Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q4 FY2018 Earnings Presentation
43 slides from Au Small Finance Bank's earnings presentation, Apr 27, 2018
Slide 1: Investor Presentation Q4FY18 / FY18
Investor Presentation Q4FY18 / FY18 A SCHEDULED BANK I FORTUNE INDIA 500 COMPANY Retail Focused I Differentiated I Well Capitalized I Fast Growing I Customer Centric April 27, 2018
Slide 2: Table of Contents
Table of Q4FY18 / FY18 Performance Summary Contents Retail Assets & Mid & Small Corporate Snapshot Liabilities & Treasury Snapshot About AU Small Finance Bank Summary Financials & Shareholding Pattern 2
Slide 3: FY18 Key Highlights – 1st Year as a SFB
FY18 Key Highlights – 1st Year as a SFB 377 Branches1 11 States 23 Offices 292 ATMs 11,151 employees 97 Asset Centers 11,151 8,515 FY17 FY18 5.5 lakh square feet area Assets Under Active Loan 5,31,062 Deposit Deposit Base3 Disbursements2 CASA Ratio4 Management Accounts Accounts ~INR 7,923 Crore INR
Slide 4: FY18 Key Highlights – 1st Year as a SFB
FY18 Key Highlights – 1st Year as a SFB INR Crore Total Net Interest Pre-Provisioning PAT1 Balance Sheet Size Net worth Income Income Operating Profit 2,155 940 305 292 2,281 576 18,833 784 570 1,988 1,420 9,781 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 Mar-17 Mar-18 As An NBFC As a Bank As
Slide 5: FY18 Key Highlights – Smooth Transitioning in 1st Year as a SFB
FY18 Key Highlights – Smooth Transitioning in 1st Year as a SFB ▪ Commenced Banking Operations on 19th April 2017 ▪ Initial Public Offer of INR 1,913 Cr (entirely Offer for Sale); Oversubscribed by 54x; Listed on NSE & BSE ▪ Acquired Scheduled Bank Status on Nov 1, 2017 FY18 Key Highlights – 1st ▪ L
Slide 6: Q4FY18 / FY18 Performance Summary
ADVANCES & ASSET QUALITY ▪ Strong Growth maintained; Gross AUM at INR 16,038 Crore, Up 49% y-o-y ▪ Dominated by Retail Assets; Forming 81% of Gross AUM at INR 13,013 Crore, Up 41% y-o-y Q4FY18 / FY18 ▪ Highest Ever Quarterly Disbursement of INR 4,205 Crore, Up 90% y-o-y; More than 50,000 new Perform
Slide 7: Q4FY18 / FY18 Performance Summary
▪ Deposits to Advances ratio improved to 60% vs. 37% last quarter ▪ Cost of Deposits (excluding Certificate of Deposits) at 6.59% ▪ Leveraging Cross Sell on AU Bank Distribution Franchise o GI Partner – Cholamandalam - Premium Collected INR 28 Crore; 96,864 policies Q4FY18 / FY18 o HI Partner – Adit
Slide 8: Q4FY18 / FY18 Performance Summary
FINANCIAS, CAPITAL ADEQUACY & RETURN RATIOs ▪ Average AUM IRR of 14.7%; Average Cost of Funds of 8.4% ▪ Net Interest Income of INR 287 Crore for Q4FY18 and INR 940 Crore in FY18; Up 30% over Q4FY17 and 20% over FY17 respectively Q4FY18 / FY18 Performance ▪ Total Income of INR 666 Crore for Q4FY18 (U
Slide 9: Q4FY18 / FY18 Performance Summary
COMPIANCE WITH SFB GUIDELINES – STATUS Criterion Requirements Status as on Mar 31st, 2018 Branches in unbanked areas 25% of total 85 branches (including BC) in unbanked rural areas i.e. 22.5% of total banking Q4FY18 / FY18 bank branches outlets; Rest of the Unbanked Rural Branches opened before Apri
Slide 10: Steadily Improving Return Ratios despite bank transition
Steadily Improving Return Ratios despite bank transition Stable ROE in Q4FY18 vis-à-vis Q3FY18 at 14.8%; ROE at 13.7% for FY18 – 1st year of Banking operation which involved higher costs for banking transition RoA1 (%) RoE2 (%) 2.7% 20.4% 2.6% 16.6% 1.9% 14.7% 14.8% 13.7% 1.7% 1.7% Q4FY17 FY17 Q3FY1
