Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q4 FY2021 Earnings Presentation
47 slides from Au Small Finance Bank's earnings presentation, April 2021
Slide 1: Investor Presentation
INVESTOR PRESENTATION April 2021 6/25/2021 1 Tech-led I Retail Focused I Customer Centric I Well Capitalized I Inclusive 1
Slide 2: 4 Years of Building a Customer Centric Banking Franchise
4 YEARS OF AU BANK 4 Years of Building a Customer Centric Banking Franchise! In a span of 4 years, we have made significant strides in our journey towards becoming a tech-led & retail-focused Bank providing a simpler and rewarding banking experience to our customers. Our presence in underserved reta
Slide 3: Learnings & strategy in our journey of building trust
Learnings & strategy in our journey of building trust Madness to Method Borrower to Customer KYC to UYC Quantity to Quality Unified Market to Differentiated approach for Core and Urban Consistently challenging the status quo to improve customer experience 3
Slide 4: 4 years of sustainable inclusive growth
4 years of sustainable inclusive growth (₹ ‘000 Cr) Deposits AUM Assets 37.7 51.6 36.0 30.9 42.1 24.2 32.6 26.2 16.2 18.8 19.4 10.7 9.8 7.9 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Customer A/Cs (in lakhs) Net Worth (₹ ‘000 Cr) 27.5 6.3
Slide 5: Table of Contents
Table of Contents Key Highlights Tech Update Financial Update Branch Banking Update Asset Quality Other Key Updates 5
Slide 6: 1. Key Highlights
1. Key Highlights 6
Slide 7: Resilient performance in midst of ongoing challenges
Resilient performance in midst of ongoing challenges Year of ongoing challenges in the operating environment…. Concerns over Private Banks’ National lockdown for ~2.5 Concerns over liquidity, operational stability as moratorium on deposits months mobility and asset quality placed on few Banks ...whi
Slide 8: We have emerged stronger in FY21
We have emerged stronger in FY21 Various pro-active initiatives by the Government and RBI significantly helped our customers and the financial system Employee well-being key priority with initiatives like COVID related insurance; no lay-offs, increments & bonuses disbursed Borrower-level outreach pr
Slide 9: Key highlights (FY21)
Key highlights (FY21) ₹ 17,590 Cr Disbursements1 ➢ Strong rebound in disbursement in H2 (Vehicle, SBL and Housing) ~ Flat YoY ₹ 37,712 Cr ➢ 77% of total FY21 disbursement in H2 (47% YoY growth) AUM +22% ➢ Deposits continue to scale driven by increasing brand awareness, branch expansion and ₹ 35,979
Slide 10: Continuing our progress towards becoming a tech-led bank
Continuing our progress towards becoming a tech-led bank Growing digital adoption Investing in Innovation >4 Lacs 27% ~40% 3.5 Lacs ~2.2k ~75k Internet/Mobile banking Growth in IBMB Of new deposit customers Unique users on Accounts opened UPI QRs (IBMB) users users in Q4 are on IBMB UPI with VKYC In
Slide 11: Building a Strong Foundation with Focused Strategy & Execution
Building a Strong Foundation with Focused Strategy & Execution Commercial Banking • Complete suite of Fund based and Non Fund based products • Building team in transaction banking to Home Loan drive fee revenue • Restarted on the bank platform Credit Cards & Merchant Solutions • Significant growth p
Slide 12: Well entrenched contiguous distribution franchise
Well entrenched contiguous distribution franchise 15 States and 2 UTs 744 Touchpoints 343 ATMs (729 Branches1 , 15 BCs) Break up of Branches Sr No States & UT Total Branches Distribution of Touch Points# 1 Rajasthan 318 Jammu & Kashmir 2 Madhya Pradesh 104 Punjab Himachal Pradesh 3 Gujarat 107 Harya
