Iifl Finance Limited · NSE:IIFL

Iifl Finance — IIFL Holdings — FY2019 Earnings Presentation

51 slides from Iifl Finance's earnings presentation, May 15, 2019

  1. Slide 1: Cover letter to stock exchanges

    IIFL May 15, 2019 The Manager, The Manager, Listing Department, Listing Department, BSE Limited, The National Stock Exchange of India Ltd., Phiroze Jeejeebhoy Tower, Exchange Plaza, 5 Floor, Plot C/1, G Block, Dalal Street, Bandra - Kurla Complex, Bandra (E), Mumbai 400 001. Mumbai 400 051. Tel no.:

  2. Slide 2: Press Release: Results update

    IIFL Holdings Limited Press Release For immediate publication Mumbai, India May 15, 2019 Results update IIFL Consolidated Proforma Results * -Profit after tax for Q4FY19 at `373 Cr (up 30% y-o-y) and FY19 at `1,253 Cr (up 23% y-o-y) -Income# for Q4FY19 at `1,276 Cr (up 32% y-o-y) and FY19 at `4,305

  3. Slide 3: Loans and Mortgages

    Mr. Nirmal Jain, Chairman, IIFL Holdings Ltd., commented on the financial results: “In FY19, we have strengthened our position in all our core businesses. This year, with reorganisation of the group, three businesses namely Finance, Wealth and Securities will get listed independently. Our finance bu

  4. Slide 4: Wealth and Asset Management

    Wealth and Asset Management IIFL Wealth Management is the leading wealth management company in India. The company has catapulted itself to become the largest private wealth management firm in India in less than a decade since its inception. Headquartered in Mumbai, IIFL Wealth has over 900 employees

  5. Slide 5: Awards and Accolades received in Q4FY19

    Awards and Accolades received in Q4FY19:  Three businesses of IIFL Group – NBFC, Housing Finance and Securities – have been awarded “Great Place to Work” certification for the year 2019 -2020  IIFL Securities Ltd has been awarded as India's #1 banker for equity issuances by private sector companie

  6. Slide 6: About IIFL

    About IIFL IIFL Holdings Ltd (NSE: IIFL, BSE: 532636) is a leading player in the Indian financial services space. IIFL is engaged in the business of loans and mortgages, asset and wealth management, retail and institutional broking, investment banking and realty services through its various subsidia

  7. Slide 7: IIFL Holdings Limited (with group companies)

    For the quarter ended March 31, 2019 Bloomberg: IIFL IN IIFL Holdings Limited (with group companies) May 14, 2019 1

  8. Slide 8: Index

    Index I: IIFL Group Performance Overview 3 (i) IIFL Finance 8 (ii) IIFL Wealth 32 (iii) IIFL Securities 36 II: Ownership, Management and Governance 41 23 30 2

  9. Slide 9: IIFL Group – Structure and Ownership

    IIFL Group – Structure and Ownership Simplified structure – Three businesses to be separately listed  Promoters: 28.9%  Fairfax: 35.3% (Publicly listed)  Others: 35.8%(i) 84.5% 53.3% 100.0% Products Products Products Home loans, Business loans, Family office, AIFs, advisory Retail and institution

  10. Slide 10: IIFL Group – Proforma results at a glance

    IIFL Group – Proforma results at a glance Year ended March 2019 Key highlights of the period Profit Profit ₹ Cr Income Y-o-Y Y-o-Y Y-o-Y Continuing business Before After (%) (%) (%) Loan AUM growth at Tax Tax 29% IIFL Finance 2,603.2 39% 1,052.9 53% 717.4 55% ROE stands at 18.3% IIFL Finance excl an

