Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — 9M FY20 Earnings Presentation
47 slides from Au Small Finance Bank's earnings presentation, Jan 23, 2020
Slide 1: Exchange filing cover letter
Ref. No. : AUSFB/SEC/2019-20/457 Date: 23rd January, 2020 To, Listing Department Department of Corporate Services, National Stock Exchange of India Limited, The BSE Limited, Exchange Plaza, Bandra Kurla Complex, Phiroz Jeejeebhoy Towers, Bandra (East), Mumbai 400051, Dalal Street, Mumbai 400001, Mah
Slide 2: Investor Presentation 9M / Q3FY20
Investor Presentation 9M / Q3FY20 A SCHEDULED BANK I FORTUNE INDIA 500 COMPANY Retail Focused I Differentiated I Well Capitalized I Fast Growing I Customer Centric January 2020
Slide 3: AU Bank – Leveraging Best of Both The Worlds
AU Bank – Leveraging Best of Both The Worlds BANK Our PULL And Strengths NBFC Possibilities DNA “ear to the ground”, agility, push and cost- Bank Brand –The biggest multiplier, a natural conscious approach Pull 24+ years of small ticket, secured lending Comprehensive suite of products and services v
Slide 4: Table of Contents
Table of Contents 1. 9M / Q3FY20 Performance Summary and Key Updates 2. Retail Assets and Small & Mid Corporate Assets 3. Branch Banking 4. Treasury 5. Distribution Network and Tech Initiatives 6. About AU Small Finance Bank 3
Slide 5: 9M / Q3FY20 Performance Summary and Key Updates
1. 9M / Q3FY20 Performance Summary and Key Updates 4
Slide 6: 9M / Q3FY20 Key Highlights
9M / Q3FY20 Key Highlights First 11 quarters of AU Bank - Building a Technology led, Customer-centric, ‘Retail Banking’ franchise ❑ Acquired nearly 1.4 Lac new customers; Customer base now expands to ~1.6 million ❑ Powered more than 76,000 vehicles, more than 13,000 small businesses; funded nearly 1
Slide 7: 9M / Q3FY20 Key Highlights
9M / Q3FY20 Key Highlights Enhanced Governance; Appointed another Independent Director; Board strength expands to 10 members ❑ Mr. V. G. Kannan joins as an Independent Director. Earlier served as MD – State Bank of India – Associates & Subsidiaries, he has more than 38 years of experience in banking
Slide 8: 9M / Q3FY20 Key Highlights
9M / Q3FY20 Key Highlights 11 States 624 Touchpoints 15.9 lakh Customers 15,308 employees Loan Assets Under Total B/S Assets Disbursements1 Deposits3 CASA Ratio4 Management2 INR Crore INR Crore INR Crore INR Crore 29,867 23,865 38,394 13,634 27,802 11,047 21,765 14,686 17% 31-Dec-18 31-Dec-19 9MFY19
Slide 9: 9M / Q3FY20 Key Highlights
9M / Q3FY20 Key Highlights Total Income Net Interest Income PAT Net-worth INR Crore INR Crore INR Crore INR Crore 552 3,625 77 Income (pre- Profit (after 71 tax) from Sale tax) from Sale 3,548 of part stake 1354 4,237 482 of part stake in Aavas in Aavas 2,404 Financiers 956 Financiers 3,035 Ltd. Ltd
Slide 10: Consistent Profitability
Consistent Profitability RoA1 (%) RoE2 (%) 2.1%* *Including 19.9%* Profit from 0.3% 2.5% Sale of part stake in Aavas Financiers Ltd. 2.0% 2.1% 1.8% 20.0% 19.6% 17.4% 1.5% 1.5% 12.8% 13.2% Q3FY19 Q2FY20 Q3FY20 9MFY19 9MFY20 Q3FY19 Q2FY20 Q3FY20 9MFY19 9MFY20 ROA / ROE – Components NII1 (%) Other Inco
Slide 11: Other Income
Other Income (All Figures in INR Crore) Q3FY19 Q2FY20 Q3FY20 Break-up of Other Income Unaudited Unaudited Unaudited Loan Assets Processing & Other fees 64 81 87 General Banking & Deposits related fees 12 15 18 Cross Sell, Distribution related fees & others 8 11 10 PSLC Premium / Fees 12 10 25 Income
