Fedbank Financial Services Ltd. · NSE:FEDFINA
Fedbank Financial Services — Q2 FY24 Earnings Presentation
42 slides from Fedbank Financial Services's earnings presentation, Dec 11, 2023
Slide 1: Cover letter to stock exchanges
Secretarial Department December 11, 2023 Ref. FEDFINA/ CS/ 05/ 2023-24 To, To, National Stock Exchange of India Ltd., BSE Limited, Listing Department The Corporate Relationship Dept. Exchange Plaza, C-1, Block G, Rotunda Building, Bandra Kurla Complex, Phiroze Jeejeebhoy Towers, Bandra (E), Mumbai -
Slide 2: Fedbank Financial Services Investor Presentation H1/Q2 FY24
FEDBANK FINANCIAL SERVICES INVESTOR PRESENTATION EMPOWERING EMERGING INDIA WITH EASY ACCESS TO LOANS H1 / Q2 FY24
Slide 3: Safe Harbour
Safe Harbour This presentation and the accompanying slides (‘Presentation”), which have been prepared by Fedbank Financial Services Limited or Fedfina (the "Company"), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subs
Slide 4: IPO and Listing Ceremony
IPO and Listing Ceremony Listing Date: 30th November, 2023 Stock Exchanges: NSE & BSE Total IPO Size: ₹10.9 bn Primary Size: ₹6.0 bn Secondary Size: ₹4.9 bn Secondary Pre-IPO Size: ₹3.3 bn Only listed NBFC of a listed private bank 3
Slide 5: Who we are, Our Franchise, Financial Performance
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 6: Q2FY24 Result Summary
Q2FY24 Result Summary YoY QoQ ₹ 100 bn ₹ 29 bn ₹ 578 mn ₹15 bn 84% AUM Disbursement Profit After Tax Shareholder’s Fund Secured AUM 38% 6% 28% -1% 25% 7% 19% 6% -90 bps -23 bps 607 17 AA1 19.7% 3,970 Branches States and UTs Long term rating CRAR Employees 64 23 1 1 9 bps -2 bps 621 238 2.3% 1.8% 2.4
Slide 7: Executive Summary
Executive Summary AUM crossed ₹100 bn mark in Q2’FY24,up 38% compared to ₹73 bn as on Q2FY23. Disbursals were up 28% YoY at ₹29,329 mn in Q2FY24, compared to ₹22,940 for Q2FY23. We reported highest ever quarterly PAT of ₹578 mn in Q2 FY24 up 25% when compared to ₹462 mn for Q2 FY23. RoAs for
Slide 8: Who we are, Our Franchise, Financial Performance
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 9: Our Board of Directors
Our Board of Directors Independent Directors Executive Director Non-Executive and/or Nominee Directors Balakrishnan Krishnamurthy Anil Kothuri Shyam Srinivasan Chairman & MD & CEO Non-Executive Director Independent Director Ashutosh Khajuria Gauri Shah Non-Executive Independent Director Nominee Dire
Slide 10: Experienced Management Team
Experienced Management Team Anil Kothuri MD & CEO C.V. Ganesh Siddharth K Shardul Kadam Anila Rajneesh Chief Financial Chief Operating Chief Risk Chief Human Officer Officer Officer Resource Officer Vikas Srivastava K Sureshkumar Ramchandar R Jagadeesh Rao CBO – Mortgage CBO – Mortgage CBO – CBO - G
Slide 11: Shareholding Pattern
Shareholding Pattern Shareholding Pattern as on 1st December 2023 Top Institutional Shareholders : 1st December 2023 Others 16.5% Investor Details % Holding FIIs Federal Bank Ltd 61.7 3.5% MFs 2.1% True North Fund VI LLP 8.8 Insurance Cos 7.3% Federal Bank SBI Life Insurance 2.5 61.7% True North Fun
