Pnb Housing Finance Limited · NSE:PNBHOUSING
Pnb Housing Finance — Investor Day (May 2024)
70 slides from Pnb Housing Finance's investor day presentation, May 22, 2024
Slide 1: Exchange filing cover letter – Investor & Analyst Day
Ref: PNBHFL/SE/EQ/FY25/24 Date: May 22, 2024 The BSE Limited, The National Stock Exchange of India Limited, Listing Department, Listing Department Phiroze Jeejeebhoy Towers, “Exchange Plaza” Dalal Street, Bandra Kurla Complex, Mumbai – 400001 Bandra (E), Mumbai – 400051 Scrip Code: 540173 Symbol: PN
Slide 2: Investor & Analyst Day Presentation
Investor & Analyst Day Presentation Public
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (the “Presentation”), which have been prepared by PNB Housing Finance Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation, directly or indirectly, in any m
Slide 4: Agenda
Agenda 01 Company Overview 02 Industry Overview 03 Business & Strategy 04 Prime & Emerging Markets Segment 05 Affordable Segment Agenda 06 Underwriting & Collections 07 Technology Update 08 Financial Performance 09 Key Takeaways 10 Annexure 3 Public
Slide 5: Company Overview
Public mar Ki Baar Company Overview
Slide 6: Back on Growth trajectory
Back on Growth trajectory Strong Growth Phase Consolidation Phase Re-entered into a balanced Growth Phase (INR Crore) Rights issue of INR 2,494 crore to support next leg of growth Highest-ever Retail 100,000+ book <10% IPO: Nov’16 raised INR 74,023 3,000 crore 68,394 65,358 24% 63,189 59,273 57,014
Slide 7: Shareholding Pattern: Increase in Institutional Shareholding
Shareholding Pattern : Increase in Institutional Shareholding 31-Mar-23 31-Mar-24 FII, MF and Bodies Corp shareholding 6.7% increased 6.6% 2.5% 4.2% 4.6% 3.4% 28.1% 1.9% 32.5% 5.3% Market Cap INR 19,234 crore* 9.8% 9.8% 9.9% Raised INR 2,494 crore via. Rights Issue in May 2023 9.9% 32.7% 32.1% No. o
Slide 8: PNB Housing Finance – At a Glance
PNB Housing Finance – At a Glance 3rd largest HFC by Loan Book(1) Punjab National Bank 300 Branches (2) Largest in terms of deposits Promoter of PNB Housing Finance With 14,000+ active channel 35+ years of operating history with 28.1% holding partners for loans and deposits >5,500 INR 65,358 crore |
Slide 9: Key Performance Update
Key Performance Update 31-Mar-22 31-Mar-24 31-Mar-22 31-Mar-24 Disbursement INR 11,246 crore INR 17,583 crore Gross NPA 8.13% 1.50% Loan Book INR 57,895 crore INR 65,358 crore Net NPA 5.06% 0.95% AUM INR 66,983 crore INR 71,243 crore ROA 1.24% 2.20% Retail (%) 87% 97% ROE 8.92% 10.90%* Loan Book Ret
Slide 10: Industry Overview
Industry Overview Public
Slide 11: Individual Housing Loan landscape in India
Individual Housing Loan landscape in India IHL Mortgage Market (INR Trillion) HFCs – Portfolio mix HFC SCB Mar’19-Dec’23 HL LAP Construction Finance Others CAGR INR 7.9 tn +14% 33.7 29.8 2% 18% 15% 10% 4% 9% 3% 3% 7% 18% 10% 15% 15% 22.8 16% 15% 18.4 18% 21% 82% 82% 67% 71% 73% 75% 82% 79% 15% 31-Ma
Slide 12: HFCs have a strong right to win in Affordable Housing
HFCs have a strong right to win in Affordable Housing Affordable focused HFCs Loan book (INR Trillion) Market share by ticket size (FY23) 13% 21% 1.00 29% 35% 47% +19% 0.86 34% 30% 0.68 38% 0.58 18% 40% 0.51 15% 0.44 36% 8% 5% 35% 34% 5% 25% 20% 12% 0-7.5L 7.5-15L 15-25L 25-50L 50L+ 31-Mar-19 31-Mar