Slide 11: Improved Asset Quality
Improved Asset Quality Movement of Gross NPA Q4FY18 Q3FY18 (INR Crore) Audited Unaudited Opening Gross NPA 286 266 Additions during the period 48 68 Reductions during the period 64 48 Gross NPA1 (closing) 270 286 Gross NPA1 Net NPA Provision Coverage Ratio 2.8% 37.2% 1.9% 2.0% 1.9% 35.4% 34.4% 1.2%
Slide 12: Adequate levels of CRAR
Adequate levels of CRAR (INR Crore) Mar-18 Mar-17 Dec-17 Audited Audited Unaudited Total Risk Weighted Assets 11,833 8,474 9,374 Tier I Capital 2,179 1,818 1,874 Tier II Capital 105 134 91 Total Capital 2,285 1,952 1,965 CRAR 19.3% 23.0% 21.0% Tier I CRAR 18.4% 21.5% 20.0% Tier II CRAR 0.9% 1.6% 1.0
Slide 13: Key Performance Matrix
Key Performance Matrix Active Loan Accounts Gross AUM1 INR Crore Disbursements INR Crore 3,58,080 4,205 3,26,947 16,038 2,80,349 13,415 10,734 2,587 2,218 Mar-17 Dec-17 Mar-18 Mar-17 Dec-17 Mar-18 Q4FY17 Q3FY18 Q4FY18 As NBFC As a Bank As NBFC As a Bank As NBFC As a Bank Asset Centers Branches2 Empl
Slide 14: Profit & Loss Statement
Profit & Loss Statement (All Figures in INR Crore) Q4FY18 Q4FY17 Y-o-Y FY18 FY17 Y-o-Y Q3FY18 Audited Unaudited Audited Audited Unaudited Income Interest Earned 532 342 56% 1,767 1,280 38% 464 Interest Expended 245 121 102% 827 496 67% 214 Net Interest Income 287 221 30% 940 784 20% 250 Other Income
Slide 15: Balance Sheet
Balance Sheet (All Figures in INR Crore) Mar 31, 2018 Mar 31, 2017 Y-o-Y Dec 31, 2017 Audited Audited Unaudited Liabilities Capital 286 284 1% 286 Employees stock options outstanding 17 6 184% Reserves and Surplus 1,978 1,697 17% 1,908 Deposits 7,923 - N.A. 3,716 Borrowings 7,639 7,120 7% 7,325 Othe
Slide 16: Way Forward
Way Forward Retail Assets, Small & Mid Corporate Assets Diversify Products Mix; Offering wider products bouquet • Continue to be Retail Assets led bank • Scale up the recently launched Housing / Home loans alongside other retail assets viz. Gold Loans, Consumer Durable Loans, Agri-SME loans. • Two W
Slide 17: Retail Assets & Mid & Small Corporate Snapshot
Q4FY18/ FY18 Performance Summary Retail Assets & Mid & Small Corporate Snapshot Liabilities & Treasury Snapshot About AU Small Finance Bank Summary Financials & Shareholding Pattern 17
Slide 18: Retail and Small & Mid-Corporate Assets Snapshot – I
Retail and Small & Mid-Corporate Assets Snapshot – I Retail Assets comprise ~81% of Gross AUM of INR Retail Assets continue to exhibit strong growth 16,038 Crore INR Crore 16,038 AUM Growth Q-o-Q Y-o-Y 19% 13,415 10,734 Total 19.6% 49.4% 13,013 11,005 Retail Bank 18.2% 40.9% 9,238 Small & Mid- 81% 1
Slide 19: Retail and Small & Mid-Corporate Assets Snapshot – II
Retail and Small & Mid-Corporate Assets Snapshot – II Consistent growth in Disbursements 10.825 Q4FY18 FY18 INR Crore Disbursement 6,730 Q-o-Q Y-o-Y Y-o-Y 7,523 Growth 4,205 Total 62.5% 89.6% 60.8% 2,218 5,570 2,588 2,837 3,303 1,744 Retail 62.6% 52.9% 35.1% 1,856 1,161 362 844 1,368 Small & Mid- Q4
Slide 20: Retail Assets Snapshot – I
Retail Assets Snapshot – I Retail Assets – Diversified Product Mix Retail Bank AUM grew by ~33% Y-o-Y; Secured Business Loans continue to exhibit strong growth 0.3% INR Crore 13,089 AUM Growth Q-o-Q Y-o-Y 11,005 6.5% 9,238 Retail 18.2% 40.9% 7,133 6,269 Wheels 13.8% 32.2% 5,396 Gross AUM 68.1% 46.4%
