Creditaccess Grameen Ltd. · NSE:CREDITACC
Creditaccess Grameen — Q2 FY24 Earnings Presentation
36 slides from Creditaccess Grameen's earnings presentation, October 2023
Slide 1: CreditAccess Grameen Limited Q2 & H1 FY24 Investor Presentation
CreditAccess Grameen Limited Q2 & H1 FY24 Investor Presentation October 2023 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 Investment Rationale www.creditaccessgrameen.in 3
Slide 4: Q2 FY24: Key Business Highlights
Q2 FY24: Key Business Highlights Robust Business Momentum, Strong Operating Profitability, And Best In Class Asset Quality Q2 FY24 YoY% QoQ% • Healthy customer additions of 3.36 Lakh, 40% coming GLP (INR Cr) 22,488 +36.0% +3.1% from outside of the top 3 states Borrowers (Lakh) 46.03 +21.2% +4.1% Dis
Slide 5: Customer Growth Led By Robust Additions & High Retention
Customer Growth Led By Robust Additions & High Retention Robust Borrower Additions Borrower Vintage Borrowers (‘000) Q2 FY24 55% 28% 17% 205 Q1 FY24 52% 32% 16% 508 1,518 Q4 FY23 47% 36% 17% 4,603 Q3 FY23 48% 34% 18% 3,798 Q2 FY23 46% 35% 19% Q2 FY23 Addition Write-off Attrition Q2 FY24 < 3 years 3-
Slide 6: Best-In-Class Asset Quality
Best-In-Class Asset Quality PAR Trend Credit Cost (INR Cr) Q2 FY24 H1 FY24 1.5% 1.2% Opening ECL - (A) 323.7 347.8 1.2% 1.3% 1.1% 1.0% Additions (B) 1.0% 0.8% 0.9% 0.7% 0.6% - Provisions as per ECL 69.2 112.2 0.7% Reversals (on account of write-off) (C) 49.6 116.8 Q4 FY23 Q1 FY24 Q2 FY24 PAR 0 PAR 3
Slide 7: Comfortably Placed to Maintain Healthy NIMs
Comfortably Placed to Maintain Healthy NIMs Key Metrics Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Avg. New Disbursement Interest Rate % 20.8% 21.5% 21.9% 21.9% 22.0% Portfolio Yield % 19.1% 19.6% 19.7% 20.7% 21.1% Weighted Avg. Cost of Borrowing % 9.2% 9.6% 9.5% 9.6% 9.8% Marginal Cost of Borrowing %
Slide 8: Performance Vs. Annual Guidance
Performance Vs. Annual Guidance FY24 H1 FY24 Reasons For Revised Key Indicators Guidance Performance Outperformance FY24 Guidance • YoY growth is higher on a low base GLP Growth % 24.0% - 25.0% 36.0% 24.0% - 25.0% of H1 FY23 • Superior asset quality leading to minimal interest reversals • Strong con
Slide 9: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 9
Slide 10: Q2 FY24: Key Performance Highlights
Q2 FY24: Key Performance Highlights NIM Cost/Income Ratio GLP Disbursements 13.1% 31.7% PPOP INR 22,488 Cr INR 4,966 Cr INR 563 Cr (+36.0% YoY) (+13.5% YoY) Wtd. Avg. COB Opex/GLP Ratio (+68.3% YoY) 9.8% 4.7% ROA CRAR Total Total Equity GNPA: 0.77% PAT 5.6% 25.0% INR 5,798 Cr INR 347 Cr NNPA: 0.24%
Slide 11: H1 FY24: Key Performance Highlights
H1 FY24: Key Performance Highlights NIM Cost/Income Ratio GLP Disbursements 13.1% 31.3% PPOP INR 22,488 Cr INR 9,737 Cr INR 1,106 Cr (+36.0% YoY) (+49.3% YoY) Wtd. Avg. COB Opex/GLP Ratio (+77.3% YoY) 9.7% 4.6% ROA CRAR Total Total Equity GNPA: 0.77% PAT 5.7% 25.0% INR 5,798 Cr INR 696 Cr NNPA: 0.24
Slide 12: Q2 & H1 FY24: P&L Statement
Q2 & H1 FY24: P&L Statement Profit & Loss Statement (INR Cr) Q2 FY24 Q2 FY23 YoY% Q1 FY24 QoQ% H1 FY24 H1 FY23 YoY% FY23 Interest Income 1,187.4 771.3 53.9% 1,105.2 7.4% 2,292.6 1,507.6 52.1% 3,327.1 - Interest on Loans 1 1,165.9 762.1 53.0% 1,086.2 7.3% 2,252.1 1,489.7 51.2% 3,277.5 - Interest on D
Slide 13: Q2 & H1 FY24: Balance Sheet