Slide 13: Business and Strategy
Business and Strategy Public
Slide 14: Medium-term strategic priorities…
Medium-term strategic priorities… Journey so far Journey going forward: 3 Year Plan Focus on Retail business with Retail Loan Book growth Grow Retail book by 17% YoY over next 3 years of 14% in FY24; contributes 97% of the Loan Book Prime back on growth path; Set-up separate emerging Shift to high y
Slide 15: Medium-term strategic priorities…
Medium-term strategic priorities… Journey so far Journey going forward: 3 Year Plan Resolved big corporate NPA account of INR 784 crore and recovered ~INR 100 crore from written-off pool Continue to focus on recovery from written off pool in FY24 in corporate & retail book Higher efficiency and prod
Slide 16: Retail strategy ramping up well
Retail strategy ramping up well Retail Growth strategy and objectives… Leverage strong Management team New strategy focused Continue growth Focus on higher Tech focus parentage and best in with deep retail on building leading trajectory in affordable yielding emerging for operational class liabiliti
Slide 17: Leveraging Prime segment experience to grow Emerging Markets and Affordable
Leveraging Prime segment experience to grow Emerging Markets and Affordable Moving down the affordability pyramid… Experience brings advantages… Average Ticket size Yield 8-9% Super Prime Strong brand recall Pan India presence 30+ years of experience 35L 9-10% Trusted brand with long history and acr
Slide 18: Retail Business Focus Areas
Retail Business Focus Areas 31-Mar-22 31-Mar-23 31-Mar-24 137 189 300 LOAN BOOK (INR crore)* 31-Mar-22 31-Mar-23 31-Mar-24 Prime 42,380 45,671 49,828 Emerging Markets 8,140 9,662 11,688 Affordable - 138 1,790 No of Branches Prime 90 70 90 Emerging Markets 47 37 50 Affordable - 82 160 Map not to scal
Slide 19: Retail Segment Snapshot - Going Forward
Retail Segment Snapshot - Going Forward Prime Emerging Markets Affordable In House 58%: In House 65%: In House 70%: Sourcing Mix DSA 42% DSA 35% DSA 30% Sal Sal(61%) (65%):: Sal (60%) : Sal (50%) : Profile Mix SE SE(39%) (35%) SE (40%) SE (50%) INR 35 Lakh INR 25 Lakh INR 14 Lakh ATS Yield 9.0%-10.0
Slide 20: Carved out high yielding Emerging Markets Segment
Carved out high yielding Emerging Markets Segment Distribution Network Focus Area Right to win Focus on Tier II/III cities for emerging business Deep experience in retail segment: Proven track record of building high quality Dedicated 50 branches across 12 states retail loan book Separate vertical w
Slide 21: Affordable Segment Strategy
Affordable Segment Strategy Jan-23: Jul-23: Nov-23: Dec-23: Mar-24: May-24: Started with INR 5 Reached Loan Book crossed INR Expanded presence Total footprint of 160 Loan Book crossed crore disbursements disbursement run- 1,000 crore, one of the to 100 branches locations; Loan Book at INR INR 2,000
Slide 22: Retail Collection Strategy
Retail Collection Strategy Collections supported by Technology, Data & Analytics Analytics based case allocation Geo-allocation Real Time Field Force Tracking Delinquency Prediction Modelling Verticalization of Collection Team to Improve Asset Quality X-Bucket Resolution Emphasis on Recovery on Pre-
Slide 23: Corporate Book
