Ujjivan Small Finance Bank Ltd. · NSE:UJJIVANSFB
Ujjivan Small Finance Bank — Investor Day (June 2023)
114 slides from Ujjivan Small Finance Bank's investor day presentation, Jun 9, 2023
Slide 1: Building a Mass Market Bank
Investor & Analyst Meet BUILDING A MASS MARKET BANK JUNE 2023
Slide 2: Disclaimer
DISCLAIMER • This presentation has been prepared by Ujjivan 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
Slide 3: Agenda
AGENDA Building a mass-market bank: Unique Business model Liabilities: Stable, Sustainable, Scalable Micro Lending: Serving fast expanding aspiring customer base Affordable Housing: Geared-up for big leap ahead Credit & Collection: FY23 delivered, steady road ahead “Hello Ujjivan”: Attracting the ne
Slide 4: Building a Mass Market Bank: Unique Business Model
Building a Mass Market Bank Unique Business Model
Slide 5: Introducing Ujjivan SFB
INTRODUCING UJJIVAN SFB Differentiated • Focus on under-served customer segments Business • Long-standing association with customers; more than Model 2/3rd of asset customers are associated for 3+ years Despite Covid-19, strong foundation built over the last 3 years • Successful transition to a smal
Slide 6: Standing Tall
STANDING TALL ₹1,100 cr net profit: Among most profitable domestic companies ₹24,000+ cr Gross Loan Book ₹20,000+ cr disbursement in FY23 ₹25,000+ cr deposits; ₹10,000+ cr retail TDs; ₹6,700+ cr CASA Yield: 18.4% NIM: 9.5% RoA: 3.9% RoE: 31.4% Net worth: BVPS: ₹ 20.5 CRAR: 25.8% GNPA/NNPA: ₹4,209 cr
Slide 7: Well Diversified Pan India Presence
WELL DIVERSIFIED PAN INDIA PRESENCE NETWORK • 25 states and UTs (161 URCs) BRANCH • 629 Banking Outlets (BO) • 271 districts • 517 ATMs/ACRs • 5,000+ touch points CONNECTS PHYSICAL BANKING INFRASTRUCTURE • 260+ Money Mitra OTHER • 2 Asset Centers • 21 Other Offices 598 • Chalta Phirta Bank – 13,000+
Slide 8: Delivering – Consistently & Profitably
DELIVERING – CONSISTENTLY & PROFITABLY Sustained momentum in Business volumes Quarterly Disbursements crossed ₹6,000 crores mark Gross loan book – 66% growth in 18 months ₹ Crore ₹ Crore 6,001 24,085 21,895 4,870 4,868 4,841 20,938 4,809 19,409 4,327 18,162 16,463 14,514 Q3-FY22 Q4-FY22 Q1-FY23 Q2-F
Slide 9: Asset Quality at Industry Best – Negligible NNPA
ASSET QUALITY AT INDUSTRY BEST – NEGLIGBLE NNPA SMA Pool & Restructured Book have shrunk significantly highlighting strong asset quality SMA-0 SMA-1 SMA-2 NPA ₹ crores RF 1.0 RF 2.0 Total 30.8% Micro Banking (GL+IL) 80 65 145 Last 18 months improvement: Housing 8 18 26 9.8% • PAR: 1,505 bps MSME 6 4
Slide 10: Strong Deposit Growth with Retail at Fore-front
STRONG DEPOSIT GROWTH WITH RETAIL AT FORE-FRONT 81% growth in deposits over 18 months; CASA grew 113% 25,538 23,203 217 147 20,396 6,744 18,292 18,449 397 6,070 756 344 15,563 5,496 14,090 374 4,993 5,155 205 4,117 10,118 3,166 9,172 7,549 5,993 6,432 5,200 5,403 7,814 8,458 6,550 6,517 6,955 5,519
Slide 11: Drawing Strength from Ujjivan's Unique Business Model
DRAWING STRENGTH FROM UJJIVAN’S UNIQUE BUSINESS MODEL Asset Mix with high yields; fast growth Higher Can absorb Volume proportion higher cost Intensive of unsecured of fund Maintain high credit quality, Keeping opex under Strengthening liabilities, diversify to secured check keeping CoF under check
Slide 12: Focus Areas for FY 2023–24
FOCUS AREAS FOR FY 2023 – 24 Growing asset book with balanced mix of Secured Vs Unsecured Consolidating Deposit franchise with further granular base toward Retail, CASA Enhancing delivery channels with focus on digital, video Banking, Phone Banking for better customer experience Upgrading and expand
Slide 13: Liabilities
LIABILITIES STABLE, SUSTAINABLE, SCALABLE