Slide 13: Garnering Deposits from Urban markets and disbursing in Core markets
Garnering Deposits from Urban markets and disbursing in Core markets Liabilities Break up Assets Break up Figures in parenthesis as on 31st Mar 20 26% (25%) 34% 66% (36%) Urban Markets Core Markets (64%) 74% (75%) 1% 1% 2% RAJASTHAN 3% 2% 4% MAHARASHTRA 4% 26% DELHI NCR 17% 6% PUNJAB 40% 9% GUJARAT
Slide 14: Key Financial Highlights (Q4FY21)
Key Financial Highlights (Q4FY21) 15 States and 2 UTs Touchpoints Customers Employees 744 20.2 lakh 22,484 Vs. Vs. Vs. 728 18.8 lakh 18,992 (31-Dec-20) (31-Dec-20) (31-Dec-20) Total B/S Assets Disbursements1 Loan AUM2 Deposits3 CASA Ratio4 ₹ Crore 23% Vs. 51,591 7,421 29,708 35,979 22% 37,712 (31-De
Slide 15: 2. Financial Update
2. Financial Update 15 Bees
Slide 16: Profit & Loss Statement (Q4FY21)
Profit & Loss Statement (Q4FY21) Q4FY21 Q4FY20 Y-o-Y Q3FY21 Q-o-Q (All Figures in ₹ Crore) Audited Audited Unaudited ➢ NII in Q4 impacted due to interest Income reversals of ₹ 66 Cr on account of NPA Interest Earned 1,292 1,183 9% 1,261 2% tagging of borrower accounts in Interest Expended 637 629 1%
Slide 17: Profit & Loss Statement (FY21)
Profit & Loss Statement (FY21) FY21 FY20 Y-o-Y (All Figures in ₹ Crore) Audited Audited Income ➢ NII growth of 24% driven by AUM growth Interest Earned 4,950 4,286 15% of 22% and stable spreads Interest Expended 2,585 2,377 9% Net Interest Income 2,365 1,909 24% Other Income 800 620 29% ➢ Contributi
Slide 18: Balance Sheet – Total Assets grew 22% YoY
Balance Sheet – Total Assets grew 22% YoY 31st Mar’21 31st Mar’20 Y-o-Y 31st Dec’20 Q-o-Q (All Figures in ₹ Crore) Audited Audited Unaudited Liabilities Shareholders’ Funds 6,275 4,377 43% 5,403 16% ➢ Total assets grew 22% YoY and crossed ₹ 50,000 Cr in Q4FY21 Deposits 35,979 26,164 38% 29,708 21% B
Slide 19: Breakup of Other Income
Breakup of Other Income FY21 FY20 Y-o-Y Q4FY21 Q4FY20 Y-o-Y Q3FY21 Q-o-Q (All Figures in ₹ Crore) Audited Audited Audited Audited Unaudited Loan Assets Processing & Other fees 295 316 -7% 127 84 51% 100 27% General Banking, Cross Sell & Deposits 127 102 25% 47 32 47% 34 38% related fees PSLC Premium
Slide 20: Spreads remained stable
Spreads remained stable Incremental Spreads AUM Spreads 15.2% 14.7% 14.3% 14.1% 13.9% 13.8% 8.0% 8.0% 7.9% 7.6% 7.7% 7.2% 7.2% 7.5% 6.7% 6.5% 5.8% 5.9% Q4FY20 Q3FY21 Q4FY21 Q4FY20 Q3FY21 Q4FY21 Incremental COF Disb Yield Spread AUM COF AUM Yield* Spread ➢ Both incremental spreads and AUM Spreads rem
Slide 21: FY21 Key Financial Highlights
FY21 Key Financial Highlights Total Income Net Interest Income PAT Net Worth ₹ Crore 6,402 Income (pre- 651 tax) from Sale 1,171 4,992 of part stake 2,365 6,275 86 5,750 Profit(after in Aavas 571 4,906 1909 675 tax) net of Financiers Ltd. Aavas 4,377 79 600 596 proceeds FY20 FY21 FY20 FY21 FY20 FY21
Slide 22: Profitability Trends
Profitability Trends *Including Profit from Sale of part stake in Aavas Financiers Ltd. RoE2 (%) RoA (%) 37.1%* 4.2%* 23.4%* 2.5%* 17.9%* 1.2%* 1.8%* 11.4%* 1.1% 1.4% 1.6% 1.3% 10.7% 12.2% 15.8% 12.0% 0.5% 4.5% Q4FY20 Q3FY21 Q4FY21 FY20 FY21 Q4FY20 Q3FY21 Q4FY21 FY20 FY21 ROA1 / ROE – Components NII
Slide 23: 3. Asset Quality
3. Asset Quality 23 Bees
Slide 24: Asset Quality Overview