Corporate Book Key Parameters Legacy Corporate Book Target select builders and Outstanding Book as on 31st Mar 2024 geographies INR 2,052 crore Focus on being a sole financier Reduced legacy Corporate Book Reduced Corporate Book from ~INR 18,000 crore as on 31-Mar-19 to INR 2,052 as on 31-Mar-24 Tic
Slide 24: Digital Intervention across Loan Life Cycle
Digital Intervention across Loan Life Cycle Loan Life Cycle driven by Analytics Origination Management Servicing Collections LOS LMS CRM Collection App RO App STP Chatbot Digital Collection Module Website 23 Public
Slide 25: Comfortably placed on Capital and Well diversified Resource Profile
Comfortably placed on Capital and Well diversified Resource Profile Successfully completed Capital Raise Multiple Ratings Upgrades during the year India Ratings ICRA CARE Successful completed of Right Issue in May 2023 of ~INR 2,494 Crore with ~1.21 times subscription Mar-24 AA+/Stable Mar-24 AA+/St
Slide 26: Prime & Emerging Markets Segment
Prime & Emerging Markets Segment Public
Slide 27: Retail Prime Loan book is back on Growth path
Retail Prime Loan book is back on Growth path Retail disbursement (INR Cr.) Retail runoff % Retail Loan book (INR Cr.) -26% -3% +10% 26,449 24.3% 61,516 +21% 56,137 50,520 16.4% 17.3% 15,831 10,881 FY19 FY22 FY24 FY19 FY22 FY24 FY19* FY22 FY24 *As per IGAAP …with focus on granularization and non-met
Slide 28: Growth strategy: Geographical footprint expansion and productivity improvement
Growth strategy: Geographical footprint expansion and productivity improvement 1. Branch network 2. Human Capital network Target for FY27 Wide network of Channel Partners and Prime & Emerging Markets Disbursement Employees (INR crore) +20% 4,000+ +21% ~40% 3,100+* 15,831 10,881 ~60% Active Channel M
Slide 29: Margin improvement strategy
Margin improvement strategy 2. Incremental Product mix: Increase 1. Going down affordability pyramid share of Non Housing Loan Housing Loan FY24 Non Housing Loan FY27 P Household Average loan Income ticket size (per annum) 25% 35% > INR 50 lakh HIG 65% 18 lakh 75% INR 30 - 50 lakh Prime MIG I, Marke
Slide 30: Operating model to enable growth with better control/governance
Operating model to enable growth with better control/governance Illustration - Andhra Pradesh & Telangana ✓ Separate business verticals across Sales, Credit, Operations, Collections and FCU ✓ Decentralized underwriting with presence across 100+ branches for better control and proximity to market ✓ S
Slide 31: Investments in Technology and Analytics to strengthen core
Investments in Technology and Analytics to strengthen core SUPPLIERS ✓ Omni Channel Presence Sourcing DSA DST Revamped Website Social Platforms ✓ Faster time to market Connectors Channels products SUPPLIERS ✓ Digital Enablement of Tech Sales Process V-Connect U-Connect Mobile App ACE Platforms ✓ Sea
Slide 32: Affordable Segment
Affordable Segment Public
Slide 33: 156 high potential districts identified for Affordable Segment
156 high potential districts were identified for Affordable Segment Top 50% Next 20% Next 10% Depiction of Hi-Potential market : 80% market Ticket size: Rs 5-20 lakh 100% 75% 418 ~140 out of 156 districts 25% are concentrated a HFC market in 14 states 574 disbursals <75 and account Cr 55K for ~75% o
Slide 34: Ramp-up in Affordable segment
