Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q1 FY20 Earnings Presentation
44 slides from Au Small Finance Bank's earnings presentation, July 2019
Slide 1: Investor Presentation Q1FY20
Investor Presentation Q1FY20 A SCHEDULED BANK I FORTUNE INDIA 500 COMPANY Retail Focused I Differentiated I Well Capitalized I Fast Growing I Customer Centric July, 2019
Slide 2: Table of Contents
Table of Contents 1. Q1FY20 Performance Summary and Key Updates 2. Retail Assets and Small & Mid Corporate Assets 3. Branch Banking 4. Treasury 5. Distribution and Financial Inclusion 6. About AU Small Finance Bank 2
Slide 3: Q1FY20 Performance Summary and Key Updates
1. Q1FY20 Performance Summary and Key Updates 3
Slide 4: Q1FY20 Key Highlights
Q1FY20 Key Highlights Growth on track; Aided by diversified and dominant secured retail portfolio ❑ AUM grew 44.0%, Disbursement rose 40% and Deposits were up ~100% Y-o-Y; Added ~1.6 lac new deposit and loan accounts in the quarter. Focus continues on growing retail assets and liabilities and being
Slide 5: Q1FY20 Key Highlights
Q1FY20 Key Highlights Maintained adequate liquidity commensurate with the market enviornment ❑ Securitized AAA rated vehicle loan pool of INR 1,336 Crores ❑ Divested 0.8% equity out of 7.2% equity stake in Aavas Financiers Limited resulting in pre-tax other income of INR 77 Crores Deepening presence
Slide 6: FY19 Highlights
FY19 Highlights 418 Branches1 , 81 Asset Centers 11 States 13 lakh Customers 12,788 employees 56 BCs, 14 Offices, 554 ATMs1 Loan Assets Under Total B/S Assets Disbursements2 Deposits4 CASA Ratio5 Management3 INR Crore INR Crore INR Crore INR Crore 25,610 33,762 19,849 4,033 17,747 19% 20,942 2,885 9
Slide 7: FY19 Key Highlights
FY19 Key Highlights Total Income Net Interest Income PAT Net-worth INR Crore INR Crore INR Crore INR Crore 190 3,361 1,168 396 Profit (after Income 77 71 tax) from (pre- tax) 1,091 from Sale of 287 Sale of part 703 stake in 2,843 part stake in 77 119 Aavas Aavas Financiers Financiers Ltd. Ltd. Q1FY1
Slide 8: Consistent Profitability
Consistent Profitability RoA1 (%) RoE2 (%) 23.3%* 2.3%* *Including Profit from 8.6% Sale of part 0.9% stake in Aavas Financiers Ltd. 1.6% 13.2% 15.3% 14.7% 1.5% 1.4% Q1FY19 Q4FY19 Q1FY20 Q1FY19 Q4FY19 Q1FY20 ROA / ROE – Components NII1 (%) Other Income3 (%) Opex1 (%) 2.5%* 4.8% 5.8% 5.1% 4.0% 3.8% 4
Slide 9: Other Income
Other Income (All Figures in INR Crore) Q1FY19 Q4FY19 Q1FY20 Break-up of Other Income Unaudited Audited Unaudited Loan Assets Processing & Other fees 46 73 67 General Banking & Deposits related fees 10 14 17 Cross Sell, Distribution related fees & others 30 13 7 PSLC Premium / Fees 10 12 10 Income f
Slide 10: Vertical-wise ROA for Q1FY20
Vertical-wise ROA for Q1FY20 Small & Mid- Retail Total Loan Total Branch Regulatory Cost Business Segments Corporate Treasury Overall Assets Assets Assets Banking (CRR, SLR & LCR) Assets Loan AUM proportion 79% 20% 100% 100% - - - - Loan AUM Growth y-o-y 49% 37% 44% 44% - - - - PAT (INR Crore) 114 2