  11. Slide 11: IIFL Group – Consolidated results (Proforma)

    IIFL Group – Consolidated results (Proforma) Quarter ended March 2019 ` Cr Q4FY19 Q4FY18 Y-o-Y FY19 FY18 Y-o-Y Revenue from Operations 1,940.9 1,673.8 16% 7,235.8 6,271.7 15% Other income 57.0 (8.7) 755% 178.6 147.0 21% Total Income 1,997.9 1,665.1 20% 7,414.4 6,418.7 16% Employee cost 329.2 309.4 6

  12. Slide 12: IIFL Group – Consolidated financial trends (Proforma)

    IIFL Group – Consolidated financial trends (Proforma) Proforma results show performance of listed company as on March 2019 Net-worth (` Cr) Profit after tax (` Cr) Return on Equity (%) 965 19.0% 17.7% 19.3% 5,953 17.3% 17.5% 5,066 793 4,381 686 13.5% 3,352 447 511 2,152 2,558 278 FY14 FY15 FY16 FY17

  13. Slide 13: IIFL Group Performance Overview: IIFL Finance

    I: IIFL Group Performance Overview (i) IIFL Finance (ii) IIFL Wealth (iii) IIFL Securities II: Ownership, Management and Governance 7

  14. Slide 14: Top-tier NBFC in India

    Top-tier NBFC in India Company snapshot ₹ 34,904 Cr 85% Retail 1,947 16,779 Assets under Management 15% Wholesale Branches Employees 16.0% / 19.2% 1.95% / 0.62% 2.2% 18.3% Tier 1 / Total Capital Adequacy Gross NPAs / Net NPAs Return on Assets Return on Equity Unique advantages of IIFL Finance Granul

  15. Slide 15: Our Product Portfolio

    Our Product Portfolio Strategic focus on segments that are core strengths and have inter se synergies AUM (₹ Cr) Target customers Unique features  Salaried / Self-employed  Focused on affordable and non-metro housing segments 12,196.6 individuals  Leverages underwriting skills developed over time

  16. Slide 16: Granular and diversified asset portfolio

    Granular and diversified asset portfolio Focus on small-ticket retail loans leading to low delinquencies GNPAs (%) 5.0% 4.0% Developer and Construction 3.0% Business Loans 2.0% Capital Markets 1.0% Microfinance Home Loans Gold Loans 0.0% -10 0 10 20 30 40 50 60 70 -1.0% Average Ticket Size (₹ lacs)

  17. Slide 17: Vast physical network spread across the country

    Vast physical network spread across the country c.85% of branches are in Tier 2 and Tier 3 locations Wide spread network across 25 states and over 600 locations Number of branches 1,947 1,161 191 Mar'11 Mar'15 Mar'19 Regional split of branches 39% 35% South North East West 11% 15%  Branches are str

  18. Slide 18: Ability to leverage physical presence and cross-sell

    Ability to leverage physical presence and cross-sell One stop shop for retail customers, building relationship for Life HOME LOAN MFI HEALTH INSURANCE 197k BUSINESS LOAN GOLD LOAN 10 lacs FIXED DEPOSIT 440k 24 lacs LIFE INSURANCE CURRENCIES ₹ MUTUAL FUND DERIVATIVES EQUITIES FINANCIAL COMMODITIES PL

  19. Slide 19: End-to-end digitization through multiple innovations

    End-to-end digitization through multiple innovations SOURCING  Propensity-based targeting built on machine learning model  Leads generated are communicated to individual branches to generate action  High conversions: More than 15x of natural response rate ONBOARDING  Tablet based on-boarding pro

  20. Slide 20: IIFL Finance – Consolidated results (as per IND AS)

    IIFL Finance – Consolidated results (as per IND AS) Quarter ended March 2019 (NBFC, HFC and MFI) ₹ Cr Q4FY19 Q4FY18 Y-o-Y FY19 FY18 Y-oY Loan book 26,575 23,388 14% 26,575 23,388 14% Securitization / Assignment 8,329 3,774 121% 8,329 3,774 121% Assets under management 34,904 27,162 29% 34,904 27,162

