Creditaccess Grameen Ltd. · NSE:CREDITACC
Creditaccess Grameen — Q2 FY25 Earnings Presentation
43 slides from Creditaccess Grameen's earnings presentation, October 2024
Slide 1: CreditAccess Grameen Limited Q2 & H1 FY25 Investor Presentation
CreditAccess Grameen Limited Q2 & H1 FY25 Investor Presentation October 2024 www.creditaccessgrameen.in
Slide 2: Disclaimer
Disclaimer By accessing this presentation, you agree to be bound by the following terms and conditions. This presentation (which may reflect some price-sensitive information in terms of SEBI regulations and Companies Act, 2013, as amended from time to time) has been prepared by CreditAccess Grameen
Slide 3: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 3
Slide 4: Q2 FY25: Key Business Highlights
Q2 FY25: Key Business Highlights • Short-term increase in delinquencies due to – Q2 FY25 YoY% QoQ% i) Localised disruptions in repayments caused by 3rd party interventions GLP (INR Cr) 25,133 +11.8% -4.4% ii) Repayment challenges due to tight liquidity & cashflows / income Borrowers (Lakh) 49.33 +7.
Slide 5: Consistent Customer Growth & High Retention
Consistent Customer Growth & High Retention Robust Borrower Additions Borrower Vintage Borrowers (‘000) Q2 FY25 58% 21% 21% 118 583 Q1 FY25 58% 24% 18% 1,030 Q4 FY24 57% 25% 18% 4,603 4,933 Q3 FY24 56% 27% 17% Q2 FY24 55% 28% 17% Q2 FY24 Addition Write-off Attrition Q2 FY25 < 3 years 3-6 Years > 6 Y
Slide 6: Asset Quality Update (1/5)
Asset Quality Update (1/5) PAR Trend 4.9% Top 5 States % GLP PAR 0+ PAR 30+ PAR 60+ PAR 90+ Karnataka 31.4% 2.3% 1.4% 1.0% 0.7% 3.3% 2.5% Maharashtra 20.8% 4.2% 2.8% 2.1% 1.5% 1.8% 1.7% 2.4% Tamil Nadu 20.0% 6.2% 4.5% 3.4% 2.6% 1.3% 1.8% 1.2% 1.4% 6.8% 4.6% 2.9% 2.0% 1.5% 1.2% 1.4% Madhya Pradesh 0.
Slide 7: Asset Quality Update (2/5)
Asset Quality Update (2/5) Understanding Group Lending PAR: Vintage vs. Lender Overlap Analysis Portfolio % - Aug-24 Borrower Vintage with CA Grameen 0-2 2-4 4-6 >6 [CA Grameen + 4 & above]: Lender Overlap Total % years years years years • 12.6% of GL loan portfolio Unique 8.6% 4.4% 5.3% 8.3% 26.6%
Slide 8: Asset Quality Update (3/5)
Asset Quality Update (3/5) Understanding Group Lending PAR: Leverage vs. Vintage Analysis Total Borrowers [CA Grameen + 4 & above] Borrowers Borrowers % - Aug-24 Borrower Vintage with CA Grameen [CA Grameen + 4 & above] Borrower Vintage with CA Grameen Borrowers % - Aug-24 Total MFI Indebtedness 0-2
Slide 9: Asset Quality Update (4/5)
Asset Quality Update (4/5) CA Grameen’s PAR 1-180 is relatively better vs. industry, especially in the top 5 markets (accounting 85% of the overall loan portfolio) PAR 1-180 PAR 1-180 PAR 1-180 (Karnataka) (Maharashtra) (CA Grameen All Operating States excl. AP, TL) 2.8% 5.7% 4.2% 6.0% 1.8% 3.0% 2.8
Slide 10: Asset Quality Update (5/5)
Asset Quality Update (5/5) Q2 FY25 (INR Cr) Consolidated Credit Cost (INR Cr) Q2 FY25 H1 FY25 Asset Classification (dpd) EAD EAD% ECL% Opening ECL - (A) 583.6 503.4 Stage 1 0 – 15 (GL), 0 – 30 (RF) 23,627.5 96.1% 1.01% Additions (B) Stage 2 16 – 60 (GL), 31 – 90 (RF) 371.0 1.5% 57.58% - Provisions a
Slide 11: Robust Financial Performance
