Iifl Finance Limited · NSE:IIFL
Iifl Finance — Q1 FY2021 Earnings Presentation
54 slides from Iifl Finance's earnings presentation, Jul 21, 2020
Slide 1: IIFL Finance cover letter to exchanges
IIFL FINANCE July 21, 2020 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, Dalai Street, Bandra - Kuria Complex, Bandra (E), Mumbai 400 001. Mumbai 400 051.
Slide 2: Press Release: Results update Q1FY21
IIFL Finance Limited Press Release For immediate publication Mumbai, India July 21, 2020 Results update -Profit after tax for Q1FY21 at Rs 228 Cr* (up 26% y-o-y and 5% q-o-q) -Income for Q1FY21 at Rs 673 Cr (up 10% y-o-y and down 1% q-o-q) For the quarter ended June 30, 2020 (Q1FY21), consolidated r
Slide 3: Press release: AUM, asset quality and segment update
IIFL Finance had loan assets under management of Rs 38,335 Cr as at June 30, 2020, with the home loans segment constituting 33%, business loans 21%, gold 25% and microfinance 8% of the total AUM. The company’s annualized ROE and ROA for Q1FY21 stood at 19.5% and 2.7% respectively (excluding exceptio
Slide 4: Awards and Accolades; About IIFL
Awards and Accolades: IIFL Finance received the ‘Golden Peacock National Training Award – 2020’ IIFL Finance received the 'Most Admired Service Provider in Financial Sector' at the ET Now World BFSI Awards IIFL Finance featured in ‘India’s Best Workplaces in BFSI 2020’ – Top 25 list The Econ
Slide 5: Performance Review, quarter ended June 30, 2020
Performance Review For the quarter ended June 30, 2020 IIFL Finance Limited July 21, 2020 1
Slide 6: Agenda
I: Key Highlights- Results for Quarter ended June 2020 II: Q1FY21 Results & Financial Performance III: Liquidity Position Review IV: Construction & Real Estate Portfolio Update V: Review of Core Business Segments VI: Strategy Overview for Post COVID World VII: Corporate Information, Awards and CSR 3
Slide 7: Key Highlights- Results for quarter ended June 2020
Key Highlights- Results for quarter ended June 2020 Profits & ROE, excluding COVID provision, show a healthy trend. Q1FY21 Profit after tax was ₹228 Cr* (up 26% yoy). Annualized ROE and ROA were 19.5%* and 2.7%* respectively. Loan assets AUM was flat qoq and up 10% yoy to ₹ 38,335 Cr, with small tic
Slide 8: Q1FY21 Results & Financial Performance
I: Key Highlights- Results for Quarter ended June 2020 II: Q1FY21 Results & Financial Performance III: Liquidity Position Review IV: Construction & Real Estate Portfolio Update V: Review of Core Business Segments VI: Strategy Overview for Post COVID World VII: Corporate Information, Awards and CSR 3
Slide 9: IIFL Finance – Consolidated results (as per IND AS)
IIFL Finance – Consolidated results (as per IND AS) Quarter ended June 30, 2020 (NBFC, HFC and MFI) ₹ Crores Q1FY21 Q1FY20 Y-o-Y Q4FY20 Q-o-Q Loan book 28,350 25,792 10% 28,234 0% Assigned assets 9,985 9,128 9% 9,717 3% Assets under management 38,335 34,920 10% 37,951 1% Interest income 1,095.1 1,04
Slide 10: IIFL Finance – Consolidated Balance Sheet
IIFL Finance – Consolidated Balance Sheet Quarter ended June 2020 (NBFC, HFC and MFI) As at As at Assets (₹ Cr) June 30 2020 Liabilities and Equity (₹ Cr) June 30 2020 Audited Audited 1 Financial Assets 1 Financial Liabilities (a) Cash and Bank Balances 2,960 (a) Payables 113 (b) Receivables 28 (b)
Slide 11: Consistent financial performance and growth over years
Consistent financial performance and growth over years AUM (₹ Cr) Total Comprehensive Income (₹ Cr) ● NIM on Balance Sheet assets for Q1FY21 38,335 756* 37,951 701 stood at 6.7% and 34,904 31,228 NIM on assigned 22,281 463 19,514 423 assets for Q1FY21 339 228* stood at 6.3% FY16 FY17 FY18 FY19 FY20