Ramp-up in Affordable segment Distribution Network Disbursement Disbursement (INR crore) Geographical Mix FY24 645 32% 374 406 33% 25% 32% 38% 228 28% 68% 75% 68% 72% Q1FY24 Q2FY24 Q3FY24 Q4FY24 Disbursement 28% 11.5% 11.4% 11.6% 11.6% yield % Individual Housing Loan Non Housing Loan North South Wes
Slide 35: Affordable Segment – Key Metrics
Affordable Segment – Key Metrics Business Upto Date (Jan’23-Mar’24) Key Highlights Logins: 30,625 9 69% Regions Approval Rate Decisioned 26,334 (86%) 36 15 Sanctions 18,142 (69%) Clusters ATS sanction (INR lakh) INR 2,668 crore Disbursed 160 11.5% 13,321 (73%) INR 1,790 crore Branches Incremental Yi
Slide 36: Customer Profiles
Customer Profiles • Applicant is working as teacher in a Govt. primary for last 10 years. Formal Salaried • Applicant’s monthly salary is INR 62,168 and her spouse, Co-applicant is Govt. Primary teacher also working in a Private firm. PEDDAPURAM, • Assessment based on the formal income of the primar
Slide 37: Affordable Business – Salary Portfolio
Affordable Business – Salary Portfolio Govt. Salary Private Salary Cash Salary State Government : Police, Hospitals, IT, ITES Jewellers, Bakery & Chemist shops electricity Central Govt. – Defense, Railway, Post NBFCs & Banks Employee of Hotel & Restaurants office Other Undertaking – Nagar Nigam, Oth
Slide 38: Affordable Business – Self-Employed Portfolio
Affordable Business – Self-Employed Portfolio Self Employed – Formal & Professional Self Employed - Informal Driver, Transporter & Repairing shop, Doctor, Milk Dairy, Poultry, Studio, Grain merchant Account advisor etc. Optical. Kirana. Medical & Furniture shop etc. Fruit & Vegetable vendor, Gram Me
Slide 39: Prudent Underwriting – Self Employed Informal Customer Journey
Prudent Underwriting – Self Employed Informal Customer Journey Self-employed Informal Customer Journey Ambernath branch, Maharashtra Sourcing Details Customer Profile Loan Appraisal Disbursement • DST sourcing through • Self employed running a Paan • Personal Discussion conducted by BCM • Property v
Slide 40: Prudent Underwriting – Self Employed Informal Customer Journey
Prudent Underwriting – Self Employed Informal Customer Journey Self-employed Informal Customer Journey Ratlam branch, Madhya Pradesh Sourcing Details Customer Profile Loan Appraisal Disbursement • DST sourcing case • Applicant is a Tailor by profession, • Personal Discussion conducted by BCM • Prope
Slide 41: Prudent Underwriting - Salaried – Informal (Cash Salaried) Customer Journey
Prudent Underwriting - Salaried – Informal (Cash Salaried) Customer Journey Salaried – Informal (Cash Salaried) Chennai branch, Tamilnadu Sourcing Details Customer Profile Loan Appraisal Disbursement • DSA sourcing case • Age 41 yrs. 10th passed and • Personal Discussion conducted • Cost of construc
Slide 42: Shift in Product & Customer mix to improve yield
Shift in Product & Customer mix to improve yield Customer segment mix Loan Product mix Individual Housing Loan purpose mix Increased focus towards informal self- Increase in share of Self construction and Increase in share of Non-housing employed and informal salaried profiles plot purchase + self-c
Slide 43: Underwriting and Collections
Underwriting and Collections Public
Slide 44: Prudent Retail Underwriting