Q2 & H1 FY24: Balance Sheet Balance Sheet (INR Cr) Q2 FY24 Q2 FY23 YoY% Q1 FY24 QoQ% H1 FY24 H1 FY23 FY23 Cash & Other Bank Balances 1,408.3 757.1 86.0% 1,303.3 8.1% 1,408.3 757.1 1,436.4 Investments 740.5 389.7 90.0% 731.2 1.3% 740.5 389.7 454.5 Loans - (Net of Impairment Loss Allowance) 20,880.1 1
Slide 14: Continued Business Traction with Rural Focus
Continued Business Traction with Rural Focus Gross Loan Portfolio (INR Cr) Borrowers (‘000) 36.0% 21.2% 22,488 21,814 21,031 4,603 4,423 4,264 17,786 16,539 3,939 3,798 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 www.creditaccessgrameen.in 14
Slide 15: Consistent Growth in Infrastructure
Consistent Growth in Infrastructure Branches 11.5% 1,826 1,877 1,727 1,786 1,684 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Employees Loan Officers 20.1% 23.2% 19,241 13,336 16,807 16,759 17,391 12,044 16,018 11,453 11,490 10,826 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q
Slide 16: Robust Quarterly Performance Trend (1/2)
Robust Quarterly Performance Trend (1/2) Disbursements (INR Cr) Total Income (INR Cr) 13.5% 1,248 1,171 7,171 1,066 910 814 4,847 4,771 4,966 4,375 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Margin Analysis (%) Operating Efficiency (%) 20.7% 21.1% 5.1% 5.0% 19.1%
Slide 17: Robust Quarterly Performance Trend (2/2)
Robust Quarterly Performance Trend (2/2) NII, PPOP, PAT (INR Cr) Asset Quality (%) 763 772 2.46% 690 2.04% 516 566 2.17% 1.78% 1.59% 1.60% 503 544 563 1.71% 334 379 1.72% 1.21% 1.34% 0.89% 297 348 347 0.77% 175 216 0.96% 0.70% 0.60% Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1
Slide 18: Stable Operational Efficiency
Stable Operational Efficiency GLP / Branch (INR Cr) GLP / Loan Officer (INR Cr) 11.8 11.9 12.0 1.8 1.8 1.7 10.3 1.6 9.8 1.5 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Borrowers / Branch Borrowers / Loan Officer 2,422 2,453 351 371 367 2,256 2,281 2,388 344 345 Q2
Slide 19: Product Range To Meet Diverse Customer Needs
Product Range To Meet Diverse Customer Needs GLP - Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Product Mix (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total (INR Cr) % of Total IGL 15,801 96% 17,054 96% 20,090 96% 20,670 95% 21,103 94% Family Welfare 185 1% 125 0.7% 67 0% 1
Slide 20: Well-Diversified Presence Across India
Well-Diversified Presence Across India Our Presence as on Sep-23 Uttar Pradesh Branch Network Q2 FY24 % Share Q2 FY23 % Share 16 States & 1 UT 84 Karnataka 334 17.8% 308 18.3% 364 Districts Bihar Maharashtra 310 16.5% 294 17.5% 1,877 Branches 148 Tamil Nadu 384 20.5% 378 22.5% West Bengal Madhya Pra
Slide 21: Progressing Well on Liability Strategy
Progressing Well on Liability Strategy Liability Mix - Institution / Instrument Wise (%) Focus on dynamic liability management NBFCs - TL • Focus on long-term funding with strong diversification between domestic 2.8% FIs - TL & foreign sources 10.7% MLD • Target to meet funding requirements through
Slide 22: Stable Liquidity/ ALM Position/ Credit Ratings
Stable Liquidity/ ALM Position/ Credit Ratings Static Liquidity / ALM Position For the Month For the Financial Year Debt Diversification Q2 FY24 Particulars (INR Cr) Oct-23 Nov-23 Dec-23 Oct-23 to Mar-24 FY25 Total Drawdowns 3,314 Opening Cash & Equivalents (A) 2,164.8 2,999.0 3,861.8 4,668.2 9,035.
