Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q2 FY24 Earnings Presentation
59 slides from Au Small Finance Bank's earnings presentation, Oct 28, 2023
Slide 1: Cover letter to stock exchanges
Ref. No.: AUSFB/SEC/2023-24/210 Date: October 28, 2023 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 400001, Maharashtra. Maharashtra. NSE Symbol: AUBANK Scrip Co
Slide 2: Q2 FY24 Presentation
BADLAAV au SMALL FINANCE BANK PRESENTATION YEARS OF Q2’ FY24 BUILDING TRUST Sustainable Business Model | Retail Focused | Tech-Led | Customer Centric | Well Governed
Slide 3: Agenda
Management Update Assets Performance Operating & Financial Highlights Digital Bank AU 0101 Liabilities Performance Other Key Information
Slide 4: 1. Management Update
1. Management Update Stable quarter with consistent performance Profitability remains resilient with RoA at 1.7% % and RoE at 13.9% for Q2’FY24 Focusing on productivity & efficiency and controlled operating expenses Won “The Best Small Finance Bank 2021-22” at Financial Express Awards 2023
Slide 5: Key Messages
❑ Global macro situation continues to remain under watch with evolving geo-politics, persistent inflation, rising oil prices and historically high UST yields. This clubbed with tighter liquidity in the domestic market has ensured that interest rates continue to remain elevated ❑ The competitive inte
Slide 6: Other Highlights
❑ During Q2, Bank on-boarded ~3.65 Lacs new customers of which 45% were via digital products and channels; Additionally, we issued ~1.23 lac credit cards and opened ~54K savings accounts and ~1.7k current account via Video Banking + AU 0101 during the quarter ❑ Continuing with our “Badlaav Humse Hai
Slide 7: Q2'FY24 Financial performance snapshot
Q2’FY24 Financial performance snapshot ₹ 95,977 Cr ❑ Deposits grew 9% QoQ; CASA ratio at 34%; CASA + Retail TD mix at 66% Balance Sheet +23% YoY ❑ Gross advances grew 24% YoY and 2% QoQ. In this quarter, Wheels and MBL (erstwhile SBL) portfolio ₹ 75,743 Cr (incl. securitized) crossed landmark of ₹25
Slide 8: Focus areas for FY24
Focus areas for FY24 NIM Profitability and ROA NIM is expected in the range of 5.5%-5.7% as COF continues to remain Expected to be within last year’s range elevated ❑ Margin impact will be gradual ahead ❑ Fee Income to grow with support from x-sell, credit card and third- ▪ Bulk of the repricing is
Slide 9: Key Operating Highlights
Consolidation and Realignment of Business Groups 1 Urban Branch Banking 3 Retail Assets Insurance (Focused on Urban Affluent o Wheels market) Payments o Micro Business Loan (MBL) Key o Home Loan Wealth & PMS 2 Swadesh Banking, Operating Government and CMS 4 Commercial Banking Wholesale Deposits High
Slide 10: Our digital proposition is scaling well
Our digital proposition is scaling well AU 0101 Video Banking Credit Cards UPI QRs 24 Lacs+ 3.7 Lacs 7 Lacs+ ~1.1 million Digital customers Digital Savings Accounts Live cards QR Codes installed 13 Lacs+ 1,400 Cr+ 1,350 Cr+ 300 Cr+ Business loan disbursed Monthly Active Users Total relationship valu
Slide 11: Business model - deposits from Urban markets and lending in Core markets
Business model - deposits from Urban markets and lending in Core markets Deposits Break up Advances Break up 21% 38% (23%) 0.4% (35%) 0.4% Market Market Urban Core share share 79% 62% (77%) (65%) Serving 44 Lac+ customers across 258 districts and 727 locations 2% 1% 3% Rajasthan 2% 2% 1% 3% Maharash