Slide 14: Liability Mantra for Next Leap
LIABILITY MANTRA FOR NEXT LEAP What underpinned ₹25K crore milestone? What is the focus ahead? ▪ Reducing interest rate premium over larger peers ▪ Ahead of the market to anticipate rising rate cycle ▪ Expanding product & services suites to attract wider ▪ Strong base of traditional customer segment
Slide 15: Building Stable and Granular Liability Base
BUILDING STABLE AND GRANULAR LIABILITY BASE • Competitor benchmark of service • Multi-channel approach standards • Expanding branch-reach, relationship • Adherence to TAT standards banking • Service Quality Audit for the • Digital offerings, Video Banking branches • Enhancing Phone Banking services
Slide 16: Growing Customer Base, More Granular, Better ATS
GROWING CUSTOMER BASE, MORE GRANULAR, BETTER ATS …& Increasing Average SA Ticket Sizes Growing Customer Base… …with Focus on Granular Base… (ATS) No's in lakhs 76.9 ₹ in ‘000 5% 2% 30.6 16% 29.4 64.8 41% 59.2 Mar’19 34.4 54.4 26.9 36% 46.1 10.9 19.1 5.9 Individuals Banks Corporate Govt. TASC^ 14.7 1
Slide 17: Expanding from Traditional Customer Segments
EXPANDING FROM TRADITIONAL CUSTOMER SEGMENTS Senior Citizen HNI Women • Need: Higher rates on deposits, low-cost • Need: Exclusive lifestyle and wellness • Need: Higher Interest rates, Exclusive banking services and priority services at benefits, faster query resolution and higher offers, Easy-to-us
Slide 18: Video Banking for New Age Tech Savvy Customers
The Young Saver Demographics: 25-30 years, Graduate, Middle-income TO NEW AGE TECH SAVVY Psychographics: Values stability, financially responsible, prefers convenience CUSTOMERS Behaviours: Prefers online services, research-based decisioning, active on social media, well-travelled, likes to watch ed
Slide 19: Multiple Channels to Serve Customers
MULTIPLE CHANNELS TO SERVE CUSTOMERS Physical Infra Alternate Channels • 25 states and UTs • Phone Banking (200+ services in • 2 Asset Centers 9 Indian Languages) • 271 districts • Video Banking • 629 Banking Outlets (BO) • Voice Bot • 517 ATMs/ACRs Payments & Tie-ups IBMB • QR code/ Ujjivan Pay • I
Slide 20: Expanding Human Resource Capacity & Capability
EXPANDING HUMAN RESOURCE CAPACITY & CAPABILITY Talent Acquisition Talent Management Learning & Development Rewards & Recognition • Focus on Employer Branding to • Attractive Compensation, Grade • Skill development programmes – Selling • Performance appraisal based on attract good talent and Salary S
Slide 21: Digital FD, SA, CA, Video Banking, New Technological Solutions
DIGITAL FD, SA, CA • Digital FDs, SA products to cater to tech savvy VIDEO BANKING segment • Develop various APIs for Digital onboarding and servicing • Enhancing BNB capabilities through existing suite NEW TECHNOLOGICAL upgradation/Introduction of new platform • Knowledge on the current CRM capabil
Slide 22: Digital Fixed Deposits
DIGITAL FIXED DEPOSITS Attracting new age customers, across nation Hassle-free experience GET FD IN JUST 5 Step 1 Mobile No., PAN & Step 3 Step 5 SIMPLE STEPS… Complete Payment Complete Video Aadhar Verification KYC FD booked Step 4 Successfully No need to hold Step 2 A paperless Enter FD Details Pr
Slide 23: Digital Savings Accounts
DIGITAL SAVINGS ACCOUNTS Attracting new age customers, across nation Features Hassle-free SA Open Bank A/c from the opening through Step 1 Mobile No., PAN & Step 3 Step 5 ease of your comport Digital account link Aadhar Verification Complete Payment Complete Video KYC SA opened Successfully Virtual
Slide 24: Research-Based Brand Building
