Creditaccess Grameen Ltd. · NSE:CREDITACC
Creditaccess Grameen — Q4 FY22 Earnings Presentation
55 slides from Creditaccess Grameen's earnings presentation, May 12, 2022
Slide 1: Submission letter to stock exchanges
May 12, 2022 To BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers The Exchange Plaza Dalal Street Bandra Kurla Complex Mumbai- 400001 Bandra (East), Mumbai 400051 Scrip code: 541770 Scrip code: CREDITACC Dear Sir/Madam, Sub.: Investor Presentation We hereby submit the In
Slide 2: CreditAccess Grameen Limited Q4 & FY22 Investor Presentation
CreditAccess Grameen Limited Q4 & FY22 Investor Presentation May 2022 www.creditaccessgrameen.in
Slide 3: 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 4: Discussion Summary
Discussion Summary Key Business Updates Consolidated Overview CA Grameen: Financial Metrics MMFL: Financial Metrics Investment Rationale Annexure Note: The presentation includes certain provisional figures for April 2022 which are yet to be approved by the Audit Committee, Statutory Auditors and the
Slide 5: Key Consolidated Business Highlights – Q4 FY22
Key Consolidated Business Highlights – Q4 FY22 Robust Business Momentum Consistently Improving Asset Quality Successfully achieved FY22 guidance CA Grameen: FY22 Q4 FY22 FY22 • ECL: 3.19% against GNPA (GS3): 3.12% (largely @ 60+ dpd) & PAR 90+: 2.26% Consolidated Guidance Performance Performance • O
Slide 6: Improving Collections Trend (CA Grameen)
Improving Collections Trend (CA Grameen) Consistent MoM Improvement in Collections 97% 98% 97% 97% 94.5% 95.6% 95.7% 97% 95.9%97% 95.8%97% Q3 FY22 Jan-22 Feb-22 Mar-22 Q4 FY22 Apr-22 CE% (excl. arrears) CE% (incl. arrears) State-wise Collection Trend Reduction in % GLP of Non-paying Customers CE % J
Slide 7: Improving Asset Quality Trend (CA Grameen)
Improving Asset Quality Trend (CA Grameen) Consistent Decline in PAR backed by Improvement in Collections PAR 0 PAR 30 PAR 60 PAR 90 11.5% 8.5% 6.8% 6.2% 5.8% 6.6% 5.6% 5.3% 4.8% 4.7% 5.0% 3.6% 5.4% 4.5% 4.2% 4.2% 4.1% 3.0% 2.6% 2.3% Sep-21 Dec-21 Jan-22 Feb-22 Mar-22 PAR 0 Jan-22 Feb-22 Mar-22 PAR
Slide 8: Increasing Borrower Retention (CA Grameen)
Increasing Borrower Retention (CA Grameen) Supporting the Retained / Higher Vintage Borrowers, whilst consciously Adding New Borrowers with Deep Rural Focus 1 Share of Borrowers with 3+ Years Vintage Increased to 53% in Mar-22 Avg. GLP Per Borrower will Gradually Stabilize with 3 Higher Borrower Add
Slide 9: Early Risk Recognition & Conservative Provisioning (CA Grameen)
Early Risk Recognition & Conservative Provisioning (CA Grameen) Adequate Provisioning Coverage Payment wise Breakup of EAD INR Cr CA Grameen Policy (IND-AS) Contribution of Stage 1 Stage 2 Stage 3 Total Q4 FY22 Asset Classification (dpd) EAD (INR Cr) EAD% ECL% Borrowers as on Mar-22 EAD% EAD% EAD% E
Slide 10: Continued Recovery in Collections & Asset Quality at MMFL
Continued Recovery in Collections & Asset Quality at MMFL MoM Improvement in Collection Efficiency % GLP of Non-Paying Groups CE% (excl. arrears) CE% (incl. arrears) 3.6% 2.9% Full Payment 90% 92% 91% 93% 92% 94% 91% 93% 92% 93% 8.3% 12.9% Partial Payment 88.9% No Payment 83.5% Jan-22 Feb-22 Mar-22
Slide 11: Building Adequate Provisioning at MMFL
Building Adequate Provisioning at MMFL Adequate Provisioning Coverage INR Cr CA Grameen Policy (IND-AS) Q4 FY22 Asset Classification (dpd) EAD (INR Cr) EAD% ECL% Stage 1 0 – 15, 0 – 30 2,633.9 92.6% 1.2% Stage 2 16 – 60, 31 – 90 43.9 1.5% 34.0% Stage 3 60+ 165.5 5.8% 49.9% Total 2,843.3 100.0% 4.6%