Slide 12: Our geographical presence
Our geographical presence 21 States and 3 UTs 1,042 Touchpoints 258 Districts 727 Locations 495 ATMs Touchpoints Break-up J&K 2 HP 15 29% Punjab 52 Chandigarh 3 Uttarakhand 1 Haryana 52 Delhi 37 71% UP 19 Rajasthan Assam 1 401 Bihar 1 Urban Core MP 139 (+2) Jharkhand 1 AU Gujarat Asset West Bengal 7
Slide 13: 2. Operating & Financial Highlights
2. Operating & Financial Highlights Calibrated growth in Advances and Deposits with granularity NII up 15% YoY & PPoP up by 30% YoY Q2’FY24 PAT grew by 17% YoY NIM for H1’FY24 stands at 5.6% including securitised book
Slide 14: Profitability ratios
Profitability ratios NII (%) Other Income (%) RoA Components 5.8% 5.6% 1.8% 5.3% 5.4% 1.6% 1.3% 1.1% Q2'FY23 Q2'FY24 H1'FY23 H1'FY24 Q2'FY23 Q2'FY24 H1'FY23 H1'FY24 Opex (%) Provision & Contingencies (%) 4.5% 4.4% 4.3% 4.4% 0.5% 0.3% 0.2% 0.2% Q2'FY23 Q2'FY24 H1'FY23 H1'FY24 Q2'FY23 Q2'FY24 H1'FY23
Slide 15: H1'FY24 Financial highlights
H1’FY24 Financial highlights ₹ in Crores Net Interest Income Total Income PAT 5,730 2,059 2,495 789 4,219 610 H1'FY23 H1'FY24 H1'FY23 H1'FY24 H1'FY23 H1'FY24 Yield on Advance Cost of Fund Net Interest Margin RoA RoE Vs Vs Vs Vs Vs 13.3% 5.8% 6.0% 1.7% 13.9% (H1’FY23) (H1’FY23) (H1’FY23) (H1’FY23) (H
Slide 16: Quarterly trends of key parameters
Quarterly trends of key parameters Customers Employees Shareholders’ Funds Total B/S Assets (in Lacs) (in 000s) 44.3 28.7 27.8 28.3 28.4 28.5 95,977 41.3 11,379 11,763 91,583 90,216 35.7 38.6 10,114 10,540 10,977 33.3 77,878 80,703 Q1'FY24 Q3'FY23 Q2'FY23 Q4'FY23 Q2'FY24 Q1'FY24 Q3'FY23 Q2'FY23 Q4'F
Slide 17: Quarterly trends of key parameters
Quarterly trends of key parameters ₹ in Crores Net Interest Income Total Income PAT Gross Advance Yield 2,957 1,246 1,249 2,773 1,153 1,213 2,608 1,083 425 402 13.4% 13.4% 13.4% 13.3% 2,413 393 387 13.3% 2,240 343 Q3'FY23 Q1'FY24 Q3'FY23 Q1'FY24 Q2'FY24 Q2'FY23 Q4'FY23 Q2'FY24 Q2'FY23 Q4'FY23 Q1'FY2
Slide 18: Profit & Loss statement
Profit & Loss statement (All Figures in ₹ Crore) H1'FY24 H1'FY23 YoY Q2'FY24 Q2'FY23 YoY Q1'FY24 QoQ In Q2’FY24 : Income ❑ PPoP growth is robust at 30% YoY supported by Other Income growth Interest Earned 4,989 3,812 31% 2,531 1,992 27% 2,458 3% Interest Expended 2,494 1,753 42% 1,282 909 41% 1,212
Slide 19: Balance sheet
Balance sheet (All Figures in ₹ Crore) 30th Sep'23 30th Sep'22 YoY 30th Jun'23 QoQ 31-Mar-23 YTD ❑ Gross of securitisation, the Balance Liabilities Sheet has crossed ₹ 1 Lac crore mark Shareholders Fund 11,763 10,114 16% 11,379 3% 10,977 7% ❑ A Stable and healthy balance sheet Deposits 75,743 58,335
Slide 20: Other Income
Other Income (All Figures in ₹ Crore) H1'FY24 H1'FY23 YoY Q2'FY24 Q2'FY23 YoY Q1'FY24 QoQ Loan Assets Processing & Other Fees 349 283 24% 184 150 23% 165 11% General Banking, Cross Sell & Deposits related fees 185 88 110% 130 47 177% 55 137% PSLC Fees 0 25 N.A 0 13 N.A 0 0% Credit Card 122 40 205% 6
Slide 21: 3. Liabilities Performance
3. Liabilities Performance CASA deposit grew 6% QoQ, CASA ratio at 34%; CASA + Retail TD at 66% Retail TD grew 6% QoQ; Overall deposits cross ₹75,000 Cr milestone % CD Ratio at 85% CoF for Q2’FY24 at 6.70%
Slide 22: How has the Branch Banking charter evolved in last 6 years?