  21. Slide 21: Achieving volume & profit growth with superior asset mix

    Achieving volume & profit growth with superior asset mix Quarter ended March 2019 ● Focus getting sharper on AUM break-up (%) Loan AUM (₹ Cr) FY19 FY18 Y-o-Y small ticket retail loans, Home Loan 8,362 7,493 12% Capital dispersing risk with Micro- Market Finance, Business Loan 6,868 7,127 (4%) granul

  22. Slide 22: Increasing diversification across products and customers

    Increasing diversification across products and customers Business mix shifting towards a diversified mix of superior quality retail assets Diversified portfolio disperses exposure and balances cyclical vagaries AUM(i) 3,289 9,867 16,176 22,281 34,904 (₹ Cr) Commercial vehicle finance 4% 1% 1% 7% Mic

  23. Slide 23: Through cycles, maintaining superior quality of assets

    Through cycles, maintaining superior quality of assets Quarter ended March 2019 Gross NPA (%) Net NPA (%) ● GNPA stood at 1.9% and NNPA at 0.6% 180 150 120 90 90 180 150 120 90 90 DPD DPD DPD DPD DPD DPD DPD DPD DPD DPD ● Under Ind AS, provision coverage (incl. standard assets provision) on 1.95% 1.

  24. Slide 24: Stable asset quality across products

    Stable asset quality across products Credit quality has been steady across key product segments, with gross NPA c.2% or lower Core growth segments Synergistic segments Home loans Business loans Developer & Construction finance Gross NPAs (%) Gross NPAs (%) Gross NPAs (%) 4.4% 3.1% 2.7% 2.7% 2.2% 2.4

  25. Slide 25: Funding costs rise, yields rise in tandem

    Funding costs rise, boarding yields rise in tandem Quarter ended March 2019 Cost of Funds (%) NIM (%) ● Capital adequacy at 19.2%, well above the minimum requirement 12.0% 7.2% 11.1% 7.1% ● Tier I Capital Adequacy 10.2% 9.4% 7.0% 8.4% 8.9% Ratio stands at 16.0% 6.5% against a threshold of 6.2% 6.3%

  26. Slide 26: Comfortable liquidity position – 1 / 2

    Comfortable liquidity position – 1 / 2 Quarter ended March 2019 Positive ALM mismatch across all buckets and comfortable liquidity position ₹ Cr Cumulative Outflow Cumulative inflow Surplus [] Cumulative mismatch as a % of cumulative outflow 46% 26% 13% 13% 36% 52% 12% 5% 0% 6,643 34,095 29,009 34,0

  27. Slide 27: Comfortable liquidity position – 2 / 2

    Comfortable liquidity position – 2 / 2 Quarter ended March 2019 Raised long term funding in H2FY19 despite sector-wide liquidity crunch Type of debt raised (₹ Bn) Q1FY19 Q2FY19 Q3FY19 Q4FY19 Long term (NCDs + Term loans / Refinance) 3,428 3,734 2,122 1,939 Securitization/ Direct assignment 2,273 1,4

  28. Slide 28: Well diversified funding mix

    Well diversified funding mix Quarter ended March 2019 Resource profile is well diversified, with increasing share of assigned assets and bank loans Split of funding Borrowings 15,420 17,230 20,176 28,665 35,002 (₹ Cr) Collateralized Lending & 4% 2% Borrowing Obligations 16% 12% Commercial Paper 18%

  29. Slide 29: Strong risk management framework under the Board’s direct supervision

    Strong risk management framework under the Board’s direct supervision Multi-level risk governance for efficient monitoring and control of product and entity level risks Scope Authority Board of Directors  Risk Strategy and Advisory Empower  Approve large-ticket cases Risk Board Credit Information