Slide 12: Vertical-wise ROA for 9MFY20
Vertical-wise ROA for 9MFY20 Small & Mid Regulatory Retail Total Loan Branch Business Segments Corporate Total Assets Treasury Cost (CRR, Overall Assets Assets Banking Assets SLR & LCR) Loan AUM proportion 81% 17% 100% 100% - - - - Loan AUM Growth y-o-y 46% 8% 37% 37% - - - - PAT (INR Crore) 494 64
Slide 13: Stable Asset Quality
Stable Asset Quality Credit Cost - Net Impact on P/L Q3FY19 Q2FY20 Q3FY20 (All Figures in INR Crore) Unaudited Unaudited Unaudited Repossession Loss 5 7 11 POS Loss 2 2 4 Write off - - 2 Less: Bad Debt Recovery -4 -6 -5 Net Credit Loss 3 4 12 Net Credit Loss (as % of Avg. Total Assets) 0.04% 0.04% 0
Slide 14: Well Capitalized
Well Capitalized (INR Crore) Dec-18^ Sep-19 ^ Dec-19^ Unaudited Unaudited Unaudited Total Risk Weighted Assets 17,141 20,310 21,561 Tier I Capital 2,660 3,027 3,551 Tier II Capital 599 602 605 Total Capital 3,260 3,629 4,156 CRAR 19.0% 17.9% 19.3% Tier I CRAR 15.5% 14.9% 16.5% Tier II CRAR 3.5% 3.0%
Slide 15: Profit & Loss Statement – 9MFY20 PAT grew 83% y-o-y
Profit & Loss Statement – 9MFY20 PAT grew 83% y-o-y (All Figures in INR Crore) Q3FY20 Q3FY19 Y-o-Y 9MFY20 9MFY19 Y-o-Y Q2FY20 Q-o-Q Unaudited Unaudited Unaudited Unaudited Unaudited Income Interest Earned 1,112 788 41% 3,102 2,072 50% 1,033 8% Interest Expended 605 440 37% 1,748 1,117 57% 582 4% Net
Slide 16: Balance Sheet – Total Assets grew 38% y-o-y
Balance Sheet – Total Assets grew 38% y-o-y (All Figures in INR Crore) Dec 31, 2019 Dec 31, 2018 Y-o-Y Sep 30, 2019 Q-o-Q Unaudited Unaudited Unaudited Liabilities Capital 304 292 - 293 3% Money received against Share Warrants - 175 - 175 - Employees stock options outstanding 57 41 39% 52 9% Reserve
Slide 17: Marquee Shareholders Base – As on 31st Dec 2019
Marquee Shareholders Base – As on 31st Dec 2019 Shareholding Pattern Key Non-Promoter Shareholders (Holding above 1%) Holding Redwood Investment (Warburg Pincus) 6.9% Foreign Institutions Promoter & Temasek Holdings 4.8% (FC, FPI, FII) & NRI Promoter Group - (Non-repatriable) Domestic Kotak Mahindra
Slide 18: Retail Assets and Small & Mid-Corporate Assets - Snapshot
2. Retail Assets and Small & Mid- Corporate Assets - Snapshot 17
Slide 19: Disbursements grew 23% Y-o-Y led by ~42% Y-o-Y growth in RAs
Disbursements grew 23% Y-o-Y led by ~42% Y-o-Y growth in RAs Strong growth in granular small ticket loans including in Used, MSME Disbursement, Business Banking and Agri SME (Amount in INR Crores except ATS) Retail Assets Small and Mid Corporate Assets Total New Used & Wheels SBL- GL+CD+ OD Agnst To
Slide 20: AUM Trends – Retail Continues to Scale; NBFC continues to shrink
AUM Trends – Retail Continues to Scale; NBFC continues to shrink AUM grew 37% Y-o-Y led by 46% Y-o-Y AUM growth in Retail Assets Small and Mid Corporate (Amount in INR Crores) Retail Assets Term Assets Lending Total New Used & Wheels SBL- GL+CD OD Agnst Total Retail Agri SMC by AUM Particulars Perio
Slide 21: Continuous Improvement in Spreads and Asset Quality
Continuous Improvement in Spreads and Asset Quality Maintained AUM IRR Coupled with drop in Cost of Funds leading to improved spreads On Total Retail Assets Small and Mid Corporate Assets AUM Cost of Total Spread New Used & Wheels SBL- GL+CD+ OD Agnst Agri SMC Funds Particulars Period HL Retail REG
Slide 22: Loan Assets Cuts