Robust Financial Performance Key Metrics Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Avg. New Disbursement Interest Rate % 22.0% 21.8% 21.4% 21.3% 21.3% Portfolio Yield % 21.1% 21.0% 21.0% 21.0% 21.1% Weighted Avg. Cost of Borrowing % 9.8% 9.8% 9.8% 9.8% 9.8% Marginal Cost of Borrowing % 9.6% 9.7% 9.3%
Slide 12: Performance Vs. Annual Guidance
Performance Vs. Annual Guidance FY25 Q2 FY25 H1 FY25 FY25 Revised Key Indicators Guidance Performance Performance Guidance GLP Growth % 23.0% - 24.0% 11.8% 11.8% 8.0% - 12.0% NIM % 12.8% - 12.9% 13.5% 13.3% 12.8% - 13.0% Cost-to-Income Ratio % 30.0% - 31.0% 30.6% 29.9% 30.0% - 32.0% Credit Cost (Pro
Slide 13: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 13
Slide 14: Q2 FY25: Key Performance Highlights
Q2 FY25: Key Performance Highlights Cost/Income NIM Ratio GLP Disbursements 13.5% PPOP 30.7% INR 25,133 Cr INR 4,404 Cr INR 672 Cr (+11.8% YoY) (-10.5% YoY) Wgtd. Avg. COB (+19.5% YoY) Opex/GLP Ratio 9.8% 4.6% ROA CRAR Total Total Equity GNPA*: 2.44% PAT 2.7% 26.1% INR 6,988 Cr INR 186 Cr NNPA*: 0.7
Slide 15: H1 FY25: Key Performance Highlights
H1 FY25: Key Performance Highlights Cost/Income NIM Ratio GLP Disbursements 13.3% PPOP 29.9% INR 25,133 Cr INR 8,479 Cr INR 1,381 Cr (+11.8% YoY) (-12.9% YoY) Wgtd. Avg. COB (+24.9% YoY) Opex/GLP Ratio 9.8% 4.5% ROA CRAR Total Total Equity GNPA*: 2.44% PAT 4.1% 26.1% INR 6,988 Cr INR 584 Cr NNPA*: 0
Slide 16: Q2 & H1 FY25: P&L Statement
Q2 & H1 FY25: P&L Statement Profit & Loss Statement (INR Cr) Q2 FY25 Q2 FY24 YoY% Q1 FY25 QoQ% H1 FY25 H1 FY24 YoY% FY24 Interest Income 1,417.7 1,1187.4 19.4% 1,437.2 -1.4% 2,854.9 2,292.6 24.5% 4,900.1 - Interest on Loans 1 1,396.0 1,165.9 19.7% 1,411.5 -1.1.% 2,807.6 2,252.1 24.7% 4,812.5 - Inter
Slide 17: Q2 & H1 FY25: Balance Sheet
Q2 & H1 FY25: Balance Sheet Balance Sheet (INR Cr) Q2 FY25 Q2 FY24 YoY% Q1 FY25 QoQ% H1 FY25 H1 FY24 FY24 Cash & Other Bank Balances 733.2 1,408.3 -47.9% 887.7 -17,7% 733.2 1,408.3 1,313.9 Investments 1,302.5 740.5 75.9% 1,206.9 7.9% 1,302.5 740.5 1,438.9 Loans - (Net of Impairment Loss Allowance) 2
Slide 18: Continued Business Traction with Rural Focus
Continued Business Traction with Rural Focus Gross Loan Portfolio (INR Cr) Borrowers (‘000) 11.8% 7.2% 4,918 4,984 4,933 26,714 4,693 26,304 4,603 25,133 23,382 22,488 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 www.creditaccessgrameen.in 18
Slide 19: Consistent Growth in Infrastructure
Consistent Growth in Infrastructure Branches 8.2% 1,967 1,976 2,031 1,877 1,894 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Employees Loan Officers 1.7% 0.3% 19,241 19,041 19,395 19,659 19,562 13,336 13,054 13,191 13,411 13,379 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 F
Slide 20: Robust Quarterly Performance Trend (1/2)
Robust Quarterly Performance Trend (1/2) Disbursements (INR Cr) Total Income (INR Cr) -19.4% 1,459 1,513 1,454 8,053 1,248 1,295 4,966 5,344 4,476 4,004 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Margin Analysis (%) Operating Efficiency (%) 21.1% 21.0% 21.0% 21.0
Slide 21: Robust Quarterly Performance Trend (2/2)