Slide 12: Robust and improving financial position
Robust and improving financial position Return on Assets (%) Return on Equity (%) ● ROE was 19.5% and ROA was 2.7% for Q1FY21 (excluding 19.5%* impact of exceptional 16.9% 17.5% 16.9%* 2.7%* 15.2% items) 2.2% 2.2%* 13.3% 1.9% 2.0% 1.6% ● Tier I Capital Adequacy Ratio (CAR) stands at 15.3% against FY
Slide 13: Top-tier NBFC in India
Top-tier NBFC in India Company snapshot ₹ 38,335 Cr 88% Retail 2,372 Assets under Management 12% Wholesale Branches 5.35 327%# 17,789 Net Debt:Equity Ratio Liquidity Coverage Ratio Employees 101% 15.3% / 19.3% 1.95% / 0.86% Provision coverage of GNPA Tier 1 / Total Capital Adequacy Gross NPAs / Net
Slide 14: Diversified and granular asset portfolio
Diversified and granular asset portfolio - Small ticket retail loans are 88% of loan assets Diversified portfolio disperses exposure and balances cyclical vagaries AUM 3,289 9,867 16,176 22,281 34,904 37,951 38,335 (₹ Cr) Microfinance 4% 1% 1% 7% 6% 10% 8% 9% 8% 14% 14% 12% 12% Commercial vehicle fi
Slide 15: Strong asset quality maintained through cycles
Strong asset quality maintained through cycles…. Gross NPA (%) Net NPA (%) ● GNPA as at Q1FY21, was 1.95% and NNPA was 150 120 90 150 120 90 90 DPD 90 DPD 0.86% DPD DPD DPD DPD DPD DPD ● Under Ind AS, provision coverage (incl. standard 2.31% 1.82% 1.96% 1.95% assets provision) on NPAs 1.44% 1.71% 0.
Slide 16: Asset quality superior to industry in all products
Asset quality superior to industry in all products Credit quality has been steady across key product segments Core growth segments Synergistic segments Home loans Business loans Construction & Real Estate finance Gross NPAs (%) Gross NPAs (%) Gross NPAs (%) 4.4% 1.4% 1.4% 3.8% 3.7% 3.3% 0.8% 2.5% 2.
Slide 17: Sharp fall in loan assets under moratorium in June '20
Sharp fall in loan assets under moratorium in June ’20 Quarter ended June 30, 2020 (NBFC, HFC and MFI) • For the second moratorium scheme, the Company has offered moratorium to all its customers only on an opt-in basis AUM under % of AUM under % of AUM under % of AUM under Products (₹ Cr) Total AUM
Slide 18: Liquidity Position Review
I: Key Highlights- Results for Quarter ended June 2020 II: Q1FY21 Results & Financial Performance III: Liquidity Position Review IV: Construction & Real Estate Portfolio update V: Review of Core Business Segments VI: Strategy Overview for Post COVID World VII: Corporate Information, Awards and CSR 3
Slide 19: Well diversified funding mix
Well diversified funding mix Resource profile is well diversified, with increasing share of assigned assets and bank loans Funding mix (₹ Cr) 17,230 20,176 28,665 35,002 36,759 36,878 CBLO Commercial 4% 2% 12% Paper 16% 17% 27% 28% 30% Assignment 7% Debentures/ Bonds investors 4% 7% 24% 7% 5% 5% Sec
Slide 20: Availability of long term funding has been strong
Availability of long term funding has been strong Incremental long term funding (₹ Cr) Term Loan/Refinance NCD MTN 4,554 In Covid affected quarter, loan book has been flat. Long term fund raising 2,721 2,855 plan was adjusted accordingly 1,724 975 - 450 1,005 403 1,746 1,699 275 1,274 111 730 292 Q1
Slide 21: Debt repayment obligation schedule
Debt repayment obligation schedule Debt repayment obligation schedule (cumulative) 5,000 ₹ in Crores 4,500 4,566 4,000 Cash + undrawn lines = 3,745 Cr 3,688 3,500 3,576 3,000 3,338 2,500 2,777 2,000 2,293 1,500 1,849 1,000 500 466 242 - Jul'20 Aug'20 Sept'20 Oct'20 Nov'20 Dec'20 Jan'21 Feb'21 Mar'21
Slide 22: Structural Liquidity- Positive ALM mismatch across all buckets