Slide 12: Our Growth Journey
Our Growth Journey Delivery: FY23 onwards.. • AUM: ₹100 bn (Q2 FY23) Scale-up : FY20 – FY22 • Branches: 607 (Q2 FY23) • Employees: 3,970 (FY22) • AUM: ₹62 bn (FY22) Initial public offering • Branches: 516 (FY22) of ₹10.9 Bn Foundation : FY16 – FY19 100 • Employees: 2,855 (FY22) 91 • AUM: ₹20 bn (FY1
Slide 13: Transformational Journey - Over the years
Transformational Journey - Over the years FY19 FY23 Operational Parameters No. of Branches 149 3.9 x 575 No. of Employees 964 3.7 x 3,570 Disbursement (₹ mn) 19,686 5.5 x 1,07,487 Disbursement per Branch p.a. (₹ mn) 132 1.4 x 187 Disbursement per Employee p.a. (₹ mn) 20 1.5 x 30 Financial Parameters
Slide 14: Our Historical Performance
Our Historical Performance Particulars (in ₹Mn) FY19 FY20 FY21 FY22 FY23 CAGR Operational Information Number of Branches 149 303 359 516 575 Loan Disbursals 19,686 43,795 58,937 74,698 1,07,487 AUM 20,193 38,382 48,624 61,872 90,696 46% Number of Employees 964 1,890 2,125 2,855 3,570 Financial Infor
Slide 15: Our Vision & Values
Our Vision & Values Vision Empower Emerging India with Easy Access to Loans Values Execution Excellence People Focus Integrity Customer Centric Clear Objectives Empowerment Transparency Customer Goals Resource Optimization Development Opportunities Accountability Clear Communication
Slide 16: Opportunity and our Strengths
Opportunity and our Strengths Opportunity* Core Strengths MSME Credit Addressable Market Pedigree Phygital Risk People Management Model ₹25 Tn ₹92 Tn credit gap Access to low Branches Employees Delivering cost coupled with led by proven higher risk borrowing digital & cycle tested adjusted Credit Ga
Slide 17: Our Product Suite
Our Product Suite Secured Against Collateral Mortgage Loans Gold Loan Business Loan AUM (₹Mn) 50,062 32,694 16,047 (% of total) (49.9%) (32.6%) (16.0%) Avg. Ticket Size 1.9 0.1 2.4 (₹ Mn) Disbursement 5,856 20,073 3,400 (INR Mn) & (Origination Yield) (14.6%) (16.0%) (17.5%) Average LTV 51.8% 70.0% N
Slide 18: Our Mortgage Business
Our Mortgage Business Mortgage Loans Small Ticket LAP and HL Medium Ticket LAP AUM (₹Mn) 24,838 25,224 (% of total) (24.8%) (25.1%) Avg. Ticket Size 1.3 4.7 (₹ Mn) Disbursement 3,199 2,657 (INR Mn) (16.5%) (12.5%) & (Origination Yield) Average LTV 52.5% 50.9% Underwriting Assessed Income Income Base
Slide 19: Our Underwriting Approach
Our Underwriting Approach Category Small Ticket LAP Medium Ticket LAP Business Loan Gold Loan Customer Retail Trading of Snacks and Trading and Installation of Industrial Food and Tea Stall Tailoring Business Savories Electrical Products Expand his product offering and to Refurbish a few existing ou
Slide 20: Who we are, Our Franchise, Financial Performance
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 21: Growing Branch Footprint
Growing Branch Footprint Comprehensive Branch Network… 83 18.1% 607 17 1,900+ Branches States Local channel Branch ₹100 bn 282 48.7% 14 and UTs partners Mix AUM Mix 1 1 242 33.2% 9 38 22 20 92 South West North South West North 14 1 More than 70 branches 108 Branch Expansion 20-70 branches 57 Less th