Prudent Retail Underwriting Automated underwriting Digital enablers Customer experience • Business Rule Management Engine APIs being used to verify the documents and (BRME) for decision making KYC: • Digital onboarding of customers. • Salaried Straight Through Process • Bank statement analyzer (STP)
Slide 45: Vigilant Retail Collections
Vigilant Retail Collections Continuous efforts to improve asset quality through multi-pronged strategy X-Bucket Pre-NPA Higher resolution in early bucket with Restrict forward flows across buckets through increased resolutions through self cure and dedicated call centres and increased rigor controll
Slide 46: Improving Asset Quality
Improving Asset Quality Overall Retail Corporate GNPA (INR Crore) 2,270 2,270 1,424 1,416 846 854 1,086 1,079 984 1,018 1,005 916 68 74 68 31- 30- 30- 31- 31- 31- 30- 30- 31- 31- 31- 30- 30- 31- 31- Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Mar-23 Jun-23 Sep-23 Dec-23 Mar
Slide 47: Technology Update
Technology Update Public
Slide 48: Tech Transformation
Tech Transformation Tech Vision PNBHFL to be a large Digital player in the HFC ecosystem collaborating and partnering with fintech, banks, market aggregators etc., leveraging synergy & scale through platforms, offering personalised products and ease of services promoting high levels of adoption. IT
Slide 49: Sales, Customer Engagement & Service Platforms
IT 2.0 – Transforming to superior tech driven capabilities Capture Basic Processing Fee E-Sign Sanction Disbursement Docs & E- Sales, Customer Engagement & Service Platforms Data Payment Letter Sign • Customer provides all • Processing Fee payment • Customer offer, counter • Customer provides NOC an
Slide 50: Sales Enablement
End to End Sales Channel Enablement Platform (DSA/RO) RO/DSA/Agent Recruitment & Planning & Performance Agent Engagement Sales & Service Learning/Skilling Onboarding Management Prospect Sales 360 View Performance 360 Product pitchbooks Training management • RO portfolio • KPI Scorecard (key products
Slide 51: Business benefits of Tech Transformation
Business benefits of Tech Transformation Transformation KPIs PNBHFL Technology Landscape 85% 5,500+ Cloud based workloads Users across functions Reduction in TAT from login to Submission Decrease in manual data entry fields by employees 300 #4 Locations supported Digitally integrated partnerships 15
Slide 52: Financial Performance
Financial Performance Public
Slide 53: Diversified & Prudent Borrowing
Diversified & Prudent Borrowing Borrowing Mix Liquidity as a % of Total Asset Total 53,040 53,655 55,057 Borrowing 2.6% 6.0% 11.3% 10.2% (INR crore) 8.8% 5.7% 9.2% 8.1% 9.8% 9.6% 5.6% 3.6% 14.4% 32.1% 32.3% 33.3% 5.8% 5.0% 4.6% 42.2% 40.2% 32.2% 31-Mar-22 31-Mar-23 31-Mar-24 31-Mar-22 31-Mar-23 31-M
Slide 54: Comfortably placed Asset Liability profile
Comfortably placed Asset Liability profile 29,518 24,492 24,805 INR crore 22,994 20,234 17,783 15,757 9,437 upto 1 Year 1-3 Years 3-5 Years >5 Years Assets Liabilities • All buckets are with-in the Board approved policy defined limits • Maintain SLR of 15.6% as on 31-Mar-24 v/s regulatory limits of
Slide 55: Key Ratios
Key Ratios Particulars FY24 FY23 FY22 Yield 10.35% 10.28% 9.42% Cost of Borrowing 8.01% 7.47% 7.30% Spread 2.34% 2.81% 2.12% NIMs 3.74% 3.73% 2.80% Improved ROA Profile driven by: • Margin Improvement GIMs 4.02% 4.06% 3.16% Opex to ATA 0.93% 0.81% 0.68% • Increase in Fee Income Credit Cost to ATA 0.
