Pnb Housing Finance Limited · NSE:PNBHOUSING
Pnb Housing Finance — Q1 FY20 Earnings Presentation
64 slides from Pnb Housing Finance's earnings presentation, Jul 30, 2019
Slide 1: Exchange filing cover letter for Investor Presentation
July 30, 2019 The BSE Limited, National Stock Exchange of India Limited, Listing Department, Listing Department Phiroze Jeejeebhoy Towers, "Exchange Plaza" Dalal Street, Bandra Kurla Complex, Mumbai- 400 001 Bandra (E), Mumbai - 400 051 Scrip Code: 540173 Symbol: PNBHOUSING Dear Sirs, Sub: Investor
Slide 2: Investor Presentation July 2019
Investor Presentation July 2019
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by PNB Housing Finance Ltd (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any secur
Slide 4: About PNB Housing Finance
About PNB Housing Finance Housing
Slide 5: Leading Housing Finance Company…
Leading Housing Finance Company… Disbursement Loan Assets Retail Loans INR 7,634 Crore* INR 75,933 Crore 80% of the AUM (US$ 1,103 mn) (US$ 10,970 mn) Asset Under GNPA Management 0.76% on AUM INR 88,333 Crore (US$ 12,761 mn) 0.85% on Loan Assets Average Cost of Book Value Per Share 104 branches Borr
Slide 6: …incorporated in 1988
…incorporated in 1988 • Included in MSCI Global • IPO - Raised Small Cap 2019 INR 3,000 Index Crore • AUM • AUM crossed INR 2018 crossed INR 85,000 Crore 25,000 Crore • Expanded to over 2017 100 branches • Introduced new • PAT crossed INR brand image 1,100 crores • Destimoney • Robust and 2016 Enter
Slide 7: HFC Sector well placed...
HFC Sector well placed... Housing
Slide 8: India's Mortgage Market
India’s Mortgage Market Under penetrated mortgage market, rising urbanization coupled with increase in housing demand is leading to mortgage market expansion Indian mortgage market is significantly under-penetrated Increasing urban population Mortgage to GDP Ratio (%) 40.00% 65% 63% 31.99% 32.37% 32
Slide 9: Mortgage Sector Growth: Limited Interest Rate Sensitivity
Mortgage Sector Growth: Limited Interest Rate Sensitivity 30.00% Leading Bank Home Loan Rate Overall Growth Banks Growth HFC's/NBFC's Growth 26% 25.00% 22% 22% 21% 20% 20.00% 19% 18% 17% 18% 17% 17% 15.00% 15% 15% 11% 13% 10.00% 9% 10.8% 10.0% 10.2% 10.2% 9.6% 8.7% 8.4% 8.8% 5.00% 0.00% Mar-12 Mar-1
Slide 10: Sustainable Growth of HFCs
Sustainable Growth of HFCs Portfolio Growth of HFCs Total Loan of all HFCs: INR 10.5 trillion as on Mar-19 30% 26% 26% 24% Top 5 HFCs: 82% 21% 22% 22% 20% 19% 13.9% 20% 21% 22% 15% 19% 19% 1.1% 16% 10% 1.7% 8% 1.8% 38.7% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 7.0% Other Loans Overall Portfolio Ho
Slide 11: Government Initiatives
Government Initiatives Housing
Slide 12: Growth Drivers
Growth Drivers Urbanization Improved Affordability Changing Demographics Home Buyers Developers Financers • GST rate cut from 12% to 5% on • RERA results in higher • Infrastructure status for affordable under-construction property developers accountability housing, enabling easier institutional cred
Slide 13: PMAY-CLSS
PMAY-CLSS Changes / Inclusion in the scheme effective 1-Jan-17 • Existing scheme renamed as PMAY-CLSS for EWS/LIG • Maximum tenure changed from 15 to 20 years • Scheme extended to Middle Income (MIG) available upto March 2020 Category EWS LIG MIG I MIG II Household Income (INR Lakhs per annum) 3 6 1
Slide 14: Liquidity Position
Liquidity Position Housing
Slide 15: Long Term Resource Mobilisation
Long Term Resource Mobilisation Deposits Bank Term Loan • 2nd highest deposit mobilizer • Borrowed INR 6,856 Crore during the among HFCs; monthly gross Quarter; existing relationship with 30 Bank Term Deposits mobilisation of over INR 800 Crore banks Loan Securitization Resource • Securitized INR 2,