RESEARCH-BASED BRAND BUILDING ATL Activities Sponsorships • PAN India campaigns every 6 • Sponsorships and Co-branding months and Regional campaigns initiatives to create impact ▪ Print and TV campaigns - Independence Day, November every quarter • Strong line of partnerships to Festive Season, and R
Slide 25: Investing in Brand Building
INVESTING IN BRAND BUILDING watt act 8 deren eat as, eiieugi fs aire eeaTeaTaT ay ears aaah Fe oa anes arg ae ae ar, side’, Celebrate 75 years of Independence with = Ujjivan SFB's Oe =,
Slide 26: Way Ahead: Fast Growing Base, Affordable Cost
WAY AHEAD: FAST GROWING BASE, AFFORDABLE COST FY26 target: 80% CD Ratio | 35% CASA | 70% Retail Channel Technology enabled channels like: • Chatbot • IB, MB, BNB • Super App Customer Segment • Video Banking • Customised products • Phone Banking • Attracts wider customer base • Strong base in traditi
Slide 27: Micro Lending
MICRO LENDING SERVING FAST EXPANDING ASPIRING CUSTOMER BASE 27
Slide 28: Industry Has Survived Multiple Crises
INDUSTRY HAS SURVIVED MULTIPLE CRISES Launch of MFI Credit Bureau, RBI releases Malegam Committee regulations Creation of NBFC-MFIs COVID 19 SEWA established MFIN recognized as SRO by RBI. at Ahmedabad Harmonized MFI RBI issues Universal Banking License regulations to Bandhan 1974 2020 2023 2004 201
Slide 29: Industry Growing at 30%+ CAGR
INDUSTRY GROWING AT 30%+ CAGR • Industry has delivered 30%+ CAGR since 2012 despite demonetisation and Covid, serves 4.5% of Indian population • 10% CAGR in customer base, expected to continue growing with support from macro factors and various government schemes • Exposure per borrower is 7x in 12
Slide 30: An Evolution – Origins, Transformation & Commercialisation
AN EVOLUTION – ORIGINS, TRANSFORMATION & COMMERCIALISATION Better managed entities • Developmental approach vs professional management • Creating new job / employment opportunities • Gaining visibility, recognition to attract talent Banks & SHG Linkage NGO’s NBFC NBFC MFI FinTech – technical; manage
Slide 31: High Yield, High Growth, Moderate Risk
HIGH YIELD, HIGH GROWTH, MODERATE RISK Loan product Loan account count (Cr) Yield (%) PAR 31-90 % PAR 91-180 % Personal loans 9.5 12% - 16% 1.95% 0.79% Unsecured Business Loans 1.2 17% - 20% 2.74% 1.91% Micro finance 13.1 20% - 27% 1.19% 1.06% Credit Card 8.6 30% - 45% 2.22% 6.60% Consumer Loans 6.7
Slide 32: Market Potential
MARKET POTENTIAL Unserved Poor Aspirational middle class segment Women Borrower Gender Agnostic/Household level Income Livelihood needs Aspirational needs Single Product Multiple Product/Full fledged banking 1,219 Million 1,400 Million Rich 16 Million Rich 56 Million (>₹ 17 lacs) (> ₹ 30 lacs) Middl
Slide 33: Ujjivan: Leader of Today
UJJIVAN: LEADER OF TODAY Established industry Mar’23/ FY23 leader today ▪ 254 districts in 25 states/ UTs ▪ 599 598 outlets including 151154 SFB URCs ▪ Serving 60 lakh+ customers lac+ customers ▪ Commenced ▪ Disbursed ₹16,084 Rs 16,084crcrininFY23 FY23 NBFC-MFI operation in 2017 ▪ ₹17,401 ▪ Addition
Slide 34: Ujjivan: Higher Growth, Better Credit Quality
UJJIVAN: HIGHER GROWTH, BETTER CREDIT QUALITY Growing faster than Industry… Ujjivan asset quality, collections: Among industry best Mar’12-Dec’22: Ujjivan – 22x | Industry – 16x Ujjivan Vs Industry Portfolio - Mar'23 CAGR over last decade 7.2% Ujjivan* 36% 7.8% 9.7% NBFC MFI 11.1% 12.6% SFBs 32% 15.
Slide 35: What Makes Ujjivan Unique?
WHAT MAKES UJJIVAN UNIQUE? Strong Credit underwriting Collections Technology & monitoring • Industry 1st to have dedicated credit • Industry 1st to have segment focused • Pioneer in the usage of rule engine team for Microfinance business with a dedicated collection team – all NPA & for micro finance
Slide 36: What Makes Ujjivan Unique?