Structural Liquidity- Positive ALM mismatch across all buckets This ALM chart shows structural liquidity consolidated for IIFL Finance & its subsidiaries. This is prepared broadly based on RBI format, assuming static balance sheet position, not taking into account fresh disbursements. The inflows co
Slide 23: Construction & Real Estate Portfolio Update
I: Key Highlights- Results for Quarter ended June 2020 II: Q1FY21 Results & Financial Performance III: Liquidity Position Review IV: Construction & Real Estate Portfolio Update V: Review of Core Business Segments VI: Strategy Overview for Post COVID World VII: Corporate Information, Awards and CSR 3
Slide 24: Construction & Real Estate projects analysis
Construction & Real Estate projects analysis basis 52 projects, with total principal outstanding of ₹3,988 Cr as at Q1FY21, accounting for 86% of IIFL CRE loans have been analyzed in detail. The balance 14% of CRE book is represented by very small projects. • We had retained PwC and JLL to do a fina
Slide 25: 93% of finance is for residential projects
93% of finance is for residential projects, and 58% of projects are in advanced stages of completion No. of POS as at % to Stages of construction Stage projects 30 Jun total • 58% of funded projects are in Residential 49 3,705 93% advanced stages of completion Land stage 3 172 4% • 10% of funded pro
Slide 26: Affordable residential projects contribute 77%
Affordable residential projects contribute 77% Project mix What is the definition of Affordable Residential? Projects where unit sales realisation is less than 2 Cr No. of POS as at in Mumbai, less than 1 Cr in Delhi, Bengaluru, Figs in Cr projects 30 Jun % to total Kolkata and 0.5 Cr in other non-m
Slide 27: High velocity suburbs of Mumbai and Gurgaon have 63% of funded projects
High velocity suburbs of Mumbai and Gurgaon have 63% of funded projects Geography mix No. of POS as at 30 % to Figs in Cr projects Jun total Mumbai 16 2,050 52% Gurgaon 11 441 11% Delhi 2 351 9% Noida 2 317 8% Pune 5 228 6% Banglore 3 202 5% Hyderabad 2 121 3% Jaipur 3 89 2% Bhiwandi, Thane 1 79 2%
Slide 28: 93% of funded developers have more than 10 years of track record
93% of funded developers have more than 10 years of successful track record RE Experience of Developers Relationship with IIFL No. of POS as at No. of No. of POS as at No. of No. of years No. of years projects 30 Jun Developers projects 30 Jun Developers 5-9 yrs 5 288 5 1-3 yrs 8 316 6 10-14 yrs 10
Slide 29: Post covid sensitivity analysis – receivable cover
Post covid sensitivity analysis – 97% of funded projects have a post covid receivable cover more than 1 • An in-depth study of the projects in a post Covid environment have been done and all cashflows have been redrawn considering potential decline in sale prices and velocity and increase in constru
Slide 30: Review of Core Business Segments
I: Key Highlights- Results for Quarter ended June 2020 II: Q1FY21 Results & Financial Performance III: Liquidity Position Review IV: Construction & Real Estate Portfolio Update V: Review of Core Business Segments VI: Strategy overview for Post COVID World VII: Corporate Information, Awards and CSR 3
Slide 31: Our product portfolio
Our product portfolio As on June 30, 2020 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 12,618 individuals Leverages underwriting skills d
Slide 32: Home loans – product overview
Home loans – product overview Affordable home loan Product Non-metro housing loan offering For home purchase, home renovation, home construction and plot purchase Affordable home loan: Salaried and self employed segment wherein household income is below ₹75k pm and are buying Customer proper