Robust Quarterly Performance Trend (2/2) NII, PPOP, PAT (INR Cr) Asset Quality (%) 3.53% 953 932 922 772 802 2.29% 2.44% 683 709 1.81% 1.95% 672 1.60% 563 602 1.46% 1.18% 0.77% 0.97% 1.74% 347 353 397 398 0.94% 1.13% 186 0.75% 0.60% Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q3 FY24 Q4 FY24 Q1
Slide 22: Stable Operational Efficiency
Stable Operational Efficiency GLP / Branch (INR Cr) GLP / Loan Officer (INR Cr) 13.6 13.3 2.0 2.0 12.4 1.9 12.0 12.3 1.8 1.7 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Borrowers / Branch Borrowers / Loan Officer 2,453 2,478 2,500 2,522 2,429 360 373 372 369 345 Q
Slide 23: Product Range To Meet Diverse Customer Needs
Product Range To Meet Diverse Customer Needs GLP - Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Product Mix (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total IGL 21,103 94% 21,800 93% 24,741 93% 24,076 92% 22,731 90% Family Welfare 150 1% 102 1% 82 0% 221
Slide 24: Our Network & Presence
Our Network & Presence Our Presence as on Sep-24 Uttar Pradesh 112 Branch Network Q2 FY25 % Share Q2 FY24 % Share 16 States & 1 UT 398 Districts Karnataka 354 17.4% 334 17.8% Bihar 2,031 Branches Maharashtra 308 15.2% 310 16.5% 158 Tamil Nadu 387 19.1% 384 20.5% West Bengal Madhya Pradesh 160 7.9% 1
Slide 25: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 25
Slide 26: Progressing Well on Liability Strategy
Progressing Well on Liability Strategy Diversified Liability Mix - Institution / Instrument Wise (%) Focus on dynamic liability management NBFCs - TL FIs - TL • Focus on long-term funding with strong diversification between domestic 2.7% 9.4% & foreign sources Banks - TL • Target to meet funding req
Slide 27: Stable Liquidity/ ALM Position/ Credit Ratings / ESG Ratings
Stable Liquidity/ ALM Position/ Credit Ratings / ESG Ratings Static Liquidity / ALM Position For the Month For the Financial Year Debt Diversification Q2 FY25 FY25 Particulars (INR Cr) Oct-24 Nov-24 Dec-24 (Oct-24 – FY26 Total Drawdowns 1,530 Mar-25) Domestic 100% Opening Cash & Equivalents (A) 1,92
Slide 28: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 28
Slide 29: Past Five Years Performance Track Record (1/2)
Past Five Years Performance Track Record (1/2) Gross Loan Portfolio (GLP) (INR Cr) Disbursements (INR Cr) Borrowers (‘000) CAGR CAGR CAGR 5% 22% 22% 23,134 4,910 26,714 18,539 4,055 4,264 21,031 3,912 3,824 15,466 16,599 11,996 13,587 10,389 11,011 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 F
Slide 30: Past Five Years Performance Track Record (2/2)
Past Five Years Performance Track Record (2/2) Note: Refer Annexure for definition of key ratios Margin Analysis (%) Operating Efficiency (%) Asset Quality (%) 20.9% 5.01% 19.4% 18.8% 18.3% 18.9% 4.9% 4.8% 4.9% 4.7% 4.5% 3.44% 2.78% 13.0% 1.78% 1.95% 12.2% 10.9% 11.6% 4.43% 10.7% 36.7% 38.1% 39.0% 3
Slide 31: Past Eight Years Cross Cycle Performance
Past Eight Years Cross Cycle Performance Cross-Cycle ROA (%) Cross-Cycle ROE (%) Strong Cross Cycle FY19 FY21 FY22 FY17-FY18 Performance Despite Floods, Covid Covid Demonetisation Several Crisis NBFC crisis Wave 1 Wave 2 5.6% 5.1% 5.0% 24.9% 22.2% 4.2% 3.6% Avg: 3.6% 18.0% 16.3% Avg: 15.0% 12.3% 12.