  30. Slide 30: Leveraging technology for superior credit underwriting

    Leveraging technology for superior credit underwriting Ongoing Portfolio Tenure Norms Policy Checks Monitoring Delinquency Automated Driver Analysis Pricing Grid RISK MONITORING Work Experience Check Income Checks ITR Norm Check Loan Servicing Customer Service Bureau Checks Default Check LOAN MANAGE

  31. Slide 31: IIFL Finance - Developer and Construction Finance additional Information

    IIFL Finance - Developer and Construction Finance additional Information 25

  32. Slide 32: Developer and Construction Finance – Product overview

    Developer and Construction Finance – Product overview Product  Loans to real-estate developers for construction activity AUM offering  Target developers (since FY17) where projects can be approved for IIFL home loans INR 5055 Cr  Developers with impeccable credit history and proven project execut

  33. Slide 33: Developer and Construction Finance – Credit Processes

    Developer and Construction Finance – Credit Processes Pre Sanction Post Disbursal Asset Management Strategic Selection Disbursement Process Review of real estate • SPV, project level Original • Variance analysis trends exposure Loan Docket Security • RERA monitoring • Developers with IIFL Documents

  34. Slide 34: IIFL Finance – Developer and Construction Finance Portfolio

    IIFL Finance – Developer and Construction Finance Portfolio Quarter ended March 2019 Geographical Spread Zonal Distribution of which New Delhi 7% North (30%) 27% Delhi NCR Gurgaon, Faridabad 47% Indirapuram, Noida, Greater Noida, Ghaziabad 46% 3% North-Tier II Jaipur, Chandigarh, Ludhiana, Lucknow,

  35. Slide 35: IIFL Finance – led by an independent and illustrious Board

    IIFL Finance – led by an independent and illustrious Board… V. K. Chopra, Chairman Sumit Bali, Executive Director & CEO  Chartered Accountant and Former  MBA from IIM Ahmedabad Whole-Time Member, SEBI  More than 24 years of banking experience, including  Former Chairman & MD - Corporation headin

  36. Slide 36: … and supported by highly experienced senior management

    … and supported by highly experienced senior management IIFL Finance IIFL Home Finance Samasta Microfinance Sumit Bali Monu Ratra Narayanswamy Venkatesh  MBA from IIM Ahmedabad  Qualified architect and  20 years of experience in Chief  More than 24 years of MBA the financial services sector bank

  37. Slide 37: IIFL Group Business Overview: IIFL Wealth

    I: IIFL Group Business Overview (i) IIFL Finance (ii) IIFL Wealth (iii) IIFL Securities II: Ownership, Management and Governance 31

  38. Slide 38: IIFL Wealth – Consolidated results (as per IND AS)

    IIFL Wealth – Consolidated results (as per IND AS) Quarter ended March 2019 `Cr Q4FY19 Q4FY18 Y-o-Y FY19 FY18 Y-o-Y Assets under advice, management and distribution 1,69,312 1,31,762 28% 1,69,312 1,31,762 28% Fee based income 195.8 233.0 (16%) 852.0 881.1 (3%) Less: Direct Cost 30.8 22.7 36% 86.5 79

  39. Slide 39: Leading Wealth manager in India

    Leading Wealth manager in India Quarter ended March 2019 Total assets (` Cr) Profit before and after tax (` Cr) ● IIFL Wealth offers a broad range of product and services to participate in a 537 1,69,312 478 larger share of the client 1,31,762 363 369 384 wallet, including financial 94,919 products

  40. Slide 40: Broadening advisory and asset management services

    Broadening advisory and asset management services Quarter ended March 2019 ● Wealth NBFC, which Break-up of Wealth Mgmt Assets (%) Break-up of AMC Assets (%) mainly offers loans against securities to 4%2% 4% 3% 1% 1% 6% 2% 6% 5% 4% 6% 3% 4% 6% 3% 3% 3% 5% clients had a loan book 6% 12% 6% 12% 17% 29