Loan Assets Cuts Retail Assets – Growth Trajectory Outside of Rajasthan Amount in INR Crores 9MFY20 9MFY19 Y-o-Y Total Retail Assets Disbursements 11,172 7,885 42% Rajasthan Disbursements 4,424 3,243 36% Outside Rajasthan Disbursements 6,748 4,642 45% Overall Loan AUM - Geographically well diversifi
Slide 23: Wheels Book – Cuts
Wheels Book – Cuts Wheels AUM Break-up Wheels AUM Break-up – Vehicle Types 1% 1% 1% 13% 2% 5% 6% 27% 6% 1% 22% 11% 64% 20% 20% Cars MUVs SCVs New Used SUVs LCVs Tractor Cash on Wheels Trade Advance HCVs Cons Equipment 3Ws 2Ws TA to Dealers 22
Slide 24: REG Book – Granular, CF Focused
REG Book – Granular, CF Focused Successful Vintage of 6 Years of funding more than 31,000 units Year Cumulative # of Facilities Total Units Funded Cumulative NOCs Given Cumulative Cumulative Repayment O/S Started given / Projects Funded Across Projects Across All Projects Disbursements (INR Crore) (
Slide 25: NBFC Book – Seasoned and Diversified
NBFC Book – Seasoned and Diversified NBFC Lending spread across varied asset classes – substantially Asset Finance Co’s Cautious Approach – Constant Book, Asset Quality Maintained ❑ NBFCs having RE book have a POS of ~INR 100 Crore i.e. ~1.3% of No. of POS Deposits NBFC Type % Mix the loan AUM; it i
Slide 26: Branch Banking - Snapshot
3. Branch Banking - Snapshot 25
Slide 27: Branch Banking - Snapshot
Branch Banking - Snapshot Growing Deposit Franchise; CASA Ratio of 17% 40% of the Term Deposits are non- callable [Bulk TD – 61% non-callable] CASA RATIO (%) CASA RATIO (%) CASA RATIO (%) Total Deposit Growth 22,052 24% 16% 20,606 17% 17,275 18,309 Y-o-Y Q-o-Q 12,573 75.4% 7.0% 9,610 2,441 2,611 2,8
Slide 28: Focused on Building A Granular Retail Deposit Franchise
Focused on Building A Granular Retail Deposit Franchise Share of Retail in Savings Account (SA) Retail SA Bulk SA 2,811 2,508 2,638 2,611 2,441 18% 15% 19% 16% 11% 84% 89% 82% 85% 81% Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Increasing Share of Retail in Term Deposits (TD) Incremental Bulk TD Retail TD Re
Slide 29: Branch Banking – Deposit profile
Branch Banking – Deposit profile 1 1 Area-wise Deposit Distribution Diversified Deposit Build-up across States MADHYA HARYANA UTTAR PRADESH Based on PRADESH 3% 2% 13% Deposit HIMACHAL 4% Amount GOA PRADESH 1% 5% 23% MAHARASHTRA GUJARAT 34% 39% 5% Based on No. of Deposit 30% A/c’s 57% PUNJAB 9% 38% D
Slide 30: Deepening Customer Engagements – #BharosaApnoJaisa
Deepening Customer Engagements – #BharosaApnoJaisa 3.3Cr.+ 85Lacs+ 1.4Cr.+ Ad Impressions Users Reached Video Views #4 2.7Lacs+ Trending topic on Users engaged Twitter 29
Slide 31: Customer Engagements & Superior Value Propositions
Customer Engagements & Superior Value Propositions 30
Slide 32: Treasury - Snapshot
4. Treasury - Snapshot wet set ae 31
Slide 33: Diversified Liabilities Portfolio
Diversified Liabilities Portfolio Increasing proportion of Deposits further diversifying the funding profile Funding Source 31-Dec-18 31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 Deposits + Borrowings (INR Crore) 23,513 28,036 28,856 30,732 32,534 Deposits 62.4% 69.3% 68.8% 72.1% 73.4% Refinance from FIs
Slide 34: Cost of Funds and Treasury Updates
Cost of Funds and Treasury Updates Stable cost of funds1 Incremental Funds2 raised & its Cost INR Crore 7.5% 7.4% Avg. Cost of funds Incremental Funds Raised 8.0% Incremental Cost of 7.9% 7.9% 7.8% 19,304 7.6% 13,389 Funds Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 9MFY19 9MFY20 Treasury Update ▪ Continued