Slide 12: FY23 Business Guidance: Key Indicators
FY23 Business Guidance: Key Indicators Key Indicators – Consolidated FY23 Guidance GLP – Growth % 24.0% - 25.0% Credit Cost (Provisions + Write-offs) – 1.8% - 2.0% % of Avg. On-Book Loan Portfolio Return on Assets % 4.0% - 4.2% Return on Equity % 16.0% - 18.0% Note: The guidance provided considers a
Slide 13: Impact of RBI’s New Microfinance Guidelines
Impact of RBI’s New Microfinance Guidelines Key Directives Advantages for CA Grameen Annual household income limit raised to • Predominant rural focus and customer centric business model to provide significant head start INR 3 Lakh (earlier INR 1.25 Lakh in rural, for market share expansion and incr
Slide 14: CA Grameen is Well Placed in a Rising Interest Rate Scenario
CA Grameen is Well Placed in a Rising Interest Rate Scenario Limited Impact on Net Interest Margin (NIM) in FY23 • The new microfinance guidelines announced by RBI, allowing risk-based pricing, to have a positive impact on loan pricing • Strong competitive edge with one of the lowest lending rates i
Slide 15: Discussion Summary
Discussion Summary Key Business Updates Consolidated Results Overview CA Grameen: Financial Metrics MMFL: Financial Metrics Investment Rationale Annexure www.creditaccessgrameen.in 14
Slide 16: Q4 FY22: Consolidated Performance Highlights
Q4 FY22: Consolidated Performance Highlights NIM Cost/Income Ratio 11.3%/ 12.1%1 33.8% PPOP GLP: INR 16,599 Cr INR 369 Cr (+22.2% YoY) Weighted Avg. COB Opex/GLP Ratio (+12.1% YoY) 8.9% 4.8% ROA Capital Adequacy Ratio Total Equity 3.7% 22.8% INR 4,076 Cr PAT: INR 160 Cr (+184.4% YoY) ROE Tier 1 Rati
Slide 17: Q4 & FY22: Consolidated P&L Statement
Q4 & FY22: Consolidated P&L Statement Profit & Loss Statement (INR Cr) Q4 FY22 Q4 FY21 YoY% Q3 FY22 QoQ% FY22 FY21 YoY% Interest income 728.5 612.0 19.0% 654.1 11.4% 2,567.3 2,290.0 12.1% - Interest on Loans 1 721.6 602.1 19.8% 647.6 11.4% 2,533.0 2,251.5 12.5% - Income from Securitisation 0.0 1.0 -
Slide 18: Q4 & FY22: Consolidated Balance Sheet
Q4 & FY22: Consolidated Balance Sheet Balance Sheet (INR Cr) Q4 FY22 Q4 FY21 YoY% Q3 FY22 QoQ% FY22 FY21 Cash & Other Bank Balances 1,761.4 2,484.4 -29.1% 1,625.3 8.4% 1,761.4 2,484.4 Loans - Balance sheet assets (Net of Impairment Loss Allowance) 14,765.3 11,707.4 26.1% 13,379.0 10.4% 14,765.3 11,7
Slide 19: Q4 & FY22: Understanding the Credit Cost Impact
Q4 & FY22: Understanding the Credit Cost Impact Consolidated (INR Cr) Q4 FY22 FY22 Opening ECL - (A) 671.0 622.6 Additions (B) - Provisions as per ECL 59.4 379.9 Reversals (on account of write-off) (C) 202.8 476.8 Closing ECL (D = A+B-C) 533.9 533.9 Write-off (E) 294.4 693.6 Credit Cost (F = B-C+E)
Slide 20: Q4 FY22: Continued Business Traction With Rural Focus
Q4 FY22: Continued Business Traction With Rural Focus Gross Loan Portfolio (GLP) (INR Cr) Borrowers (‘000) 22.2% -2.2% 16,599 14,587 2,868 3,912* 13,587 3,785* 3,751* 3,739* 3,824* 13,333 12,664 2,406 2,246 2,148 1,098 930 2,038 1,050 1,045 963 13,732 12,180 11,341 10,625 11,185 2,871 2,788 2,754 2,
Slide 21: Q4 FY22: Consistent Growth In Infrastructure