Asset Quality Overview Gross <90 DPD Book Disbursements# ➢ GNPA increased to ₹ 1,503 Cr, 4.3% of All figures in ₹ Cr Gross NPA 90+ GNPA Advances GNPA Yield (Q4, Funded) Gross Advances vs 3.7%** in Dec-20 Wheels 13,012 714 465 249 14.7% 2,931 ➢ Increase driven by 1.5% pool of SBL-MSME 13,891 597 356
Slide 25: Loan book saw steady pullback across buckets in Q4FY21
Loan book saw steady pullback across buckets in Q4FY21 ➢ Steady pull back across buckets - ~81% of loans are current Gross Advances DPD status (0dpd) as on 31st Mar’21 – same level as 31st Mar’20 Period Current 1-30 31-60 61-90 90+ Total ➢ Collection Efficiency in Q4FY21 above pre-Covid levels Mar-2
Slide 26: ONAN pool - We expect majority of ONAN pool to regularize
ONAN pool - We expect majority of ONAN pool to regularize ➢ ~17k contracts (Gross Advances of ₹ 541 Cr) which are <90 DPD are tagged as NPA DPD Status of ONAN pool ➢ Due to Hon’ble Supreme Court’s stay (on tagging of NPAs), we had not tagged accounts which had returned to <90dpd as NPA, and given op
Slide 27: Overview of Provisions
Overview of Provisions Mar'21 Dec'20 (All Figures in ₹ Crore) No. of No. of Loans Provisions Coverage Loans Provisions Coverage Customers Customers GNPA 53,962 1,503 747 50% 41,497 1,116* 625 56% >90dpd 42,216 962 568 59% 39,391 1,017 625 62% <90dpd 11,746 541 179 33% 2,106 99 - - Restructured 6,006
Slide 28: Credit Cost Overview
Credit Cost Overview Credit Cost - Net Impact on P/L Q4FY20 Q3FY21 Q4FY21 FY21 FY20 (All Figures in ₹ Crore) Audited Unaudited Audited Audited Audited Repossession Loss 11 7 11 25 36 POS Loss 5 4 13 21 13 Write off 0 86* 0 86 2 Less: Bad Debt Recovery -6 -2 -3 -7 -20 Net Credit Loss (A) 11 95 22 125
Slide 29: 4. Tech Update
4. Tech Update 29 Bas
Slide 30: Tech continues to be a top priority
Tech continues to be a top priority ➢ Increasing digital offerings and building compelling customer 01 Digital g experience across touch-points ➢ Focus on digitization and automation of internal 02 Digitization processes to increase productivity ➢ Focus on building a future ready and secure Our Tech
Slide 31: Building compelling customer experience
Building compelling customer experience ➢ Continuing to work towards becoming a digital bank for consumers: ➢ Launched new MB super app in Q3 with a complete suite of payment and lifestyle services ➢ Adding 10+ new product and service journeys in super app for both new and existing customers (Q1’21)
Slide 32: Investing in Video Banking
Investing in Video Banking ➢ Our vision of video banking: VIDEO BANKING @ AU ➢ Its everything one can do in a branch (except cash) ➢ Not just Video KYC Transaction & Engagement ➢ Potential to be an important channel over time Acquisition Service ➢ Increased customer adoption of video calling ➢ 5G ro
Slide 33: Investing in Merchant Solutions (including UPI QR)
Investing in Merchant Solutions (including UPI QR) Developing an offering for small merchants ➢ UPI QR as the entry-point ➢ X-sell (current account, unsecured loans) ➢ Value added services Encouraging response from merchants to Bank QR ➢ ~75k merchants onboarded (>60% activation) ➢ ~15 lac transacti
Slide 34: Continued digitization and focus on building a strong team
Continued digitization and focus on building a strong team ➢ Assisted end-to-end digital journeys for key asset verticals: Digitizing loan processing ➢ For SBL – journey rolled out in Q4 ➢ For Home Loan, Wheels and Corporate LOS - to be launched in Q1 ➢ Referral app launched to automate lead managem
Slide 35: 5. Branch Banking Update
5. Branch Banking Update 35