Slide 16: Deposits
Deposits (INR Crore) Deposit Outstanding No. of Deposit Accounts 177,153 153,588 97,217 96,754 15,446 14,315 11,586 9,987 31-Mar-17 31-Mar-18 31-Mar-19 30-Jun-19 2nd Largest Deposit taking Housing Finance Company Monthly on-boarding crossed 12,000 deposit accounts 1 Crore = 10 mn 15
Slide 17: Asset Liability Maturity profile
Asset Liability Maturity profile (INR Crore) 29,512 21,659 18,008 17,947 17,234 12,839 8,870 8,625 8,489 6,061 5,253 5,173 4,108 3,975 upto 1 month 1-3 month >3-6 months >6-12 months 1-3 years 3-5 years >5 years Total Assets Total Liabilities Particulars upto 1 month 1-3 months >3-6 months >6-12 mon
Slide 18: Financial Performance of the Company
Financial Performance of the Company 17
Slide 19: Highlights – Q1FY20 vs Q1FY19
Highlights – Q1FY20 vs Q1FY19 Disbursement (INR Crore) AUM (INR Crore) NII (INR Crore) +29% +45% -22% 9,767 88,333 625 7,634 68,578 433 Q1FY19 Q1FY20* 30-Jun-18 30-Jun-19 Q1FY19 Q1FY20 *Corporate disbursement degrew by 81% (YoY) and Retail PAT (INR Crore) Opex to ATA disbursement grew by 7% (YoY) +1
Slide 20: Highlights – Q1FY20 vs Q1FY19
Highlights – Q1FY20 vs Q1FY19 Average Yield Average Cost of Borrowing Spread +100 bps +58 bps +42 bps 10.84% 8.31% 2.53% 9.84% 7.73% 2.11% Q1FY19 Q1FY20 Q1FY19 Q1FY20 Q1FY19 Q1FY20 NIM Gross Margin +40 bps +23 bps 3.14% 3.44% 3.21% 2.74% Q1FY19 Q1FY20 Q1FY19 Q1FY20 Ratios are calculated on Monthly A
Slide 21: Expected Credit Loss (ECL) Provisions
Expected Credit Loss (ECL) Provisions Classification of the Assets based on the ECL computation under Ind AS: Particulars (INR Crore) 30-Jun-19 31-Mar-19 30-Jun-18 Gross Stage 3 (GNPA) 645.1 354.86 276.6 % portfolio in Stage 3 (GNPA%) 0.85% 0.48% 0.43% ECL Provision Stage 3* 149.8 74.34 67.9 Net Sta
Slide 22: Expansion Led Growth and Unique Operating Model
Expansion Led Growth and Unique Operating Model 21
Slide 23: Business Operations
Business Operations No. of Branches Branches – Point of Sales & Services Hubs – Fountain head for Decision Making No. of Branches Unique Cities* 2 104 18 2 Geography Hub Branches 15 21 North 8 33 16 8 South 8 35 9 5 64 West 7 36 6 7 32 0 New Branches (opened in FY18, FY19 & Q1FY20)^ contribute 27 ~2
Slide 24: Consistency in Underwriting with advent of Technology
Consistency in Underwriting with advent of Technology Scalable Hub and Spoke Model Spokes Regional Hub Central Operations Customer acquisition / Underwriting Post Disbursement Operations servicing Field Investigation CPC Fountain head Fraud Control DSA DST for decision Unit making Underwriter review
Slide 25: Robust Risk Buying Processes
Robust Risk Buying Processes Underwriting to Collections Specialization Customer profiling Other mitigating 3C Approach measures • Selective approach to • 3C approach: Counsel, • Professionally customer profiling • Mark to Market policies qualified with vast with tailor made Collect and Cure mortgag
Slide 26: Strong Business growth
Strong Business growth (INR Crore) Disbursement +32% 36,079 33,195 20,639 7,634 FY17 FY18 FY19 Q1FY20 Asset 84,772 88,333 +43% 62,252 41,492 74,023 75,933 57,014 38,531 31-Mar-17 31-Mar-18 31-Mar-19 30-Jun-19 AUM Loan Assets 1 Crore = 10 mn 25
Slide 27: Lower NPAs and Adequate Credit Cost
Lower NPAs and Adequate Credit Cost Non-Performing Assets 0.85% 0.67% • Addition of one Corporate book exposure of INR 150 Crore, which was already identified and reported as exposure under remedial action 0.43% 0.43% 0.33% • Excluding the above, GNPA as on 30-Jun-19 0.33% 0.27% stood at 0.65% due t
Slide 28: Sustainable Portfolio Mix