Slide 11: Stable Asset Quality
Stable Asset Quality Credit Cost - Net Impact on P/L Q1FY19 Q4FY19 Q1FY20 (All Figures in INR Crore) Unaudited Audited Unaudited Repossession Loss 5 7 7 POS Loss 0 4 2 Less: Bad Debt Recovery -6 -9 -4 Net Credit Loss -1 2 5 Net Credit Loss (as % of Avg. Total Assets) -0% 0% 0.1% Provision on NPA 22
Slide 12: Well Capitalized
Well Capitalized (INR Crore) Jun-18^ Mar-19 Jun-19^ Unaudited Audited Unaudited Total Risk Weighted Assets 13,212 19,133 19,515 Tier I Capital 2,653 3,053 3,031 Tier II Capital 85 641 591 Total Capital 2,738 3,695 3,622 CRAR 20.7% 19.3% 18.6% Tier I CRAR 20.1% 16.0% 15.5% Tier II CRAR 0.6% 3.3% 3.0%
Slide 13: Profit & Loss Statement – Q1FY20 PAT grew 148% y-o-y
Profit & Loss Statement – Q1FY20 PAT grew 148% y-o-y (All Figures in INR Crore) Q1FY20 Q1FY19 Y-o-Y Q4FY19 Q-o-Q Unaudited Unaudited Audited Income Interest Earned 957 600 59% 877 9% Interest Expended 562 314 79% 490 15% Net Interest Income 396 287 38% 387 2% Other Income (excluding Income from Sale
Slide 14: Balance Sheet – Total Assets grew 61% y-o-y
Balance Sheet – Total Assets grew 61% y-o-y (All Figures in INR Crore) Jun 30, 2019 Jun 30, 2018 Y-o-Y Mar 31, 2019 Q-o-Q Unaudited Unaudited Audited Liabilities Capital 292 290 1% 292 0% Money received against Share Warrants 175 175 0% 175 0% Employees stock options outstanding 49 28 75% 43 13% Res
Slide 15: Marquee Shareholders Base – As on 30th Jun 2019
Marquee Shareholders Base – As on 30th Jun 2019 Shareholding Pattern Key Non-Promoter Shareholders (Holding above 1%) Holding Other - Domestic, Redwood Investment (Warburg Pincus) 6.9% 5.7% Temasek Holdings 4.8% Individual - Domestic, 8.4% Nomura 4.4% Foreign Institutions Kotak Mahindra MF (through
Slide 16: Retail Assets and Small & Mid-Corporate Assets - Snapshot
2. Retail Assets and Small & Mid- Corporate Assets - Snapshot 16
Slide 17: Retail and Small & Mid-Corporate Assets Snapshot – I
Retail and Small & Mid-Corporate Assets Snapshot – I Retail Assets comprise ~79% of Gross AUM of INR Retail Assets continues to exhibit strong growth 25,610 Crore INR Crore 25,610 1% 24,246 AUM Growth Y-o-Y Q-o-Q 1 Retail Assets 20,121 18,814 20% 17,747 Total 44.3% 5.6% Small & Mid- Corporate Assets
Slide 18: Retail and Small & Mid-Corporate Assets Snapshot – II
Retail and Small & Mid-Corporate Assets Snapshot – II Y-o-Y Growth in Disbursements maintained Incremental Yield2 on Disbursements INR Crore 5,030 16.2% 3,913 4,033 Q1 Disbursement growth 15.4% Y-o-Y Q-o-Q 15.6% 3,098 14.5% 2,885 Total 39.8% -19.8% 14.7% 2,186 13.8% Retail 41.7% -20.8% 13.3% 12.6% 6
Slide 19: Retail Assets Snapshot – I
Retail Assets Snapshot – I Retail Assets AUM 1 Break-up AUM (INR Cr) Jun-19 Growth (%) 1 Retail Assets 30-Jun-18 31-Mar-19 30-Jun-19 Y-o-Y Q-o-Q Wheels 7,713 10,224 10,812 40.2% 5.7% SBL – MSME2 5,657 7,865 8,509 50.4% 8.2% Home Loan (HL) 4 116 205 n.m. 76.4% GL + CD + PL 35 57 79 128.7% 38.1% OD Ag
Slide 20: Retail Assets Snapshot - II