Slide 33: Home loans – financial overview
Home loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) Self Employed Salaried 2,700 5,300 8,579 12,197 12,443 12,618 10.8% 35% 41% 10.4% 48% 54% 58% 58% 10.3% 10.1% 9.8% 9.3% 65% 59% 52% 46% 42% 42% FY16 FY17 FY18 FY19 FY20 Q1FY21 FY16 FY17 FY18 FY19 FY20 Q1FY21 Average
Slide 34: Business loans – product overview
Business loans – product overview Product For business loans backed by cash flows offering Collateral must for loans of more than ₹ 50 Lakh; LTV up to 70% MSME customers having established business performance Customer Lending to manufacturing, trading and service sectors for working capital
Slide 35: Business loans – financial overview
Business loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 8,117 7,805 7,864 7,361 19.6% 6,000 16.3% 16.2% 5,100 13.4% 13.5% 14.3% FY16 FY17 FY18 FY19 FY20 Q1FY21 FY16 FY17 FY18 FY19 FY20 Q1FY21 Onboarding Average Ticket Size (₹ Lakhs) Gross NPAs (%) 89.0 3.7% 83.0 3.3%
Slide 36: Gold loans – product overview
Gold loans – product overview Product Loan against jewellery provided for personal & business use; offering On-boarding LTV < 70% , Current LTV at 65% Customer Salaried, self-employed and MSME businesses segments 70% are repeat customers Onboarding 13% AUM under AUM Gross/Net NPA Tenor Avera
Slide 37: Gold loans – financial overview
Gold loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 9,125 9,490 19.2% 18.7% 19.6% 19.4% 18.1% 18.1% 6,195 4,037 2,914 2,910 FY16 FY17 FY18 FY19 FY20 Q1FY21 FY16 FY17 FY18 FY19 FY20 Q1FY21 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 58 56 53 51 46 48 0.6%
Slide 38: Microfinance – product overview
Microfinance – product overview Product Small-ticket loans for purpose of income generation activities offering Customer Target segment is rural and semi-urban self-employed women formed into joint liability groups segments AUM Gross/Net NPAs States Total Customers Tenor 34% AUM under Moratorium
Slide 39: Microfinance – financial overview
Microfinance – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 3,400 3,222 2,286 25.9% 24.4% 840 22.6% 22.8% 22.0% 22.1% 110 238 FY16 FY17 FY18 FY19 FY20 Q1FY21 FY16 FY17 FY18 FY19 FY20 Q1FY21 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 27 23 1.5% 1.6% 21 17 15 17
Slide 40: Widespread physical network
Widespread physical network.. 85% of branches are in Tier 2 and Tier 3 locations Wide spread network across 25 states and over 600 locations Number of branches 2,377 2,372 1,947 1,161 Mar'15 Mar'19 Mar'20 Jun'20 Regional split of branches South, 35% West, 39% Open branches Closed branches East, 11%
Slide 41: Strategy Overview for Post COVID World
I: Key highlights- Results for Quarter ended June 2020 II: Q1FY21 Results & Financial Performance III: Liquidity Position Review IV: Construction & Real Estate Portfolio Update V: Review of Core Business Segments VI: Strategy Overview for Post COVID World VII: Corporate Information, Awards and CSR 3
Slide 42: Strategy update
Strategy update Capital Optimized Value Innovation Driven Business Model Capital Optimized Value Driven • Focus on originating retail assets, with credit • All our software applications based on proprietary underwriting standards meeting major banks’ technology have been migrated to cloud, which cri
Slide 43: Cost optimization plan
Cost optimization plan Fixed cost (₹ Cr) Variable cost (% of Avg AUM) Emp cost Other Fixed opex 258 235 210 90 83 74 0.20% 0.18% 167 152 136 0.11% Q4 FY20 Q1 FY21 FY21 Quarterly Exit Q4 FY20 Q1 FY21 FY21 Quarterly Exit Target Target Fixed cost (₹ Cr) Q4 FY20 Q1FY21 Employee cost 167.4 152.4 Cost o