Sustainable Portfolio Mix 27
Slide 29: Asset Under Management
Asset Under Management Consistent Product Mix Product-wise Break-up (% of AUM) (As on 30-Jun-19) Individual Housing 13% Construction Finance 18% Retail Loan Against 29% 29% 28% Property 30% 28% Retail Non-residential Premises Loans 59% 4% 3% Lease Rental Discounting 4% Corporate Term Loan Non-Housin
Slide 30: Well Balanced Growth Across Products
Well Balanced Growth Across Products Individual (INR Crore) Housing Loans 52,035 1% Home Purchase 48,915 59% of AUM 4% Residential Plot 36,549 81% 24,868 8% Residential Plot cum Constn Self Construction 6% Housing Loans Home Improvement/Extn 31-Mar-17 31-Mar-18 31-Mar-19 30-Jun-19 Construction Finan
Slide 31: Loan Assets Walk and Securitized Pool Highlights
Loan Assets Walk and Securitized Pool Highlights Asset Bridge Highlights of Securitized Pool (INR Crore) 88,333 12,400 • Securitized book (IHL and LAP) outstanding 75,933 at ~14% of AUM • Developed expertise in Securitization • Securitization done through Direct Assignment Route • Average MOB at the
Slide 32: Retail Focused Operations
Retail Focused Operations Retail segment contribute 92% of the Q1FY20 disbursement; YoY growth of 7% Retail Loans contribute 80% of the AUM Loans given as Individual Housing Loans, Loan Against Property and Non Residential Premises Loans Focus on mass housing segment; established a niche in self emp
Slide 33: Key Loan Profile
Key Loan Profile Individual Housing Loans Retail Loan Against Property INR 31 Lakh INR 47 Lakh Average Ticket Size (US$ 44.8 k) (US$ 67.9 k) Weighted Average Loan to Value (at 71% 50% Origination) Salaried vs Self- 70% : 30% 19% : 81% Employed Weighted Average 21.5 Years 13.3 Years Tenure* Primary S
Slide 34: Corporate Book @ PNB Housing Finance Limited
Corporate Book 33 @ pnb Housing Finance Limited
Slide 35: Corporate Book Summary
Corporate Book Summary Unique Corporate AUM houses ATS No. of Unique No. of Loan Product Segment % of AUM (INR Cr) INR Cr Corporate houses Accounts (US$ mn) 134.0 Construction Finance 11,236 13% 193 (19.4) 155.0 Lease Rental Discounting 2,242 3% 163 20 (22.4) 105.1 Corporate Term Loan 3,824 4% 74 (1
Slide 36: Corporate Book Risk Buying and Review Mechanism
Corporate Book Risk Buying and Review Mechanism • External valuation and legal title checks to supplement inhouse expertise Risk Buying • Centralised team with specialisation across Acquisition, Technical, Legal, Credit, Operations • Effective risk management with segregation of responsibilities • S
Slide 37: Corporate Book Approval Process
Corporate Book Approval Process CCB (Includes 3 independent Board members & Managing Director) Management Committee (Includes management, Managing Director & 1 independent Board member) Committee of Management (Managing Director, Executive Directors and CFO) Managing Director Executive Directors (Bu
Slide 38: Construction Finance Loan Stages: Risk / Pricing
Construction Finance Loan Stages Real Estate Project Lifecycle Risk / Pricing Usage, Conversion and Approvals from Land aggregation Land registration competent authorities Post Launch Apartment Inventory Stage I Stage Stage I StageIIII Stage Stage III III Stage Stage IV IV Stage Stage VV PNB Housing
Slide 39: Corporate Term Loans and Lease Rental Discounting
Corporate Term Loans and Lease Rental Discounting Corporate Term Loans Lease Rental Discounting • Constitutes 3% of AUM • Constitutes 4% of AUM • Spread across 15 reputed • Spread across 54 reputed developers developers • Presence in 8 large cities • Top 7 markets contributes over 80% • 100% of LRD
Slide 40: Corporate Book Key Exposures under Various Measures