  41. Slide 41: (iii) IIFL Securities

    I: IIFL Group Performance Overview (i) IIFL Finance (ii) IIFL Wealth (iii) IIFL Securities II: Ownership, Management and Governance 35

  42. Slide 42: IIFL Securities – Consolidated results (as per IND AS)

    IIFL Securities – Consolidated results (as per IND AS) Quarter ended March 2019 ` in Crore Q4FY19 Q4FY18 Y-o-Y FY19 FY18 Y-o-Y Revenue from Operations 206.3 221.9 (7%) 834.7 838.9 (1%) Other income 9.1 35.9 (75%) 41.6 124.9 (67%) Total income 215.4 257.8 (16%) 876.3 963.8 (9%) Employee cost 72.0 63.

  43. Slide 43: IIFL Securities – Turnover and market share

    IIFL Securities – Turnover and market share Quarter ended March 2019 ● IIFL is a key player in both Average daily turnover – Cash (` Cr) Average daily turnover - Total (` Cr) retail and institutional Quarterly Quarterly segments with a 3.5% share of daily cash 21,070 turnover 1,563 17,455 16,677 16,

  44. Slide 44: Digitization and Research backed institutional & retail equity businesses

    Digitization and Research backed institutional & retail equity businesses Quarter ended March 2019 Number of retail customers Distinguished Apps Internationally acclaimed research In ‘000 IIFL Markets 783 787 806 772 736 Highest rated (4.3) and Most downloaded (26.8L) stock trading app amongst peers

  45. Slide 45: Investment Banking has made significant strides

    Investment Banking has made significant strides Quarter ended March 2019  IIFL completed more than 15 transactions in the year, including 3 IPOs, 4 QIPs and 1 ReIT, despite market volatility  Maintained market leadership in equity raising for private sector corporates for the period FY18+FY19; hav

  46. Slide 46: II: Ownership, Management and Governance

    I: IIFL Group Business Overview (i) IIFL Finance (ii) IIFL Wealth (iii) IIFL Securities II: Ownership, Management and Governance 40

  47. Slide 47: Distinguished Board of Directors

    Distinguished Board of Directors IIFL Holdings – Board of Directors Nirmal Jain, Executive Chairman R Venkataraman, Managing Director ● MBA from IIM Ahmedabad, rank-holder CA and Cost ● MBA from IIM Bangalore, B-Tech from IIT Kharagpur Accountant ● Co-promoter of IIFL since 1999 ● Founded and led II

  48. Slide 48: Management team and Marquee Investors

    Management team with rich domain Marquee Investors experience and ownership Chairman Nirmal Jain IIFL Holdings Ltd Managing Director R. Venkataraman Public & Others 13.6% NRI IIFL Finance Sumit Bali 5.3% Promoters Domestic 29.0% IIFL Home Finance Monu Ratra Institution 1.5% IIFL Wealth Karan Bhagat

  49. Slide 49: IIFL’s brand and credibility are substantiated by multiple awards

    IIFL’s brand and credibility are substantiated by multiple awards IIFL Securities IIFL Finance IIFL Wealth The Mobby’s Award for Best Financial Website at World Marketing Congress Customer Excellence in NBFC Sector by Zendesk Financial Services Company of the Year Best Green at VC Circle wards 2019

  50. Slide 50: Corporate Social Responsibility

    Corporate Social Responsibility Annual Health Camp 2019 at Barsana IIFL hosts a health camp at the renowned pilgrimage place Barsana every year, providing free of cost eye and dental check up and treatments to the devotees. Eye Care Dental treatment 2,863 beneficiaries screened and 1,096 patients we

  51. Slide 51: Thank you

    Thank you Published in May 2019 © IIFL Holdings Ltd 2019-20 IIFL Holdings Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B-23, Thane Industrial Area, Wagle Estate, Thane – 400604. Tel.: +(91 22)4007 7000 Fax: 2685 0451. This report is for information purpos

IIFL Holdings — FY2019 Earnings Presentation on 6ix