Slide 44: 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
Slide 45: Cross-sell to large retail customer base
Cross-sell to large retail customer base One stop shop for retail customers, building relationship for life HEALTH INSURANCE HOME LOAN MFI FIXED DEPOSIT 250k BUSINESS LOAN GOLD LOAN 15 lakhs 840k 31 lakhs LIFE INSURANCE CURRENCIES ₹ MUTUAL FUND DERIVATIVES EQUITIES FINANCIAL COMMODITIES PLANNING In-
Slide 46: Corporate Information, Awards and CSR
I: Key Highlights- Results for Quarter ended June 2020 II: Q1FY21 Results & Financial Performance III: Liquidity Position Review IV: Construction & Real Estate Portfolio Update V: Review of Core Business Segments VI: Strategy Overview for Post COVID World VII: Corporate Information, Awards and CSR 3
Slide 47: Distinguished Board of Directors
Distinguished Board of Directors IIFL Finance – Board of Directors Nirmal Jain, Chairman & Whole-time Director R Venkataraman, Managing Director MBA from IIM Ahmedabad, rank-holder CA MBA from IIM Bangalore, B-Tech from IIT and Cost Accountant. Worked with Unilever for Kharagpur 5 years Worked
Slide 48: Management team with rich domain experience; Marquee investors
Management team with rich domain Marquee investors experience IIFL Finance Chief Financial Officer Rajesh Rajak Chief Risk Officer Anujeet Kudva Compliance Officer Gajendra Thakur IIFL Finance Limited IIFL Home Finance Public & Others Chief Executive Officer Monu Ratra 18.7% Promoters 24.9% Chief Fi
Slide 49: Strong risk management framework
Strong risk management framework Multi-level risk governance for efficient monitoring and control of product and entity level risks Scope Board of directors Authority Risk Strategy & Advisory on Risk Appetite Empower Approve large-ticket cases Risk Board Credit Information Asset Liability Commit
Slide 50: IIFL's brand and credibility recognized at various forums
IIFL’s brand and credibility recognized at various forums IIFL Finance received the ‘Golden The Economic Times recognized IIFL Finance Limited' has been Peacock National Training Award- our Chairman as one of the 'Most awarded the ‘Golden Peacock Award 2020' Promising Business Leaders of for Risk Ma
Slide 51: Rohit Sharma is IIFL Finance's Brand Ambassador
Ace cricketer Rohit Sharma is IIFL Finance’s Brand Ambassador #SeedhiBaat The language of money is at its elegant best when done the 'SeedhiBaat‘ way : By keeping our loan products simple; and the process transparent. By valuing the customer above all else; and displaying an un-wavering commitment t
Slide 52: GoFit health challenge in partnership with HealthifyMe
GoFit health challenge in partnership with HealthifyMe IIFL partnered with ‘HealthifyMe App’ to offer employees a corporate digital wellness program. Employees were given access to the premium features of the app including an AI health coach ‘RIA’ The GoFit challenge ran for eight weeks where employ
Slide 53: Corporate Social Responsibility
Corporate Social Responsibility Sakhiyon ki Badi (Rajasthan) Covid-19 relief IIFL Foundation’s Sakhiyon ki Badi are community based learning centers operating across 11 districts of Rajasthan, aiming towards eradication of Female Illiteracy. • IIFL Foundation contributed `5 Cr. to the PM Cares Fund
Slide 54: Thank you
Thank you Published in July 2020 IIFL Finance 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. This report is for information purposes only and does not construe to be any investment, legal or taxatio