Slide 22: Growing Disbursements & AUM
Growing Disbursements & AUM ₹ Mn Disbursements YoY: 28% QoQ: -1% 32,038 1,07,487 29,656 29,329 27,047 22,940 10,285 6,683 74,698 33,122 9,256 9,471 58,937 7,455 19,548 43,795 7,602 74,365 21,753 22,973 20,073 19,686 17,323 17,576 51,335 55,150 15,485 8,766 26,472 10,920 FY19 FY20 FY21 FY22 FY23 Q2 F
Slide 23: Growing Installment Loans Disbursements
Growing Installment Loans Disbursements ₹ Mn Small Ticket LAP & HL Medium Ticket LAP Business Loans 11,022 10,908 11,192 7,654 6,706 5,968 5,181 3,701 3,484 3,278 2,835 2,463 2,873 2,103 5 FY 19 FY 20 FY 21 FY 22 FY 23 FY 19 FY 20 FY 21 FY 22 FY 23 FY 19 FY 20 FY 21 FY 22 FY 23 3,147 3,199 3,954 3,0
Slide 24: AUM Mix by Products
AUM Mix by Products 1% 1% 0% 6% 15% 15% 16% 16% 21% 10% 0% 8% 23% 33% 33% 40% 36% 27% 39% 25% 25% 32% 25% 28% 23% 25% 25% 17% 17% 17% FY19 FY20 FY21 FY22 FY23 H1FY24 Small Ticket LAP & HL Medium Ticket LAP Gold Loan Business Loan Other 23
Slide 25: AUM Mix by Region
AUM Mix by Region Mortgage Loan Gold Loan 1% 5% 0% 3% 6% 9% 9% 14% 16% 13% 17% 17% 20% 34% 28% 27% 29% 28% 29% 30% 32% 38% 39% 100% 77% 65% 67% 66% 62% 63% 56% 54% 55% 45% 44% FY19 FY20 FY21 FY22 FY23 H1FY24 FY19 FY20 FY21 FY22 FY23 H1FY24 South West North Mortgage Loans includes medium Ticket LAP,
Slide 26: Off-Book Strategy
Off-Book Strategy ₹ Mn AUM AUF Off Book % Product Q2'24 Q1'24 Q2'23 Q2'24 Q1'24 Q2'23 Q2'24 Q1'24 Q2'23 Mortgage 50,062 47,024 35,211 40,245 40,359 30,403 19.6% 14.2% 13.7% Gold Loan 32,694 31,242 25,628 32,694 31,242 25,628 0.0% 0.0% 0.0% Business Loan 16,047 14,872 11,010 11,750 11,147 10,363 26.8
Slide 27: Who we are, Our Franchise, Financial Performance
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 28: Financial Highlights
Financial Highlights ₹ Mn Net Interest Income Operating Profit PAT YoY: 29% QoQ: 17% YoY: 14% QoQ: 11% YoY: 25% QoQ: 7% 2,073 922 578 1,777 539 1,604 462 827 809 Q2 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q1 FY24 Q2 FY24 Shareholder’s Fund ROA % ROE % YoY: 19% QoQ: 6% YoY: -19bps QoQ: 4
Slide 29: Financials
Financials ₹ Mn Particulars Q2 FY24 Q1 FY24 Q2 FY23 Operational Information Number of Branches 607 584 543 Loan Disbursals 29,329 29,656 22,940 AUM 1,00,304 94,342 72,922 Number of Employees 3,970 3.732 3,349 Financial Information Income from Operations 3,980 3,679 2,931 Interest Expenses 1,669 1,63
Slide 30: Improving Spreads
Improving Spreads Spreads Yields Cost of Borrowings Spreads Yields Cost of Borrowings 17.3% 15.8% 16.4% 16.3% 16.2% 16.1% 15.5% 15.6% 14.5% 13.2% 8.3% 8.4% 8.3% 7.7% 8.9% 8.5% 7.4% 7.8% 7.9% 8.0% 8.2% 8.0% 8.7% 8.4% 8.2% 8.8% 6.1% 7.2% 7.3% 4.9% FY 19 FY 20 FY 21 FY 22 FY 23 Q2 FY23 Q3 FY23 Q4 FY23
Slide 31: Balance Sheet
Balance Sheet ₹ Mn Balance Sheet Q2FY24 Q1FY24 Q2FY23 QoQ YoY FY 23 FY 22 Assets Cash & Cash Equivalents & Other bank 9,226 2,478 1,432 946 1,426 Balance Loans 85,204 82,966 66,377 3% 28% 79,997 56,448 Investments 3,567 5,543 3,649 6,806 5,143 Other Financial Assets & Receivables 848 975 383 841 275