Q4 FY22: Consistent Growth In Infrastructure Branches 211 Branches Opened in the FY22 States Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Bihar - 15 20 - 1,593 1,635 Chhattisgarh - 5 - - 1,545 1,424 1,424 Gujarat - 10 12 6 467 471 464 Jharkhand - 10 - - 460 460 Madhya Pradesh - 10 - 10 Karnataka - - - 10 Kerala
Slide 22: Q4 FY22: Sustainable Operational Efficiency
Q4 FY22: Sustainable Operational Efficiency GLP / Branch (INR Cr) GLP / Loan Officer (INR Cr) 4.9 6.1 1.1 4.4 4.6 5.2 1.1 1.0 0.9 0.8 11.8 11.0 10.3 10.8 11.8 1.7 1.5 1.4 1.4 1.5 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 CA Grameen MMFL CA Grameen MMFL Borrowers
Slide 23: Q4 FY22: Product Range To Meet Diverse Customer Needs
Q4 FY22: Product Range To Meet Diverse Customer Needs GLP - Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Product Mix (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total IGL (Incl. MMFL) 12,838 94% 11,962 94% 12,613 95% 13,894 95% 15,949 96% Family Welfare 2
Slide 24: Q4 FY22: Well-Diversified Presence Across India
Q4 FY22: Well-Diversified Presence Across India Our Presence as on Mar-22 14 States & 1 UT 319 Districts Diversification Trend Mar-18 Mar-20 Mar-22 1,635 Branches Uttar Pradesh 55 Branches - % Share Rajasthan Bihar Top 3 States 80% 69% 60% 65 60 + 36 (MMFL) Others 20% 31% 40% Gujarat West Bengal Tot
Slide 25: Q4 FY22: District Wise Exposure Trend
Q4 FY22: District Wise Exposure Trend Consolidated Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Exposure of Districts No. of % of Total No. of % of Total No. of % of Total No. of % of Total No. of % of Total (% of GLP) Districts Districts Districts Districts Districts Districts Districts Districts Distri
Slide 26: Discussion Summary
Discussion Summary Key Business Updates Consolidated Results Overview CA Grameen: Financial Metrics MMFL: Financial Metrics Investment Rationale Annexure www.creditaccessgrameen.in 25
Slide 27: Q4 FY22: CA Grameen Standalone Performance Highlights
Q4 FY22: CA Grameen Standalone Performance Highlights NIM Cost/Income Ratio 11.5%/ 12.5%1 30.4% PPOP GLP: INR 13,732 Cr INR 332 Cr (+21.1% YoY) Weighted Avg. COB Opex/GLP Ratio (+10.9% YoY) 8.8% 4.5% ROA Capital Adequacy Ratio Total Equity 4.1% 26.5% INR 3,940 Cr PAT: INR 152 Cr (+110.4% YoY) ROE Ti
Slide 28: Q4 FY22: CA Grameen Standalone P&L Statement
Q4 FY22: CA Grameen Standalone P&L Statement Profit & Loss Statement (INR Cr) Q4 FY22 Q4 FY21 YoY% Q3 FY22 QoQ% FY22 FY21 YoY% Interest income 604.3 510.6 18.4% 544.9 10.9% 2,124.8 1,877.1 13.2% - Interest on Loans 1 599.2 504.3 18.8% 539.6 11.0% 2,099.3 1,858.2 13.0% - Income from Securitisation 0.
Slide 29: Q4 FY22: CA Grameen Standalone Balance Sheet
Q4 FY22: CA Grameen Standalone Balance Sheet Balance Sheet (INR Cr) Q4 FY22 Q4 FY21 YoY% Q3 FY22 QoQ% FY22 FY21 Cash & Other Bank Balances 1,534.3 1,946.0 -21.2% 1,367.8 12.2% 1,534.3 1,946.0 Investment in Mutual Funds 0.0 0.0 - 0.0 - 0.0 0.0 Loans- Balance sheet assets (Net of Impairment Loss Allow
Slide 30: Q4 FY22: Well-Diversified Liability Mix
Q4 FY22: 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 NBFCs - TL 3.6% domestic & foreign sources 1.7% Banks - TL FIs - TL • Target to meet funding re
Slide 31: Q4 FY22: Stable Liquidity/ ALM Position / Credit Ratings
Q4 FY22: Stable Liquidity/ ALM Position / Credit Ratings Static Liquidity / ALM Position For the Month For the Financial Year Debt Drawdowns (INR Cr) Q4 FY22 Particulars (INR Cr) Apr-22 May-22 Jun-22 FY23 FY24 Banks – TL 2,378.5 FIs 375.0 Opening Cash & Equivalents (A) 1,599.4 1,713.4 1,960.7 2,108.