How has the Branch Banking charter evolved in last 6 years? Structure Deposits Liability Branches* Consolidated Unit of Liabilities 7,923 2017-18 Garner deposits with customer Mar'18 7,923 41% 27% Mar'18 212 80 14 mix ranging from Government, Co-operative Banks, Retail Customers etc Mar'20 12,989 13
Slide 23: Deposits snapshot
Deposits snapshot Focus on granular deposits and customer profiles ₹ in Crores Total Deposits 58,335 61,101 69,365 69,315 75,743 631 684 TASC 4% 4% 4% 4% 4% Certificate 588 546 993 of Deposits 9% 11% 10% 10% 9% 4,636 7% 7% 3,680 3,240 Banks 11% 8% 11% 13% 12% 14% 18% 2,819 14% 2,867 Govt 21,030 22,9
Slide 24: Building a Predictable, Scalable and Sustainable deposit franchise
Building a Predictable, Scalable and Sustainable deposit franchise Distribution becoming sharper with expanding scale ❑ Differentiated approach for Urban and Core markets ▪ Established Swadesh banking to cater to Semi Urban/Rural Markets ❑ Now a Pan India Bank with Presence in 21 states & 3 UT’s ▪ F
Slide 25: Wealth – Enhancing value proposition for our deposit customers
Wealth – Enhancing value proposition for our deposit customers ❑ Acquired 10k+ wealth customers during the quarter ❑ Introduced fixed income solutions & enhancement of IPO/ASBA platform ❑ 100 % digital journey for Wealth on AU 0101 Banking & Wealth Continuum Customer Segment Wealth Solutions Service
Slide 26: 4. Assets Performance
4. Assets Performance Sustainable and Scalable business model; 88% retail loans & 91% loans are secured Disbursement yield increased by 27 bps QoQ GNPA ratio at 1.91%; NNPA at 0.60% PCR at 73% including technical write-off and floating provision
Slide 27: Strong and established asset franchise
Strong and established asset franchise ❑ Vintage book and tested business model ❑ Unique product proposition with ~ 15 years' experience ❑ Growing opportunity in used and new vehicles especially in ❑ Strong collateral understanding core markets ❑ Deep penetration in core markets ❑ Deep penetration i
Slide 28: Asset book snapshot
Asset book snapshot Q2’FY24 Q2’FY23 ₹ in Crores Vintage Assigned/ Gross Assigned/ Segments Gross Gross Gross NPA Gross (year) Securitised Advance Securitised Yield (%) Advances NPA (%) Advances loans Yield (%) loans Wheels 1996 20,738 4,770 14.2% 519 2.5% 19,002 1,144 13.8% MBL (SBL) 2007 18,602 1,8
Slide 29: Provisioning Summary
Provisioning Summary Net Credit Loss (NCL) Q2’FY24 Q2’FY23 Q1’FY24 Repo & POS Loss 26 30 18 Write off 31 23 39 Less: Bad Debt Recovery* -19 -4 -8 Net Credit Loss 38 48 49 Net Credit Loss (as % of Avg. Total Assets) 0.16% 0.26% 0.22% Credit Cost - Net Impact on P&L Q2’FY24 Q2’FY23 Q1’FY24 Net Credit
Slide 30: Overview of provisions
Overview of provisions ₹ in Crores Sep’23 Jun’23 Particulars Loan Loan Nos. Provisions Coverage Nos. Provisions Coverage Amount Amount GNPA 55,897 1,245 819 66% 51,334 1,121 733 65% Covid related restructuring (Standard) 5,985 532 88 17% 7,091 605 100 17% Contingency provisions 7 28 Floating provisi
Slide 31: 5. Digital Bank AU 0101
5. Digital Bank AU 0101 24 Lacs+ digital customers 45% customers acquired via digital products in Q2’FY24 7 Lacs+ live credit cards ~1.1 Mn UPI QR codes installed
Slide 32: Key strategic objectives for tech
Key strategic objectives for tech Grow retail focused, stable, low-cost deposit franchise Develop unsecured lending capability using Data & Analytics Build digital distribution channels Invest in core technology to remain future ready Drive automation and operating efficiency 31
Slide 33: Digital is accelerating our customer acquisition and increasing engagement
