Bandhan Bank Ltd. · NSE:BANDHANBNK
Bandhan Bank — Q2 FY2019-20 Earnings Presentation
38 slides from Bandhan Bank's earnings presentation, October 2019
Slide 1: Investor Presentation Q2 FY 2019-20
Investor Presentation Q2 FY 2019-20 October 2019
Slide 2: Disclaimer
Disclaimer • This presentation is confidential and may not be copied, published, distributed or transmitted. The information in this presentation is being provided by Bandhan Bank Limited (also referred to as ‘Bank’). By attending a meeting where this presentation is made, or by reading this present
Slide 3: Key Highlights & Strengths
Key Highlights & Strengths 3
Slide 4: Key Highlights & Strengths
Key Highlights & Strengths Bandhan Bank - Overview Snapshot of operations Q2 FY 2019-20 Completed merger with Gruh finance on 17th October, 2019; arguably one of shortest period to PAT ₹ 9.72 bn complete the merger Total Deposits ₹ 491.95 bn Loan portfolio (on book + off book) for Q2FY 19-20 gre
Slide 5: Merger update
Merger update 5
Slide 6: Completed merger with Gruh finance arguably in one of shortest period of time
Completed merger with Gruh finance arguably in one of shortest period of time Receipt of approval from Application to SEBI for NSE and BSE Filing the considering the Receipt of approval from scheme Shareholders amalgamation as a SEBI for adaptation of with approved method of complying scheme of
Slide 7: The merger with GRUH Finance completed successfully on 17 Oct, 2019
The merger with GRUH Finance completed successfully on 17 Oct, 2019 Significant expansion of footprint in Western states from Day 1 integration tasks have been successfully integration of branch networks completed Core markets for Bandhan Bank ▪ 106 Bandhan branches has been enabled with GRUH loan C
Slide 8: Core delivery model for GRUH will stay intact post merger with higher growth opportunities
Core delivery model for GRUH will stay intact post merger with higher growth opportunities Bandhan Bank will now have Housing Finance as 3rd business vertical GRUH’s core business model to stay intact 1 Same team with Housing Finance vertical Managing Director & CEO reporting to ED-Designate – Mr. C
Slide 9: The merger is expected to create significant synergy going forward
The merger is expected to create significant synergy going forward Synergy Levers Description 1 Expanding Gruh loan portfolio further through existing Bandhan branch network Revenue A & other income 2 Tap existing 2.7 Lakh+ Gruh customers1 (55% of which are salaried) for mobilizing liabilities syner
Slide 10: Microfinance Industry Insight
Microfinance Industry Insight 10
Slide 11: Huge untapped opportunity – Industry can grow 7-8 times in 5 years
Huge untapped opportunity – Industry can grow 7-8 times in 5 years from current level Microfinance Industry Potential Current 5 years hence Total Population1 (A) in crore 130 137 Total Households2 (B) in crore 26 29 Eligible Households (C=B*50%) in crore 13 14.6 Industry Average Ticket Size per borr
Slide 12: Microfinance penetration in West Bengal is lower than Tamil Nadu, Odisha and Karnataka
Microfinance penetration in West Bengal is lower at 5.88% as compared to Tamil Nadu (9.50%), Odisha (7.65%) and Karnataka (7.05%) Top 10 States Active Borrowers (in '000) Population Census 2011 (in '000) Concentration % Puducherry 133 965 13.78% Tripura 389 3,671 10.60% Tamil Nadu 6,853 72,139 9.50%
Slide 13: West Bengal is the least leveraged market among the top States
West Bengal is the least leveraged market among the top States Out of the top states, WB has the lowest number of borrowers with 4 or more lenders In the southern states of Tamil Nadu and Karnataka, higher share of borrowers (6.27% and 2.98% respectively) have multiple (4 or more) associations Sourc