Corporate Book Key Exposures under Various Measures 4 Key Corporate Book Exposures through Early Warning Exposures identified Issue: • Increase in FSI resulting in scope change • Slower sales due to market slowdown Weighted Signals • Aberration due to litigation Average Security Status: Coverage of
Slide 41: Operational and Financial Performance
Operational and Financial Performance 40
Slide 42: Well Diversified Resource Profile
Well Diversified Resource Profile (INR Crore) Access to a Diverse Base of Funding Relationships with multiple lending partners 7.12% 6.54% 8.45% 8.11% 30 Banks 32 Pension Funds 6.39% 7.73% 3.92% 2.47% 18.20% 21.17% 19.47% 25.86% 5.69% 5.55% 543 Provident 2 Multilateral 17.23% 18.24% Funds Agencies 1
Slide 43: Margin Analysis
Margin Analysis Average Yield Average Cost of Borrowings Spread 10.76% 10.24% 10.35% 10.84% 8.55% 8.00% 8.31% 2.54% 2.53% 7.70% 2.21% 2.35% FY17 FY18* FY19* Q1FY20* FY17 FY18* FY19* Q1FY20* FY17 FY18* FY19* Q1FY20* NIM Gross Margin 3.19% 3.14% 3.27% 3.50% 3.34% 3.44% 2.97% 2.93% FY17 FY18* FY19* Q1F
Slide 44: Operating Leverage playing out with Better Return Profile
Operating Leverage playing out with Better Return Profile Opex to ATA Ratio Cost to Income Ratio 0.73% 22.43% 0.65% 19.61% 0.61% 0.56% 17.22% 16.18% FY17 FY18* FY19* Q1FY20* FY17 FY18* FY19* Q1FY20* Return on Asset Return on Equity 1.56% 1.61% 17.44% 1.46% 1.37% 14.92% 14.20% 14.81% FY17 FY18* FY19*
Slide 45: CRAR and Gearing
CRAR and Gearing Capital to Risk Asset Ratio 21.62% 5.14% 16.67% 15.13% 3.92% 13.98% 3.09% 2.98% 16.48% 12.75% 11.00% 12.04% 31-Mar-17 31-Mar-18 31-Mar-19 30-Jun-19 Tier 2 Tier 1 Average Gearing (x) 9.30 9.36 8.72 7.60 31-Mar-17 31-Mar-18* 31-Mar-19* 30-Jun-19* Ratio is calculated on Monthly Average
Slide 46: Shareholding
Shareholding Housing
Slide 47: Shareholding
Shareholding Shareholding as on 28-Jun-19 3.9% 0.9% 2.2% 6.7% Top Shareholders 32.7% 21.4% General Atlantic Singapore Fund, Birla Sunlife MF, Franklin Templeton MF, Varde Holdings, Malabar Investments, Auburn Ltd, Vanguard, Fidelity International, SBI MF, Reliance Capital MF. 32.3% Promoters (PNB) Q
Slide 48: Detailed Financials and Valuations
Detailed Financials and Valuations 47
Slide 49: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (INR Crore) Q1 FY20 Q1 FY19 YoY Q4 FY19 QoQ FY19 FY18 YoY Interest Income 1,979.4 1,523.8 1,892.9 6,792.9 5,046.7 Add: Net gain on fair value changes 39.4 8.8 50.4 128.9 33.5 Add: Income on derecognized (assigned) loans 119.3 0.0 93.9 308.1 116.2 Less
Slide 50: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (INR Crore) 31-Mar-19 31-Mar-18 Particulars (INR Crore) 31-Mar-19 31-Mar-18 LIABILITIES ASSETS 1 Financial Liabilities 1 Financial Assets (a) Derivative financial instruments 210.8 38.6 (b) Payables (a) Cash and cash equivalents 4,034.0 2,817.0 (I) Trade Payabl
Slide 51: Saksham – Contributing to the Society
Saksham – Contributing to the Society 50
Slide 52: Glimpses of Social Interventions
Glimpses of Social Interventions Enhancing Human Potential • Partnered with The Confederation of Real Estate Developers Association of India (CREDAI) to conduct Onsite & Offsite skill enhancement training programmes for construction workers Reaching Out, Reaching Far • Collaborated with various NGOs
Slide 53: Winning Awards & Accolades
Winning Awards & Accolades Recognised as Best Bagged Gold in Won Silver for Mr. Sanjaya Gupta Conferred bronze Winner at The Brand of India 2019 ‘Home Loan Annual Report recognised as One award at the Economic Times by The Economic Provider of the Year FY2017-18 of the ‘Most SKOCH Awards Innovation
Slide 54: Management Team...