Digital is accelerating our customer acquisition and increasing engagement Accelerated acquisition through digital proposition… …at much lower cost AU 0101 launch 45 100 No. of customers (Lacs) 40 11.9 Lacs 35 30 Acquisition 25 <50 20 15 FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 20 FY 21 FY 22 FY
Slide 34: AU 0101 – >5x growth since launch with 2 million+ digital customers
AU 0101 – >5x growth since launch with 2 million+ digital customers Tech Savvy Monthly Active Customer Base Digital Customers Customers Users Sep‘23 ~44.3 Lacs 30.4 Lacs 24.2 Lacs 13.1 Lacs Jun‘23 ~41.3 Lacs 27.2 Lacs 21.6 Lacs 12.2 Lacs QoQ 7% 11% 12% 8% Consistently improving digital adoption >5x
Slide 35: Video Banking - helping us achieve meaningful growth
Video Banking - helping us achieve meaningful growth ❑ Continue to develop Video Banking proposition with expanding suite of banking services delivered over secured video calls (acquisition, servicing and cross sell) ❑ Scaling up digital Current Account acquisition Video Banking SA acquisition as pr
Slide 36: Credit Card - continues to scale with strong performance across key metrics
Credit Card - continues to scale with strong performance across key metrics 7.0 lacs+ 4000 Cr+ 72% 1.7 lacs 1.23 lacs % Issuance to NTB # New users acquired in Cards Live Spends In Q2’FY24 Average limit per card Customers Q2’FY24 ❑ Monthly acquisition ~ 40,000 per month leading to card CIF growth of
Slide 37: UPI QR - deepening our relationship with small merchants
UPI QR - deepening our relationship with small merchants Acquisition ~1.1 Mn 69% 2.5 Lacs UPI QRs installed till Q2’FY24 Activation rate New customers acquired through UPI QR till Q2’FY24 ~2.2 Cr ~2.4 Lacs ₹ 2,043 Cr Transactions in Q2’FY24; Daily average Value of transactions in transactions in Sep
Slide 38: 6. Other Key Information
6. Other Key Information Fostering Sustainability Framework 15,800+ Youth trained and 12,400+ employed 8,100 children benefitted through AU Bano champion Launched Green Fixed Deposit product “Planet First”
Slide 39: Fostering Sustainable Framework
Fostering Sustainable Framework 38
Slide 40: Planet First : AU Green Fixed Deposit
Planet First : AU Green Fixed Deposit 39
Slide 41: CSR initiative @ AU
CSR initiative @ AU 2B Pagshin strategic other initiatives AU Ignite - 5 years Bano Champion completed (Rural Sports) (Skills Development) 15,800 + g 65 : 2 ] Youth Trained Locations 12,400+ z 8,100 + Children Benefitted = Youth Placed e (Women Entrepreneurship) AU Udyogini AU Jal Bank ~~ 2,100+ ; W
Slide 42: Financial & digital inclusion
Financial & digital inclusion Universal Access to Financial Services ➢ 31% of our total touchpoints - 325 are in unbanked rural centres (Tier-VI, population less than 5,000 & Tier-V, population less than 10,000) ➢ Present in 50 Special Focus Districts* with 89 touchpoints covering 23 Aspirational di
Slide 43: Awards and recognition – Q2'FY24
Awards and recognition – Q2’FY24 Best Small Finance Bank FE India’s Best Banks Awards 2023 (2020-21 , 2021-22) Most Impactful Award of Excellence Women Employment Initiative of the Year By PFRDA for achieving 100% target in Indian CSR Awards 2023 for Atal Pension Yojana (APY) “AU Udyogini” initiativ
Slide 44: About AU
About us About AU Liabilities Update Other Key Updates
Slide 45: AU's Journey
AU’s Journey Started Expanded Equity Received Launched Received AD- I operations operations investment SFB Digital Bank, License from RBI from Jaipur as to from IFC License Video Banking Vehicle Maharashtra from RBI Credit Cards Financing Started Housing Finance Co in Equity Capital 2003 2008 2011 2
Slide 46: AU's Journey