Slide 32: Q4 FY22: Robust Quarterly Performance Trend (1/2)
Q4 FY22: Robust Quarterly Performance Trend (1/2) Gross Loan Portfolio (GLP) (INR Cr) Disbursements (INR Cr) 21.1% 4,648 4,143 3,866 13,732 3,412 11,341 11,184 12,180 10,625 907 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Margin Analysis (%) Operating Efficiency (
Slide 33: Q4 FY22: Robust Quarterly Performance Trend (2/2)
Q4 FY22: Robust Quarterly Performance Trend (2/2) Asset Quality (%) Total Income, NII, PPOP (INR Cr) 694 8.12% 609 577 7.18% 511 510 5.50% 404 446 5.00% 5.51% 349 6.40% 4.40% 302 309 4.38% 5.06% 3.19% 3.85% 4.23% 3.12% 332 300 2.91% 2.26% 246 197 188 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q
Slide 34: Discussion Summary
Discussion Summary Key Business Updates Consolidated Results Overview CA Grameen: Financial Metrics MMFL: Financial Metrics Investment Rationale Annexure www.creditaccessgrameen.in 33
Slide 35: Q4 FY22: MMFL Performance Highlights
Q4 FY22: MMFL Performance Highlights NIM Cost/Income Ratio GLP 10.0%/ 10.3%1 43.6% PPOP INR 2,868 Cr INR 45 Cr (27.7% YoY) Weighted Avg. COB Opex/GLP Ratio (37.5%) 9.6% 5.3% ROA Capital Adequacy Ratio Total Equity PAT 2.2% 20.0% INR 388 Cr INR 15 Cr (211.7% YoY) ROE Tier 1 Ratio D/E Ratio 16.0% 12.5
Slide 36: Q4 & FY22: MMFL P&L Statement
Q4 & FY22: MMFL P&L Statement Profit & Loss Statement (INR Cr) Q4 FY22 Q4 FY21 YoY% Q3 FY22 QoQ % FY22 FY21 YoY% Interest income 127.8 101.4 26.0% 109.2 17.0% 446.1 412.6 8.1% - Interest on Loans 126.1 97.9 28.8% 108.0 16.7% 437.3 393.0 11.3% - Income from Securitisation 0.0 1.0 - -0.1 - 0.6 13.0 -
Slide 37: Q4 & FY22: MMFL Balance Sheet
Q4 & FY22: MMFL Balance Sheet Balance Sheet (INR Cr) Q4 FY22 Q4 FY21 YOY% Q3 FY22 QoQ % FY22 FY21 Cash & Other Bank Balances 227.0 538.4 -57.8% 253.9 -10.6% 227.0 538.4 Loans - Balance sheet assets (Net of Impairment Loss Allowance) 2,713.3 1,989.5 36.4% 2,212.3 22.6% 2,713.3 1,989.5 - Securitised a
Slide 38: Q4 FY22: Quarterly Performance Trend (1/2)
Q4 FY22: Quarterly Performance Trend (1/2) Gross Loan Portfolio (GLP) (INR Cr) Disbursements (INR Cr) 27.7% 1,144 2,868 2,406 854 2,246 2,038 2,148 583 477 158 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Total Income, NII, PPOP (INR Cr) Total Equity (INR Cr) & Deb
Slide 39: Q4 FY22: Quarterly Performance Trend (2/2)
Q4 FY22: Quarterly Performance Trend (2/2) Margin Analysis (%) Operating Efficiency (%) 20.0% 6.1% 5.7% 6.1% 6.0% 18.4% 19.5% 18.7% 18.4% 5.3% 50.4% 56.4% 51.8% 51.6% 10.7% 10.6% 10.6% 10.1% 10.0% 43.6% 10.6% 10.2% 9.6% 8.3% 8.9% Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY2
Slide 40: Q4 FY22: Diversified Liability, Stable Liquidity, Positive ALM
Q4 FY22: Diversified Liability, Stable Liquidity, Positive ALM Liability Mix – Static Liquidity / ALM Position For the month Q4 FY22 Institution / Instrument Wise Particulars (INR Cr) Apr-22 May-22 Jun-22 Opening Cash & Equivalents (A) 179.4 210.0 274.4 Banks – Term Loan 70.1% Loan recovery [Princip
Slide 41: Discussion Summary
Discussion Summary Key Business Updates Consolidated Results Overview CA Grameen: Financial Metrics MMFL: Financial Metrics Investment Rationale Annexure www.creditaccessgrameen.in 40