Management Team... Housing
Slide 55: …with Extensive Industry Experience
…with Extensive Industry Experience Age : 56 Years No. of Years with PNBHF : 9 Years Sanjaya Gupta Managing Director Prior Engagements : AIG, ABN Amro Bank N.V. and HDFC Limited Age : 47 Years Age : 53 Years Age : 57 Years No. of Years with No. of Years with No. of Years with PNBHF : 7 Years PNBHF :
Slide 56: …under the Aegis of a Highly Experienced Board
…under the Aegis of a Highly Experienced Board Sunil Mehta Sh. Lingam Venkata Prabhakar Sunil Kaul Shital Kumar Jain Gourav Vallabh Chairman – Non Executive Non Executive Director Non Executive Director Independent Director Independent Director Age: Age: Age: Age: Age: 59 Years 56 Years 59 Years 79
Slide 57: Corporate Governance
Corporate Governance Board of Directors It has 11 members, 3 are non-executive directors, 7 are independent directors and Managing Director Audit Committee (ACB) It has 3 members, all are independent directors Nomination and Remuneration Committee (NRC) It has 4 members, 2 are independent directors
Slide 58: Key Takeaways
Key Takeaways Strong Retail Growth in One of the Efficient Improving Cost to Distribution Network Loan Book Lowest NPA’s Borrowing Mix Income Ratio and Unique Operating amongst HFC’s Model Strong retail distribution 5th largest by Loan Assets (1) Robust Asset Quality Diverse and cost Operating lever
Slide 59: Annexure
Annexure 58 @ pnb Housing Finance Limited
Slide 60: Return to Shareholders
Return to Shareholders Earnings Per Share (INR) Dividend Per Share (INR) 71.2 9.0 9.0 50.5 6.0 36.7 27.5 3.4 FY16 FY17 FY18* FY19* FY16 FY17 FY18 FY19 Book Value Per Share (INR) 450.5 394.2 336.7 169.1 31-Mar-16 31-Mar-17 31-Mar-18* 31-Mar-19* *As per IND AS 59
Slide 61: Employee Efficiency
Employee Efficiency (INR Crore) Disbursement / Employee Loans Outstanding / Employee 28.99 49.79 51.05 24.25 24.88 45.28 21.23 39.91 FY16 FY17 FY18 FY19 31-Mar-16 31-Mar-17 31-Mar-18 31-Mar-19 Total Revenue / Employee Profitability / Employee 5.30 0.82 4.59 4.79 0.73 3.96 0.62 0.48 FY16 FY17 FY18* F
Slide 62: Glossary
Glossary ATA Average Total Assets GNPA Gross Non-Performing Asset ATS Average Ticket Size HFCs Housing Finance Companies AUM Asset Under Management LAP Loan against Property BVPS Book Value per Share LIG Low Income Group C/I Cost to Income LRD Lease Rental Discounting CRAR Capital to Risk Asset Rati
Slide 63: Formulas
Formulas Ratios Formulas Used Average Borrowings (%) Interest Expense / Average Borrowings Average Gearing Ratio (x) Average Borrowings / Average Net worth Average Yield (%) (Interest Income + Assignment Income) on Loans / Average Loan Assets Operating Expenditure(Employee Cost + Other Expenses + De
Slide 64: Thank You
Thank You Company: PNB Housing Finance Limited CIN: L65922DL1988PLC033856 Ms. Deepika Gupta Padhi (Head-Investor Relations) Phone: +91 11 23445214 Investor.relations@pnbhousing.com www.pnbhousing.com 63