Slide 14: Top 30 districts with high PAR 90+: none from West Bengal
Industry data shows that out of top 30 districts with high PAR 90+ pan-India, none are from West Bengal where Bandhan has a strong presence Top 30 districts with respect to delinquency as on March ‘19 14 Source: SIDBI Equifax Microfinance Pulse Vol II, June 2019
Slide 15: Bandhan is consistently growing its microfinance borrowers base outside of West Bengal
Bandhan is consistently growing its microfinance borrowers base outside of West Bengal Rest of India 17.7% CAGR West Bengal 60.11 55.47 8.2% CAGR 39.08 37.16 44.63 32.39 28.54 28.21 29.78 36.7 35.43 38.51 25.42 23.48 28.68 20.86 Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Sep'19 Mar'13 Mar'14 M
Slide 16: Bandhan ticket size in line with Industry given its customer vintage
Bandhan ticket size in line with Industry given its customer vintage Bandhan Rest of t the Microfinance industry4 • Number of loans per borrower • Number of loans per borrower 54% extended by industry : 1.88 extended by Bandhan : 1.01 9% • Average ticket size per loan3 : ₹ 63.4K • Average ticket siz
Slide 17: Bandhan's 18% borrower market share translates to 20% industry portfolio share
Bandhan’s 18% borrower market share translates to 20% industry portfolio share; justifiable given the vintage Borrower Share Portfolio Share Bandhan, Bandhan 18% 20% Bandhan Bandhan Rest of Industry Rest of Industry Rest of Rest of Industry, Industry 82% 80% • “Matured” customers (4th cycle and abov
Slide 18: Bandhan growth trend
Bandhan growth trend Bandhan Growth (%) 252% 153% 113% 113% 68% 56% 62% 49% 38% 39% 40% 19% 29% 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 18
Slide 19: Bandhan NPA trend
Bandhan NPA trend NPA Trend 1.2% 1.3% 1.2% 1.2% 1.0% 1.0% 1.2% 1.1% 1.0% 1.0% 1.0% 0.7% 0.6% 0.7% Analysis excludes ILFS Portfolio Mar'18 Jun'18 Sep'18 Dec'18 Mar'19 Jun'19 Sep'19 Micro Overall 19
Slide 20: Business & Financial Overview
Business & Financial Overview 20
Slide 21: Geographical Distribution
Geographical Distribution Banking Outlets Focus on serving the rural & underbanked population (Included Gruh) 3,945 4,220 4,000 Banking Outlets as on 30th September 2019* 10% 195 35% 20% 938 986 1,000 35% Metro Urban Semi Urban Rural *Basis original classification at the time of opening 3,007 3,014
Slide 22: Asset Overview
Asset Overview Advances Growth (₹ in Billion) Composition of Advances (in %) 641.86 182.29 28% 459.57 447.76 333.73 86% 87% 61% 13% 11% 14% Sep-18 Sept 19* Mar-19 Sep-18 Sep 19* Mar-19 Total Assets Gruh Non-Micro Micro Gruh *Sep 19 merged Advances including Gruh; excluding Gruh advance growth 38% Po
Slide 23: Asset Book Mix – Pre & Post Merger
Asset Book Mix – Pre & Post Merger Total Advances (₹ in Billion) 454.20 641.86 June-19 20.38 1%4% 2% 6.2 2% 5% Micro 24.74 6.57 Retail NBFC-MFI 192 NBFC-Others 16.99 5.49 86% SME 22.63 6.74 10.78 Mortgages Sep-19 Merged 391.66 391.97 Micro Retail 30% NBFC-MFI 3% 61% NBFC-Others 1% SME June 19' Sep-1
Slide 24: Micro Banking Assets
Micro Banking Assets Micro Banking Asset Growth (₹ in Billion) Number of Active Micro Borrowers (Mn) 10.1 9.49 391.97 386.15 8.2 289.74 Sep' 18 Sep' 19 March' 19 Sep' 18 Sep' 19 March' 19 Micro Loan Disbursement (₹ in Billion) 193.24 146.81 123.2 132.51 108.47 119.87 94.72 96.41 72.19 Sep-17 Dec-17
Slide 25: Non Micro Assets
Non Micro Assets Non Micro Banking Asset growth (₹ in Billion ) Product wise Advances – Non Micro (₹ in Billion) 100% 249.89 192 4.5 4.6 90% 80% 11.29 19.87 70% 61.61 43.99 60% 50% Sep' 18 Sep' 19 March 19' 17.61 18.41 40% Higher PSL Portfolio (Overall) 30% 20% 6.2 8% 24.74 18.83 10% 10.48 20.39 0%
Slide 26: Bandhan GRUH Loans