Slide 21: Retail Assets Snapshot - II
Retail Assets Snapshot - II Disbursement Momentum maintained in Retail Assets INR Crore 7,523 Q4FY18 FY18 5,570 Disbursement Growth Q-o-Q Y-o-Y Y-o-Y 4,435 Retail 62.6% 52.9% 35.1% 3,544 2,837 Wheels 51.3% 60.2% 25.1% 1,856 1,744 1,626 2,688 SBL MSME 80.2% 65.2% 57.8% 1,015 1,704 1,075 642 1,060 SBL
Slide 22: Diversified Wheels Book
Diversified Wheels Book Wheels AUM break up – New vs Old Wheels AUM break up – Vehicle types 0% 2% 2% 2% 2% 4% 3% 28% 28% 6% 8% 71% 22% 24% New Used/Re-Finance Trade Advance Cars Multi-Utility Vehicle Small Commercial Vehcile Sports Utility Vehicle Light Commercial Vehcile Tractor Heavy Commercial V
Slide 23: Scaling Up New Retail Foot Prints
Scaling Up New Retail Foot Prints Agriculture SME Loan Agri Enterprises Agri Infrastructure Rolled Out Disbursements Agri Projects in 6 States INR 50.23 Crore Consumer Durable Select Online Partners Online/ Paperless Vijay Sales, Croma, etc. Disbursements App Assisted Model INR 1.63 Crore Offline As
Slide 24: Small & Mid-Corporate Assets Snapshot
Small & Mid-Corporate Assets Snapshot Small & Mid-Corporate Assets AUM Break-up Good Momentum in Business Banking INR Crore 3,025 AUM Growth Q-o-Q Y-o-Y 2,410 23% Small & Mid-Corporate 25.5% 102.3% 1,527 1,496 1,333 NBFC 14.5% 175.3% Gross AUM 68.1% 46.4% 50% 555 808 Real Estate Group 9.6% 8.6% 737
Slide 25: Liabilities & Treasury Snapshot
Q4FY18 / FY18 Performance Summary Retail Assets & Mid & Small Corporate Snapshot Liabilities & Treasury Snapshot About AU Small Finance Bank Summary Financials & Shareholding Pattern 25
Slide 26: Liabilities - Branch Banking - Snapshot
Liabilities - Branch Banking - Snapshot Growing Deposit Franchise (value), CASA Ratio of 32% 43% of the Term Deposits are non- INR Crore callable Current Account Saving Account Term Deposits* Total* Q-o-Q Growth CASA RATIO (%) in Q4 6,743 CASA RATIO (%) CASA RATIO (%) CASA RATIO (%) 32% 4,609 3,617
Slide 27: Diversified Liabilities Portfolio
Diversified Liabilities Portfolio Increasing proportion of Deposits further diversifying the funding profile INR Crore 7,071 8,208 9,404 11,041 15,562 1.4% 100% 0.0% 0.2% 4.7% Money Market / CBLO / Line of 9.9% Credit / Others 90% 21.0% 17.8% 4.0% 33.7% Deposits 80% 13.2% 3.5% 6.8% 50.9% 70% 8.0% 11
Slide 28: Declining Cost of Funds & Treasury Updates
Declining Cost of Funds & Treasury Updates Incremental Funds1 being raised at relatively lower cost Improving cost of funds2 INR Cr 15,000 8.0% 7.9% 11,621 7.8% 9.6% Avg. Cost of funds 7.4% 7.6% 10,000 6,403 7.4% 7.2% 8.6% 5,000 3,851 2,241 7.2% 7.1% 7.0% 8.8% 8.4% 6.8% - 6.6% Q1FY18 H1FY18 9MFY18 F
Slide 29: About AU Small Finance Bank
Q4FY18 / FY18 Summary Performance Retail Assets & Mid & Small Corporate Snapshot Liabilities & Treasury Snapshot About AU Small Finance Bank Summary Financials & Shareholding Pattern 29
Slide 30: 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 16,038 crore which successfully transited from an Asset Financing NBFC to a SFB; star
Slide 31: 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 by 2022 coveted employer that is admired for: • That is admired as the epitome of financial • Making every customer feel supreme while being inclusion and economic