Slide 23: Discussion Summary
Discussion Summary Key Business Updates Financial Results Overview Investment Rationale www.creditaccessgrameen.in 23
Slide 24: 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 JLG Benefits: of - ✓ Strong group bonding ✓ Formulation of Board approved policies ✓ Mutual support – both f
Slide 25: 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 26: Calibrated Expansion Through Contiguous District-Based Approach
Calibrated Expansion Through Contiguous District-Based Approach Systematic geography selection based on the availability of CA Grameen’s contiguous infrastructure, competition, historical performance trend, social/ district-based expansion economic/ political/ climate risk, growth potential Ensures
Slide 27: 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 Business Heads Rural Market Internal Audit (IA): • ~90% of employees are hired fresh • IA frequency – 6 times in a year at branches, 4 times
Slide 28: 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 29: 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 • Digitized all customer touchpoints • Upg
Slide 30: 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 Employee District-based Lending Model Engagement Incentive Segment Due-Dilige
Slide 31: Cross Cycle Business Resiliency
Cross Cycle Business Resiliency 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 5.1% 22.2% 5.0% 4.2% 18.0% 16.3% 3.6% Avg: 13.5% Avg: 3.3% 12.3% 12.9% 2.3% 2.2% 9.0% 0.
Slide 32: Strong Parentage & Shareholder Base
Strong Parentage & Shareholder Base Shareholding Pattern – September 2023 Others, 6.08 MF, AIF, Committed to Micro Finance Business Insurance, Promoter 15.77 Group, 66.69 • CreditAccess India B.V. (CAI) specialises in Micro & Small Enterprises financing FPI, 11.46 • Widely held shareholding base: 24
Slide 33: Past Five Years Performance Track Record (1/2)
Past Five Years Performance Track Record (1/2) Gross Loan Portfolio (GLP) (INR Cr) Disbursements Active Borrowers (‘000) CAGR CAGR CAGR 31% 23% 15% 21,031 18,539 4,264 4,055 3,912 3,824 16,599 15,466 13,587 11,996 10,389 11,011 2,470 8,221 7,159 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY19
Slide 34: 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 (%) 20.0% 5.01% 19.4% 18.8% 18.3% 18.9% 5.0% 4.9% 4.8% 4.9% 4.7% 3.44% 2.78% 12.7% 12.2% 1.78% 10.7% 10.9% 11.6% 39.0% 1.14% 4.43% 33.9% 36.7% 3
Slide 35: 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 36: Thank You!
For Further Queries: Thank You! Nilesh Dalvi SVP & Head Investor Relations Contact No – 9819289131 Email Id – nilesh.dalvi@cagrameen.in Sahib Sharma DGM – Investor Relations Contact No – 7066559383 Email Id – sahib.sharma@cagrameen.in 36 www.creditaccessgrameen.in www.creditaccessgrameen.in