Slide 32: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Liability Strategy Cross-cycle Performance Track Record Investment Rationale www.creditaccessgrameen.in 32
Slide 33: Highly Motivated Team, Strong Management Foresight & Execution Strength
Highly Motivated Team, Strong Management Foresight & Execution Strength Management Team with Decades of Experience across Banking and Finance Industries Udaya Kumar Hebbar Ganesh Narayanan Nilesh Dalvi Managing Director Chief Executive Officer Chief Financial Officer Sudesh Puthran Firoz Anam Gurura
Slide 34: Committed to Basics Through Classical JLG Lending Model
Committed to Basics Through Classical JLG Lending Model Microfinance loans are unsecured. JLG mechanism acts as security/ loan collateral Fully aligned with new harmonized guidelines in terms of - JLG Benefits: ✓ Formulation of Board approved policies ✓ Strong group bonding ✓ Process modifications ✓
Slide 35: Focus on Customer Centricity, Loyalty & Retention
Focus on Customer Centricity, Loyalty & Retention “One of the Lowest Cost Organised Financer” - One Stop Shop providing Support to Various Lifecycle Needs of the Customer One of the lowest lending rates in MFI industry Loan Customer Centric Ticket Size Tenure Purpose Type Products (INR) (months) Div
Slide 36: Calibrated Expansion Through Contiguous District-Based Approach
Calibrated Expansion Through Contiguous District-Based Approach Systematic geography selection based on the availability of infrastructure, competition, historical performance trend, social/ economic/ political/ climate risk, growth potential Ensures consistent replication of processes/ controls Fam
Slide 37: Unique Human Capital, Internal Audit & Risk Management
Unique Human Capital, Internal Audit & Risk Management Well-Established Operational Structure Multi-Pronged Approach For Risk Management Sound Understanding of Rural Market Internal Audit (IA): 399 – team members Business Heads • IA frequency – minimum 8 times in a year at branches, 4 times at RO, •
Slide 38: Strong Internal Control Structure: Three Lines Of Defence
Strong Internal Control Structure: Three Lines Of Defence 3rd line of defence: Internal Audit team 2nd line of defence: Risk team 1st line of defence: Field & Quality Control teams Zonal Manager / State Head Zonal Manager handles 100 – 120 branches Regional / Divisional Regional Manager handles 40-5
Slide 39: Continuous Technology Enhancement to Drive Operational Efficiency
Continuous Technology Enhancement to Drive Operational Efficiency Ensures Quick And Seamless Delivery of Need Based Financial Products and Services backed by Robust Technology Infrastructure High touch-high tech delivery model: Future Upgrades & Investments • Digitised all customer touchpoints • Inv
Slide 40: Integrating Risk Management in Every Operating Process
Integrating Risk Management in Every Operating Process Microfinance is a Collection Business, hence Risk Management is Integral to Core Strategy and Operating Processes Contiguous Customer Employee Target Customer Customer Lending Employee District-based Engagement Incentive Segment Due-Diligence Mo
Slide 41: Strong Parentage & Shareholder Base
Strong Parentage & Shareholder Base Shareholding Pattern – September 2024 Others, 7.84 MF, AIF, Insurance, 14.86 Promoter Group, 66.54 FPI, 10.76 Committed to Strong Financial Support Micro Finance Business via Patient Capital • CreditAccess India B.V. (CAI) • Invested through multiple rounds of spe
Slide 42: Key Ratios: Definitions
Key Ratios: Definitions 1. Portfolio Yield = (Interest on loans – processing fees + Income from securitisation)/ Avg. quarterly on-book loans 2. Weighted Avg. COB = (Borrowing cost – finance lease charges) / Daily average borrowings (excl. Financial Liability towards Portfolio Securitized) 3. Margin
Slide 43: Thank You!
For Further Queries: Nilesh Dalvi Chief Financial Officer Contact No – 9819289131 Thank You! Email Id – nilesh.dalvi@cagrameen.in Sahib Sharma DGM – Investor Relations Contact No – 7066559383 Email Id – sahib.sharma@cagrameen.in 43 43 www.creditaccessgrameen.in