Slide 32: 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 Only AFC to Fund Manager covert into a Channel Partner Bank after NBFC – Asset Finance Company Kotak Small Finance Bank CA, SA, Deposits, Lockers, Payments & Housing Finan
Slide 33: Diversified Bouquet of Products with focus on Retail
Diversified Bouquet of Products with focus on Retail Small & Mid-Corporate – Existing Retail Assets – Existing Products Products Secured Business Loans - Secured Business Loans – Parameter Wheels (Vehicle Loans) NBFC Real Estate Group MSME SME Commenced • 1996 • 2007 • 2012 • 2012 • 2012 • Traders,
Slide 34: Well entrenched contiguous distribution franchise addressing underserved customer segments
Well entrenched contiguous distribution franchise addressing underserved customer segments 377 Branches, 11,151 358,080 Active Loan 531,062 Deposit 11 States 292 ATMs 32% CASA Ratio1 97 Asset Centers employees Accounts Accounts Deep Penetration into Core States and Expansion into other States Target
Slide 35: Customer Centricity
Customer Centricity Customer Centricity at the core of strong Asset franchisee Deep branch penetration & Hire Local Relationships with dealers & Call Centers Banking Ombudsman Personnel manufacturers • Ensures being close to the • Establish relationships and • 38 Seater call center • 65 Banking ombu
Slide 36: 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 35+ years of experience Independent Director Independent Director 29+ years of experience Master
Slide 37: Summary Financials & Shareholding Pattern
Q4FY18 / FY 18 Summary Financial Performance Retail Bank, Wholesale Bank Snapshot Liabilities & Treasury Snapshot About AU Small Finance Bank Summary Financials & Shareholding pattern 37
Slide 38: Robust Operating and Financial Performance (1/2)
Robust Operating and Financial Performance (1/2) Total Revenue and PAT Yields2 and Cost of Funds3 INR Crore Avg Yield on Gross AUM Avg cost of funds Revenue PAT 2,155 NII + OI 9.0% 7.8% 7.8% 8.1% 9.1% 9.4% 7.5% 1,419 18.3% 17.9% 17.7% 17.5% 17.1% 16.5% 1,015 11.6% 11.6% 14.7% 738 11.2% 619 10.6% 446
Slide 39: Robust Operating and Financial Performance (2/2)
Robust Operating and Financial Performance (2/2) Growth Trajectory Networth and Capital Infusion # of active INR crore loan 102,021 146,277 175,531 189,175 225,713 280,349 3,58,080 accounts Infusion 183 - 86 39 - 172 3 2,281 16,038 1,988 Gross AUM 10,734 Net Worth (INR Crore) 8,221 (INR Cr) 1,009 5,
Slide 40: Marquee Shareholders Base – As on Mar 31, 2018
Marquee Shareholders Base – As on Mar 31, 2018 Shareholding Break –up Key Non-Promoter Shareholders (Holding above 1%) Holding Other - Domestic, 4.75% Redwood Investment (Warburg Pincus) 15.74% Individual - Foreign International Finance Corporation (World Bank 7.95% Domestic, Institutions (FC, Group
Slide 41: 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 42: THANK YOU
THANK YOU Contact for Investor queries: Sunil Parnami / Hemant Sethia AU Small Finance Bank Ltd Tel: +91 141 666 0604 / +91 22 6249 0614 Email: investorrelations@aubank.in 42
Slide 43: Abbreviations
Abbreviations ALM Asset Liability Management NPA Non Performing Assets AUM Asset Under Management NSE National Stock Exchange BSE Bombay Stock Exchange OPEX Operating Expenses CASA Current Account Deposits and Savings Account Deposit PAT Profit After Tax CRAR Capital Adequacy Ratio PPOP Pre-Provisio
AU Small Finance Bank — Q4 FY2018 Earnings Presentation on 6ix