Retail Assets Snapshot - II Strong Disbursement Momentum maintained in Retail Assets Retail Assets Disbursement IRR Disbursements (INR Cr) Q1FY20 Growth (%) 16.6% 1 15.8% Retail Assets Q1FY18 Q4FY19 Q1FY20 Y-o-Y Q-o-Q 15.9% 14.7% Wheels 1,358 1,909 1,727 27.2% -9.5% 15.0% SBL – MSME2 715 1,212 941 3
Slide 21: Wheels Segment-wise
Wheels Segment-wise Focus on Used Vehicle & Cash on Wheels (COW) i.e. Refinance Loans Disbursements (INR Cr) Q1FY20 Growth (%) No. of Loans Disbursed Growth (%) Wheels Q1FY18 Q4FY19 Q1FY20 Y-o-Y Q-o-Q Wheels Q1FY18 Q4FY19 Q1FY20 Y-o-Y Q-o-Q New Vehicle Loans (excluding New Vehicle Loans (excluding 9
Slide 22: Small & Mid-Corporate Assets Snapshot
Small & Mid-Corporate Assets Snapshot Q-o-Q Disbursements slowed; cautious approach across segments; focus on building Business Banking INR Crore 1,117 79 935 111 7 Disbursement Growth Y-o-Y Q-o-Q 699 98 Increasing presence in Non- Small & Mid-Corporate 33.7% -16.3% 48 Fund Based Credit Facilities,
Slide 23: Small & Mid-Corporate Assets Snapshot
Small & Mid-Corporate Assets Snapshot Small & Mid-Corporate1 AUM Yield Strong Asset Quality - GNPA GNPA of NBFC – NIL; Entire portfolio has been Current (Nil 0+ DPD) since we started the product segment in FY 11-12 15.7% 15.2% 15.2% 13.8% 2.3% 2.8% 2.4% 1.0% 0.8% 2.1% 12.8% 12.8% Jun-18 Mar-19 Jun-1
Slide 24: Small & Mid-Corporate Assets Snapshot – II NBFC Lending
Small & Mid-Corporate Assets Snapshot – II NBFC Lending NBFC Lending – granular & spread across varied asset classes 88% of the NBFC exposure is in Investment Grade No. of No. of Type of NBFC’s Exposure (%) Credit Rating Exposure (%) Customers Customers Asset Finance Co's (AFC) 92 56.8% Investment G
Slide 25: Continued ‘Cautious’ Stance on NBFC and REG
Continued ‘Cautious’ Stance on NBFC and REG ❑ Almost nil growth in NBFC and REG AUM for last four quarters Credit Risk Monitoring / Mitigation – Key Points (In INR Crores) Q2FY19 Q3FY19 Q4FY19 Q1FY20 NBFC NBFC AUM – 333 Cases 2,603 2,357 2,511 2,579 ❑ No 0+ DPD account in NBFC Vertical. Q-o-Q Growth
Slide 26: Branch Banking - Snapshot
3. Branch Banking - Snapshot 26
Slide 27: Branch Banking - Snapshot
Branch Banking - Snapshot Growing Deposit Franchise; CASA Ratio of 19% 44% of the Term Deposits are non- callable [Bulk TD – 64% non-callable] CASA RATIO (%) CASA RATIO (%) CASA RATIO (%) Total Deposit 17,079 18,060 Growth 14,656 28% 21% 13,489 19% Y-o-Y Q-o-Q 8,071 98.5% 2.2% 5,841 1,911 2,508 2,63
Slide 28: Focused on Building A Granular Retail Deposit Franchise
Focused on Building A Granular Retail Deposit Franchise Increasing Share of Retail in Savings Account (SA) Retail SA Bulk SA 2,638 2,402 2,441 2,508 11% 18% 1,911 16% 25% 26% 74% 75% 84% 89% 82% 30-Jun-18 30-Sep-18 31-Dec-18 31-Mar-19 30-Jun-19 Increasing Share of Retail in Term Deposits (TD) 14,656
Slide 29: Branch Banking – Deposit profile
Branch Banking – Deposit profile 1 1 Area-wise Deposit Distribution Diversified Deposit Build-up across States Based on Punjab Delhi Deposit 11% 9% 13% Amount Himachal Pradesh 23% 4% Maharashtra 38% 34% Based on No. of Haryana Deposit A/c’s 5% 29% 58% Gujarat 5% 39% Madhya Pradesh 4% Rajasthan 25% C