Slide 32: P&L Statement
P&L Statement ₹ Mn Profit & Loss Statement Q2FY24 Q1FY24 Q2FY23 QoQ YoY FY 23 FY 22 Interest Income on Loans 3,511 3,319 2,465 10,560 7,955 Net Gain on Direct Assignment 182 6 105 348 70 Income other than interest income 287 354 361 1,239 811 Total Income 3,980 3,679 2,931 12,147 8,836 Interest Expe
Slide 33: RoA Tree
RoA Tree RoA Tree Q2FY24 Q1FY24 Q2FY23 FY 23 FY 22 Interest Income on term loans / Average total assets 14.4% 14.4% 13.7% 13.7% 13.2% Net Gain on DA / Average total Assets 0.7% 0.0% 0.6% 0.5% 0.1% Income other than interest income on term loans/ Average total assets 1.2% 1.5% 2.0% 1.6% 1.3% Total In
Slide 34: Who we are, Our Franchise, Financial Performance
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 35: Quality of the Book
Quality of the Book Over 80% AUM from customers with CIBIL >6501,2 0% 8% 6% 20% 11% 9% 8% 56% 16% 76% 88% >700 650 - 700 <650 0/-1 >700 650 - 700 <650 0/-1 >700 <700 0/-1 Medium Ticket LAP Small Ticket LAP & HL Business Loan Granular loan book with high quality collateral 84% 78.4% ₹ 2.1 mn AUM secu
Slide 36: Portfolio Quality Indicators (1/2)
Portfolio Quality Indicators (1/2) Gross NPA % Net NPA % 2.3% 2.3% 2.3% 1.8% 1.8% 1.8% Q2 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q1 FY24 Q2 FY24 1+ DPD* % 30+ DPD* % 7.7% 4.6% 4.6% 4.5% 7.3% 7.4% Q2 FY23 Q1 FY24 Q2 FY24 Q2 FY23 Q1 FY24 Q2 FY24 * !+ DPD and 30+ DPD are for non Gold Loan portfolio 35
Slide 37: Portfolio Quality Indicators (2/2)
Portfolio Quality Indicators (2/2) ₹ Mn Q2FY24 Gross Stage 3 % Net Stage 3 % Particulars Gross Net AUF PCR (%) Q2FY24 Q1FY24 Q2FY23 Q2FY24 Q1FY24 Q2FY23 Stage 3 Stage 3 Mortgage 40,245 1,227 988 19.4% 3.0% 2.8% 3.0% 2.5% 2.3% 2.4% Gold Loan 32,694 297 267 10.0% 0.9% 0.9% 1.0% 0.8% 0.8% 1.0% Business
Slide 38: Expected Credit Loss
Expected Credit Loss ₹ Mn Particulars Q2FY24 Q1FY24 Q2FY23 FY22 FY23 Gross Stage 1 Assets 80,574 78,571 61,791 51,311 75,690 % of total loan assets 93.5% 93.5% 91.6% 89.1% 93.3% ECL provision 355 329 334 253 317 ECL provision % of assets 0.4% 0.4% 0.5% 0.5% 0.4% Gross Stage 2 Assets 3,596 3,594 4,14
Slide 39: Who we are, Our Franchise, Financial Performance
Who we are Our Franchise Financial Performance Risk Management Treasury & Funding
Slide 40: Sources of Funding
Sources of Funding Diversified Funding Profile ALM Position as on 30th September 2023 (Cumulative) ₹ Mn Surplus / 15% (Shortfall) 1% 24,568 < 3 months 11,266 8% 13,302 39,921 < 6 months 19,809 20,112 59,637 76% < 1 year 28,728 30,909 80,073 < 3 years 12,512 Terms Loans NCDs 67,561 Commercial Papers
Slide 41: Net Securitization Volume
Net Securitization Volume Off-book AUM ₹ 4,263 Mn ₹ 9,669 Mn ₹ 14,114 Mn Incremental Sell Down ₹ 2,576 Mn ₹ 7,744 Mn ₹ 7,197 Mn 5,272 3,886 2,401 1,787 1,925 1,395 676 0 175 ₹ Mn Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 40
Slide 42: Thank You
THANK YOU investor@fedfina.com www.fedfina.com
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