Slide 36: Deposits Journey – Moving to a sustainable granular franchise
Deposits Journey – Moving to a sustainable granular franchise Key turning points Core Principles of our Deposit Strategy Deposit as a % of Retail Deposits external as a % of total Communication & Engagement liabilities deposit Automated Customer Life Cycle Mgmt, Virtual RMs, Newsletters April’17 (Ba
Slide 37: Building blocks in place for a strong deposit franchise
Building blocks in place for a strong deposit franchise ➢ Won APY Premier ➢ 37 new branches in ➢ New Partners-ICICI League of PFRDA Oct FY21 Prudential Life 2020 Insurance, Care ➢ Agra, Bhubaneshwar, ➢ Granular distribution Bengaluru, Hyderabad, Health Insurance Digital of Social Security Jammu, Kan
Slide 38: Offers and Engagement aiding Activation and Deepening
Offers and Engagement aiding Activation and Deepening Shopping Festival and Pre-Approved Offers Brand Partnership in FY21 Increasing engagement through Debit Card on Maruti Suzuki NEXA ➢ Focus remains on quality versus quantity – focused segmental approach, omni-channel distribution driving deeper e
Slide 39: Branch Banking - Snapshot
Branch Banking - Snapshot Growing Deposit Franchise Average Monthly Balance 33,627 in ₹ Crore in ₹ Crore 27,857 ➢ CASA grew by 28% QoQ 23,599 34,332 ➢ Bulk SA only contributes 9% of total SA 28,203 26,056 23,868 26,056 21,758 ➢ 37% of the Term Deposits are non-callable 20,080 20,080 21,758 (Bulk TD
Slide 40: 6. Other Key Updates
6. Other Key Updates 40 Beka
Slide 41: Financial & Digital Inclusion
Financial & Digital Inclusion During the year, the Bank amplified its Financial Inclusion initiatives by constituting a ‘Financial & Digital Inclusion’ department. Universal Access to Financial Services ➢ 31% of our total touchpoints/branches - 228 are in unbanked rural centres (Tier-VI, population
Slide 42: Awards & Recognitions
Awards & Recognitions ➢ Featured in D&B’s list of India’s leading BFSI and FinTech companies 2021 ➢ Featured amongst the Economic Times Best BFSI Brands – 2021 ➢ Recognised as Great Place To Work (GPTW) during Oct 2020 ➢ Runner up for the Best Digital Financial Inclusion Initiatives IBA Banking Tech
Slide 43: Experienced Board of Directors
Experienced Board of Directors Mr. Raj Vikash Verma Mr. V G Kannan Mr. Krishan Kant Rathi Chairman and Independent Director Independent Director Independent Director 40+ years of experience 38+ years of experience in Banking 35 years of experience Industry Masters in Economics, MBA (FMS), CAIIB MBA
Slide 44: Marquee Shareholders Base – As on 31st Mar 2021
Marquee Shareholders Base – As on 31st Mar 2021 Shareholding Pattern Sr No Key Shareholders Holding on 31 Mar 2021 Foreign Promoter & 1 Promoter & Promoter Group 28.5% Institutions (FC, FPI, FII) & NRI Promoter Group - (Non-repatriable), Domestic, 28.5% 2 AU Employees 3.1% 35.6% 3 Wasatch 4.7% 4 Tem
Slide 45: Thank You
THANK YOU TOPIC For Investor queries contact (details in QR Code): Prince Tiwari | Aseem Pant Email: investorrelations@aubank.in 45
Slide 46: Abbreviations
Abbreviations ALM Asset Liability Management NPA Non-Performing Assets AUM Asset Under Management OPEX Operating Expenses BSBDA Basic Savings Bank Deposit A/C P/L Profit & Loss Statement CASA Current Account Deposits and Savings Account Deposit PAT Profit After Tax CRAR Capital Adequacy Ratio QoQ Qu
Slide 47: 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
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