the IBS intelligence ▪ Won ‘Business Initiative of the Year – Practice in Service NeoChallanger Bank Transformation of the India’ awar
Slide 38: 6. Other Key Updates
6. Other Key Updates Sustainability is intrinsic to our business model Increased focus of Sustainability Reporting Constituted Diversity and Inclusion (D&I) Committee Quarterly updates on Financial and Digital Inclusion
Slide 39: Sustainability @ AU
Sustainability @ AU Environment Social Governance Recognize Environment as a Addressing the Occupational, Good governance is the cornerstone to stakeholder Residential, and Social vulnerabilities building trust ▪ Video KYC through our Digital Bank ▪ Went live on Indra Gandhi Urban Credit Card ▪ Welc
Slide 40: Environment
Environment . ▪ Funded solar projects under PM KUSUM scheme, electric vehicles and other green energy projects Through the years, we understood the role of co-existing with nature and the importance of it for our business. Hence, in FY21, we introduced Environment as one of the primary ▪ Electronic
Slide 41: Social
Social ▪ Income generating loans and Social Security Insurance and investment schemes offered to vulnerable and underserved Since the establishment of AU, we have been dedicated to driving a sustainable change in ▪ Agri Loans and assistance for agricultural ancillary activities and services society
Slide 42: Governance
Governance As a bank, we are expected to adapt in an agile manner to the changing market and regulatory expectations. This makes it ▪ Formed a specialized group of Risk, Control, and imperative for us to have a strong yet flexible governance Governance (RCG) to ensure effective internal controls. fr
Slide 43: Financial & Digital Inclusion
Financial & Digital Inclusion Universal Access to Financial Services ➢ 30% of our total touchpoints/branches - 261 are in unbanked rural centres (Tier-VI, population less than 5,000 & Tier-V, population less than 10,000) ➢ Presence in the Special Focus Districts covering 26 Aspirational districts, 1
Slide 44: Reputed recognitions for the Bank
Reputed recognitions for the Bank Certified Great Place To Work for Won Best FI Initiative of the Year at second year in a row ETBFSI Excellence Awards 2021 43
Slide 45: Shareholding pattern – 31st December 2021
Shareholding pattern – 31st December 2021 Shareholding Pattern Sr. Holding on 31st Dec Key Shareholders No. 2021 1 Promoter & Promoter Group 28.3% Foreign (FC,FPI, Promoter & Promoter FII,NRI): 36.8% Group: 28.3% 2 Capital Group 6.0% 3 Wasatch 5.6% 4 Temasek Holding 4.6% 5 Kotak MF & AIF 4.6% 6 West
Slide 46: Experienced Board of Directors
Experienced Board of Directors Mr. Raj Vikash Verma Chairman and Independent Director 40+ years of experience Masters in Economics, MBA (FMS), CAIIB Ex-Chairman at NHB Leadership positions at IMGC, CERSAI, PFRDA, etc. Independent Directors Executive Directors Mr. H R Khan Ms. Jyoti Narang Mr. Krisha
Slide 47: Abbreviations
Abbreviations AUM Asset Under Management NTC New to Credit BSBDA Basic Savings Bank Deposit A/C OPEX Operating Expenses CASA Current Account Deposits and Savings Account Deposit P&L Profit & Loss Statement CRAR Capital Adequacy Ratio PAT Profit After Tax DPD Days Past Due PMJJBY Pradhan Mantri Jeeva
Slide 48: Definitions
Definitions Core Markets are smaller centres in rural/semi-urban which typically have a local economy built around agriculture and a. Core Markets small businesses, and which have traditionally been our traditional markets for lending. b. Urban Markets Larger centres which have more advanced infrast
Slide 49: 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 50: Thank You
THANK YOU For Investor queries contact (details in QR Code): Prince Tiwari | Aseem Pant Email: investorrelations@aubank.in
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