Slide 30: Treasury - Snapshot
4. Treasury - Snapshot 30
Slide 31: Diversified Liabilities Portfolio
Diversified Liabilities Portfolio Increasing proportion of Deposits further diversifying the funding profile Funding Source 30-Jun-18 30-Sep-18 31-Dec-18 31-Mar-19 30-Jun-19 Deposits + Borrowings (INR Crore) 16,874 20,699 23,508 28,036 28,856 Deposits 59.3% 62.2% 62.4% 69.3% 68.8% Refinance from FIs
Slide 32: Cost of Funds and Treasury Updates
Cost of Funds and Treasury Updates Stable cost of funds1 Incremental Funds2 raised & its Cost INR Crore 25,000 7.7% 7.6% 8.0% 7.1% Avg. Cost of funds 20,000 19,696 7.5% 7.0% Incremental 15,000 6.5% Funds Raised 8.0% 7.9% 8,529 6.0% 7.9% 7.8% 7.9% Incremental 10,000 5.5% 4,254 5,000 5.0% Cost of 4.5%
Slide 33: Distribution and Financial Inclusion
5. Distribution and Financial Inclusion 33
Slide 34: Well entrenched contiguous distribution franchise
Well entrenched contiguous distribution franchise 418 Branches1, 56 BCs, 13 lakh 5,37,053 Active Loan A/c’s & 12,788 19% CASA 11 States 554 ATMs1 81 Asset Centers Customers 10,16,116 Deposit A/c’s employees Ratio2 Deep Penetration into Core States and Expansion into other States Metro- Rural Urban S
Slide 35: Digital Channels
Digital Channels 2,00,000 TAB based paperless onboarding – SA opened 100% Increasing Digital Channel Usage; More than 1.3 lakh Internet & Mobile Banking Users 1,80,000 95% 87% 91% 87% 1,60,000 90% 4,50,000 10,000 2,000 1,856 3,86,908 9,000 1,800 4,00,000 1,40,000 85% 1,1,04,356 8,000 1,600 1,522 1,2
Slide 36: Financial Inclusion
Financial Inclusion Meeting Key Objectives of Small Finance Bank ❖Serving customers with limited or no access to organized finance; Deep understanding and strong relationship enabled by local manpower ~109% ❖ 1.3+ million customer base; More than 80% Self-employed 75% PSL ❖Paperless hassle-free bank
Slide 37: About AU Small Finance Bank
6. About AU Small Finance Bank 37
Slide 38: 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 25,610 crore which successfully transited from an Asset Financing NBFC to an SFB; sta
Slide 39: 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 40: 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 41: Experienced Board of Directors
Experienced Board of Directors Board of Directors Mr. Mannil Venugopalan Ms. Jyoti Ishwar Chandra Mr. Raj Vikash Verma Mr. Krishan Kant Rathi Independent Director Chairman and Narang Independent Director Independent Director Independent Director 35+ years of experience 29+ years of experience 47+ ye
Slide 42: 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 43: THANK YOU
THANK YOU Contact for Investor queries: Sunil Parnami / Hemant Sethia AU Small Finance Bank Ltd Tel: +91 22 6249 0607 / +91 22 6249 0614 Email: investorrelations@aubank.in 43
Slide 44: 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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