Bandhan GRUH Loans CUSTOMERS Average loan to PSL Porfolio value Salaried Self Employed Average LTV 17% PSL 44.90% 55.10% Non-PSL 71% 71% 83% 70% Sep' 19 Sep-18 Mar-19 Portfolio AVERAGE FOIR* Type of Property Ouststanding Average FOIR 1.85% 0.46% Flats 4.55% 9.96% Hosuing 30.11% Raw Mortgage Houses/B
Slide 27: Liabilities Profile
Liabilities Profile Deposits Growth (₹ in Billion) Retail to total Deposits (%) 81.62% 78.00% 77.36% 491.95 Sep' 18 Sep' 19* March' 19 329.59 TD 330.08 CASA (%) Savings Current 36.9% 40.8% 207.83 33%# 135.32 Sep-18 Sep' 19* March' 19 100.71 #Excluding Gruh Term Deposits; CASA 35% 21.05 26.55 Sep' 18
Slide 28: Financial Performance
Financial Performance Total income (₹ in Billion) PAT (₹ in Billion) Net Interest Income Other Income Total Income 19.52 9.72 4.88 55.59 Q2 FY 19 Q2 FY 20* FY19 Operating expenses to Average Assets (%) 10.63 3.71% 3.60% 2.79% 18.9 44.96 13.08 3.61 2.30 10.78 15.29 Q2 FY 19 Q2 FY 20* FY19 Q2 FY19 Q2
Slide 29: Financial Performance
Financial Performance ROAA & ROAE! Spread % ROAA ROAE Yield Cost of funds (Excl Cap.) Spread 28.3% 19.3% 15.3% 15.4% 19.0% 14.2% 8.9% 9.1% 6.3% 7.2%7.0% 6.3% 4.3% 4.8% 4.2% Q2 FY19 Q2 FY20* FY19 Q2 FY19 Q2 FY20* FY19 Cost to Income Ratio Fee Income to Total Income Ratio 33.2% 32.6% 12.6% 13.8% 30.8%
Slide 30: Financial Performance
Financial Performance Capital Adequacy Ratio NIM Tier I Tier II Total 10.2% 10.4% 8.2% 32.59% 29.20% 25.09%1 1.08% 1.32% 2.08% 31.51% 27.88% 23.01% Sep-18 Sept 19 * Mar-19 Q2 FY19 Q2 FY20 * FY19 1-Excluding current year profits; with current year profits CAR would increase to 28.45% Credit Cost Gros
Slide 31: Profit & Loss Statement (IN ₹ Billion)
Profit & Loss Statement (IN ₹ Billion) Q2 FY 20 Q2 FY 19 Particulars YoY% (Merged) (Standalone) Interest Income 26.90 16.06 67.51% Interest expenses 11.61 5.28 119.89% Net Int. Income (NII) 15.29 10.78 41.86% Non Interest Income 3.61 2.30 56.95% Total Income 18.90 13.08 44.50% Operating Expenses 5.8
Slide 32: Balance Sheet (IN ₹ Billion)
Balance Sheet (IN ₹Billion) As at As at 30th Sep 2019 31st March 2019 Change % (Merged) (Standalone) Particulars Capital & Liabilities Capital 16.27 11.93 36.38% Reserves & Surplus 123.89 100.09 23.78% Shareholder Funds 140.16 112.02 25.12% Deposits 491.95 432.32 13.79% Borrowings 165.21 5.21 3071.0
Slide 33: Credit Rating
Credit Rating Rating of Bank’s Financial Securities Amount Instrument Rating Rating Agency (₹ in Billion) CARE AA-; (Double A Minus) CARE Ratings Outlook: Credit watch with Unsecured Subordinated Non - developing implications) 1.60 Convertible Debenture [ICRA]AA (Double A; Outlook: placed on rating
Slide 34: Our Board & Management
Our Board & Management 34
Slide 35: Management Team
Experienced and professional team… Chandra Shekhar Ghosh Sudhin Choksey MD & CEO Executive Director (Designate) Founder of BFSL, has 27 years of experience in the field of 35+ years experience in financial industry. microfinance and development Previously served as Managing Director at GRUH Fi
Slide 36: Board of Directors
… backed by a strong independent Board Dr. Anup Kumar Sinha Chandra Shekhar Ghosh Part-time Chairman MD & CEO Economist with Ph.D from University of Sothern California Has significant experience in the field of microfinance Served as Professor of Economics at IIM Calcutta for 25 years Awarde
Slide 37: Awards and accolades
Awards and accolades Businessworld Magna Awards 2019 Bandhan Bank won two awards in the small size bank category at the glittering ceremony of Magna Awards 2019 organised by Businessworld magazine in Mumbai. 1. Best Bank 2. Fastest Growing Bank 'Banker of the Year' award was conferred upon Mr. Chand
Slide 38: Thank You
Thank You Investor.relations@bandhanbank.com 38