Slide 56: Way Forward
Way Forward Current (FY’24) FY’27 Incremental 28% ~ 50% Share of Emerging Markets + Affordable Loan Book ~20% ~40% Share of Emerging Markets + Affordable Gross Margin 4.02% ++ 70 bps OpEx / ATA 1.00% 6 10 bps Credit Cost 0.25% 34 RoA 2.2% 2.4% - 2.6% Upside in Recovery from write-off Pool - ++ 55 Pu
Slide 57: Human Capital
al DB. Human Capital Public
Slide 58: Human Capital
Human Capital Employer of Choice Strong Leadership (Senior level) • Diversity Ratio-16.20% • Total Experience (Avg) – 21.5 yrs • Leadership diversity ratio- 16.30% • Tenure in Company (Avg) – 5 yrs • Young Workforce: Average Age- 35 yrs • Pedigree – 79% qualified as MBA, CA & CS • Voluntary Attritio
Slide 59: Key Takeaways
Finance Limited E;Jh~?.r Ki Btittitt" Key Takeaways Public
Slide 60: Key Takeaways
Key Takeaways Growth Asset Quality • Target to reach INR 1 lakh+ crore by Mar-27(P) • Asset Quality to be Best in Class in the • Ramp up Affordable Business; to contribute 14- industry 16% of the Loan Book by Mar-27(P) • Build book with superior risk profile • Focus on Emerging Markets Segment; to c
Slide 61: Annexure
Orr ie BPE + — Annexure Public mar Ki Baar
Slide 62: Key Metrics
Key Metrics Average Yield (%) Average Cost of Borrowings (%) Spread (%) Net Interest Margin (%) 10.28% 10.35% 2.81% 3.73% 3.74% 8.01% 9.42% 7.30% 7.47% 2.34% 2.12% 2.80% FY22 FY23 FY24 FY22 FY23 FY24 FY22 FY23 FY24 FY22 FY23 FY24 Gross Interest Margin (%) Opex to ATA Ratio (%) Return on Asset (%) Re
Slide 63: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (INR Crore) FY24 FY23 FY22 Interest Income 6,742 6,199 5,822 Add: Net gain on fair value changes 35 34 111 Add: Income on derecognized (assigned) loans - 11 - Less: Finance Cost 4,261 3,899 4,064 Net Interest Income 2,516 2,346 1,869 Net Fees and othe
Slide 64: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (INR Crore) 31-Mar-24 31-Mar-23 31-Mar-22 Particulars (INR Crore) 31-Mar-24 31-Mar-23 31-Mar-22 LIABILITIES ASSETS 1 Financial Liabilities 1 Financial Assets (a) Derivative financial instruments - (a) Cash and cash equivalents 2,142 3,678 5,066 (b) Debt Securit
Slide 65: Distinguished Board of Directors
Distinguished Board of Directors Atul Kumar Goel Sunil Kaul R Chandrasekaran Non-Executive Nominee Director Non-Executive Nominee Director Independent Director Carlyle Singapore Investment Advisors Pte. Cognizant Technology Solutions India, Tata Punjab National Bank, UCO Bank, Union Bank Limited (Ma
Slide 66: Experienced and Professional Management Team
Experienced and Professional Management Team Girish Kousgi Managing Director and CEO Vinay Gupta Anujai Saxena Amit Singh Chief Financial Officer Chief Transformation Officer Chief People Officer Jatul Anand Dilip Vaitheeswaran Ajay Kumar Mohanty Chief Sales Officer - Retail Head - Internal Audit an
Slide 67: Governance
Governance Governance ` Regulations Good Practices Policies Key Features of Governance • RMC of the Board oversee the company’s Risk Management practices and approve the Risk Risk Based Management Framework of the Strategy Report Performance company Management • Executive RMC Comprising of senior me
Slide 68: Overarching ESG Framework
Overarching ESG Framework Our Motivation Ghar ki Baat Through Strong ESG, A Board ESG Oversight at Dedicated ESG team Governance Level Agenda Leadership CONSERVE RESPECT PRACTICE Empowered by Conserve Resources & Promote social equity & Practice Sustainability our ESG strategic as a “Way of life” Bo
Slide 69: Awards and Accolades
Awards and Accolades 4th Great 4th Great BW Marketing 4th Great Indian BFSI Indian BFSI Excel Awards Indian BFSI Awards – CEO Awards – – Regional Awards – Best of the Year Financial Communicatio Website Inclusion n Campaign Initiative of the Year Elets BFSI ET Edge Best Elets BFSI CXO BW Marketing C
Slide 70: Thank You
Thank You Company: PNB Housing Finance Limited CIN: L65922DL1988PLC033856 Ms. Deepika Gupta Padhi (Head-Investor Relations & Treasury) Phone: +91 124-6030500 Investor.relations@pnbhousing.com www.pnbhousing.com Public