Slide 35: Distribution Network and Tech Initiatives
5. Distribution Network and Tech Initiatives 34
Slide 36: Well entrenched contiguous distribution franchise
Well entrenched contiguous distribution franchise 15.9 lakh 6,59,904 Active Loan A/c’s & 15,308 17% CASA 11 States 624 Touchpoints 310 ATMs Customers 13,99,341 Deposit A/c’s employees Ratio2 496 Branches1, 97 BCs, Deep Penetration into Core States and Expansion into other States 31 Asset Centers Met
Slide 37: Digital Channels
Digital Channels Above 90% TAB based paperless onboarding Increasing Digital Channel Usage; More than 1.7 lakh Internet & Mobile Banking Users 87% 91% 87% 98% 91% 150% 850,000 799,453 20,000 160,000 42 10,000 18,000 100% 750,000 9,000 140,000 16,000 50% 120,000 1,02,078 1,04,356 650,000 8,000 14,000
Slide 38: Tech Initiatives during the quarter
Tech Initiatives during the quarter Live with New Website 1.2x increase in website traffic & 1.9x improvement in Website lead Bharat Bill Payment System went live on website to enable customers to online make bill payment Analytics model to estimate disposable income of Customer went live. Paperless
Slide 39: About AU Small Finance Bank
6. About AU Small Finance Bank 38
Slide 40: AU BANK – tapping the unreached and unbanked segments
AU BANK – tapping the unreached and unbanked segments Overview Focused on Retail Financing with Diversified Portfolio • AU SMALL FINANCE BANK (“AU BANK” or “Company”) is a scheduled commercial bank Gross AUM of INR 29,867 crore which successfully transited from an Asset Financing NBFC to an SFB; sta
Slide 41: AU Bank awarded Golden Peacock Award
AU Bank awarded Golden Peacock Award Golden Peacock Award for Excellence in Risk Management and Special Commendation for Excellence in Corporate Governance 40
Slide 42: Vision & Mission
Vision & Mission AU Vision AU Mission • To be the world’s most trusted retail bank and To build one of India’s largest retail franchise that is coveted employer admired for: • That is admired as the epitome of financial • Making every customer feel supreme while being inclusion and economic success,
Slide 43: AU Journey - natural progression to Bank
AU Journey - natural progression to Bank FY96 to FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 INR 1000 Crore Fund Manager Investment by Channel Partner Temasek Holdings NBFC – Asset Finance Company Small Finance Bank CA, SA, Deposits, Lockers, Payments & Only
Slide 44: Experienced Board of Directors
Experienced Board of Directors Mr. Mannil Venugopalan Mr. Krishan Kant Rathi Ms. Jyoti Narang Mr. Raj Vikash Verma Chairman and Independent Director Independent Director Independent Director Independent Director 47+ years of experience 29+ years of experience 37+ years of experience 35+ years of exp
Slide 45: 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 46: THANK YOU
THANK YOU Contact for Investor queries: Sunil Parnami / Ayush Rungta / Aseem Pant AU Small Finance Bank Ltd Tel: +91 22 6249 0607 / +91 22 6249 0630 / +91 22 6249 0600 Email: investorrelations@aubank.in 45
Slide 47: Abbreviations
Abbreviations ADC Alternate Delivery Channels NII Net Interest Income AFS Available for Sale NPA Non Performing Assets ALM Asset Liability Management NSE National Stock Exchange AUM Asset Under Management OPEX Operating Expenses BSBDA Basic Savings Bank Deposit A/C P/L Profit & Loss Statement BSE Bo
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