AU’s Journey Touchpoints Employees Customers (in Lacs) 17% 20% 1,027 39% 38.6 919 27,817 28,320 744 22,484 27.5 647 558 17,112 20.2 474 12,623 17.2 11,151 12.3 7.5 FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23 ₹ in Crores Deposit Gross Advance* Balance She
Slide 47: AU's Journey
AU’s Journey ₹ in Crores Net Interest Income PAT Shareholders Fund 37% 37% 36% 4,425 1,428 10,977 1,130 3,234 7,514 2,365 6,275 1,909 596 600 # 1,343 382 4,377 940 292 3,163 2,281 FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 * FY21 * FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23 RoA RoE BVPS in ₹ Weighted
Slide 48: Asset quality for 6 years
Asset quality for 6 years ₹ in Crores Particulars FY18 FY19 FY20 FY21 FY22 FY23 Q2’FY24 Gross Advances 13,413 22,994 27,233 35,356 46,789 59,158 65,029 Gross NPA 270 470 458 1,503 924 981 1,245 NPA Provision (incl. floating 100 176 240 747 694 736 860 provision) Net NPA 169 295 217 755 231 245 385 G
Slide 49: Impact stories – click to listen
Impact stories – click to listen 48
Slide 50: AU's customer testimonies
AU’s customer testimonies 49
Slide 51: Learnings from last 6 years
Learnings from last 6 years Madness to Method Borrower to Customer KYC to UYC Quantity to Quality Unified Market to Differentiated approach for Core and Urban Transactional approach to Generational orientation Consistently challenging the status quo to improve customer and employee experience 50
Slide 52: Building a sustainable forever Bank
Building a sustainable forever Bank ❑ Navigated 6 years ❑ Focus on our 7 Strategic ❑ Built a Forever bank with successfully despite Priorities to deliver sustainability at its core multiple headwinds consistent outcomes ❑ Agile Bank keeping ❑ Committed to our Inclusive ❑ Complete platform build- Cus
Slide 53: 7 strategic priorities
7 strategic priorities Scale retail focused, Drive Sustainable growth Build a Tech- Strong risk sustainable, low-cost deposit from existing asset led ecosystem management & franchise products & segments controls Develop a highly Create strong Strengthen our empowered and capable brand identity ESG c
Slide 54: Shareholding pattern
Shareholding pattern KMP, Director & their relatives (Excluding Others Independent Director) Promoter & Promoter Group 2.1% 3.6% Individuals 25.5% 7.4% Foreign holding 42% Domestic holding 58% Mutual Fund 10.7% Foreign Holding 41.9% AIF 5.7% Insurance 3.1% As on 30th Sep’23 53
Slide 55: Board of Directors
Board of Directors 7 Mr. Raj Vikash Verma vos Chairman and Independent Director BUILDING TRUST Ex Held leadership positions at IMGC, CERSAL PFRDA, etr Independent Directors Executive Directors 7 4 Khan g Mr. Kamlesh Vikamsey Ms. Kavita Mr. Sanjay nispenaene Director Independent Director Independent
Slide 56: Abbreviations
Abbreviations BSBDA Basic Savings Bank Deposit A/C OPEX Operating Expenses CASA Current Account Deposits and Savings Account Deposit P&L Profit & Loss Statement CoF Cost of Fund PAT Profit After Tax CRAR Capital Adequacy Ratio PMJJBY Pradhan Mantri Jeevan Jyoti Bima Yojana DII Domestic Institutional
Slide 57: Definitions
Definitions a. Market Share Market share calculated as per the data reported by RBI for Scheduled Commercial Banks Core Markets are smaller centres in rural/semi-urban which typically have a local economy built around agriculture and b. Core Markets small businesses, and which have traditionally bee
Slide 58: 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 59: Thank You
THANK YOU For Investor queries contact (details in QR Code): Prince Tiwari Email: investorrelations@aubank.in
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