Slide 42: 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 JLG Benefits: ✓ Strong group bonding ✓ Mutual support – both financial & emotional ✓ Guidance & grievance resolution ✓ Building awareness – Jagruti initiative ✓ H
Slide 43: Focus On Customer Centricity, Loyalty & Retention
Focus On Customer Centricity, Loyalty & Retention “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) Diverse produc
Slide 44: Calibrated Expansion Through Contiguous District-Based Approach
Calibrated Expansion Through Contiguous District-Based Approach Systematic geography selection based on availability of infrastructure, competition, historical performance trend, social/ economic/ political/ CA Grameen’s contiguous climate risk, growth potential district-based expansion Ensures cons
Slide 45: 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 • IA frequency – 6 times in a year at branches, 4 ti
Slide 46: Continuous Technology Enhancements to Drive Operational Efficiency
Continuous Technology Enhancements 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 • Up
Slide 47: 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 48: Strong Parentage of CreditAccess India N.V.
Strong Parentage of CreditAccess India N.V. Committed to Micro Finance Business Strong Financial Support • Invested through multiple rounds of capital funding along with • CreditAccess India N.V. (CAI) specialises in Micro and Small secondary purchase during 2009 to 2017 Enterprises financing • Disp
Slide 49: Past Five Years Performance Track Record (1/3)
Past Five Years Performance Track Record (1/3) Gross Loan Portfolio (GLP) (INR Cr) Active Borrowers (‘000) CAGR 35.2% CAGR 19.9% 16,599 4,055 * 3,912 * 2,868 3,824 * 13,587 1,215 1,098 930 11,996 2,246 2,100 2,470 7,159 1,851 13,732 4,975 11,341 2,905 2,871 2,922 9,896 2,470 7,159 1,851 4,975 FY18 F
Slide 50: Past Five Years Performance Track Record (2/3)
Past Five Years Performance Track Record (2/3) Branch Network Loan Officers Employees CAGR 33.4% CAGR 24.1% CAGR 25.5% 1,635 10,770 9,688 15,667 1,424 9,559 1,393 14,496 471 2,513 14,399 1,972 2,108 3,716 460 3,672 3,774 464 5,768 8,064 670 4,544 6,306 8,257 516 1,164 7,716 7,451 11,951 10,824 10,62
Slide 51: Past Five Years Performance Track Record (3/3)
Past Five Years Performance Track Record (3/3) Note: Refer Annexure for definition of key ratios Margin Analysis (%) Operating Efficiency (%) Asset Quality (%) 20.4% 20.0% 5.01% 19.4% 18.8% 18.3% 5.1% 5.0% 4.9% 4.8% 4.9% 3.61% 2.78% 11.5% 12.7% 12.2% 1.26% 1.14% 4.43% 10.7% 10.9% 39.2% 36.7% 38.1% 3
Slide 52: Discussion Summary
Discussion Summary Key Business Updates Consolidated Results Overview CA Grameen: Financial & Operational Metrics MMFL: Financial & Operational Metrics Investment Rationale Annexure www.creditaccessgrameen.in 51
Slide 53: Shareholding Structure
Shareholding Structure Shareholding Pattern – March 2022 Top 10 Institutional Investors – March 2022 Government Pension Fund Global ICICI Prudential Life Insurance Company Others, 3.75 QIB, 3.22 ICICI Prudential MF MF & AIF, Nippon MF 10.94 SBI MF T Rowe Price FPI, 8.24 Taiyo Pacific Partners Promot
Slide 54: 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 55: For Further Queries:
For Further Queries: Nilesh Dalvi 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 54