WHAT MAKES UJJIVAN UNIQUE? Asset Product Suite Liability Product Suite Alternate Channels • Wide Asset product basket • Focusing on Deposits from All – • Virtual relationship Management: Starting • Traditional MF customer base: Sampoorna Banking: from collection all the other asset and • Group Loans
Slide 37: Organisation Structure with Strong Credit, Collection, Control
ORGANISATION STRUCTURE WITH STRONG CREDIT, COLLECTION, CONTROL Business Head – Micro Banking Chief Credit Officer Business Head – Rural Banking Collection Credit National Business Manager Policy Regional Business Product Business Correspondent Team National Manager- Manager Team National Manager- Cr
Slide 38: Growth Engines at Place for a Steady Ride
GROWTH ENGINES AT PLACE FOR A STEADY RIDE What’s driving Ujjivan’s competitive edge Comprehensive product suite Digital lending • Graduating customers to IL, M- • Phase 1- Digital Lending through Geographies Lap,Vehicle Loan & Gold Loan Fintech Partnerships New • Enriching the savings behaviour of •
Slide 39: Growth Engines at Place for a Steady Ride
GROWTH ENGINES AT PLACE FOR A STEADY RIDE Leader of today Stronger leader of tomorrow • Pioneers in IL business; already a large business • Opportunity to cross-sell and upsell our large with strong team → market slowly moving towards customer base of more than 60+ lakh customers Individual Loans •
Slide 40: Affordable Housing
AFFORDABLE HOUSING GEARED UP FOR BIG LEAP AHEAD
Slide 41: Affordable Housing – Secured & Rapid Growth Business
AFFORDABLE HOUSING- SECURED & RAPID GROWTH BUSINESS 30 00 000 11.0% Fast-growing market… 11 .0% …with Banks gaining share 10.6% 25 00 000 10 .0% 9.5% 20 00 000 9.2% 8.7% 8.8% 68% 63% 9.0 % 15 00 000 8.0% 37% 32% 25,11,183 8.0 % 21,76,856 20,06,346 7.1% 18,11,576 2017 SCB HFC 2022 15,64,078 10 00 000
Slide 42: Affordable Housing: A Dominant Factor
AFFORDABLE HOUSING: A DOMINANT FACTOR Affordable segment growing at 32% CAGR* vs 12% for Housing Industry Housing Loans Outstanding in India* Break-up of Affordable Housing Loans 3.5 15% 3.58 26% 5.62 25% 5.03 36% Home Loans Upto ₹35 lakhs 13.79 60% Ujjivan 2.56 19% Target Group 1.93 14% 0.69 5% OSP
Slide 43: Our Journey So Far
OUR JOURNEY SO FAR Today we offer diversified & inclusive product suite to meet various home loan/mortgage related requirements across income segments FY 16-17 FY 17-18 FY 18-19 FY 19-21 FY 21-23 ▪ Forayed into Affordable ▪ Expanded focus to ▪ Increased distribution by ▪ Overall TAT reduced to less
Slide 44: Among Fastest Growing Affordable Housing Players
AMONG FASTEST GROWING AFFORDABLE HOUSING PLAYERS Among meaningful Affordable Housing players with Pan-India Presence average monthly disbursement close to 22 States, 143 Clusters, 445 Branches ₹140 crores (up from ₹60 crores in FY21) CAGR 4,00 0 37,041 35,000 Gross loan book: 42% 3,50 0 Disbursement
Slide 45: Re-focused to Aim Higher
RE-FOCUSED TO AIM HIGHER Strategic Parameter Housing 1.0 Housing 2.0 Evenly spread across regions with a focus on individual properties West region focussed business with Geography significant builder Loans. Equitable sourcing from all tiers in a geography Focus on Tier 2 & 3 Focus Focus on Business
Slide 46: Re-focused to Aim Higher
RE-FOCUSED TO AIM HIGHER Strategic Parameter Housing 1.0 Housing 2.0 Sourcing Channel Direct & Connector Multi Channel Approach Similar Process – Irrespective of income Separate process for SF & Formal segments Credit Underwriting profile with lesser TAT Relationship based on multi-product Customer
Slide 47: Market Positioning – Finding Our Sweet Spot
MARKET POSITIONING – FINDING OUR SWEET SPOT Large private banks, HFCs Ticket Size Income ₹ 15 lakh ₹ 50-70K/month HFCs & banks focused on Affordable housing segment like Aavas, Aptus, HFFC, ICICI Home Finance, Axis bank (Asha), HDFC (Reach) etc. ₹ 30-40K/month ₹ 10 lakh Largely Unserved/Informal Seg
Slide 48: Focused on Aspiring Middle Class
FOCUSED ON ASPIRING MIDDLE CLASS Informal Semi formal Formal FOCUS AREA Rural & Semi-Urban Semi-Urban & Urban Semi-Urban, Urban & Metropolitan BUSINESS Cash Salaried, Small time Salaried customers with more formal Salaried customers with more formal businessmen, handloom source of income, Self emplo
Slide 49: Product & Segmentation
PRODUCT & SEGMENTATION Product Wise OSP % Segment Wise OSP % 8.7% Home Purchase Bank Credit 15.6% 37.6% 42.4% Home Equity Loan 45.9% Cash Salaried SENP Construction Loan 33.3% 16.5% Others ▪ Lion share of product is Home Purchase which is targeted for Bank Credit salaried segment ▪ Focus on tier II
Slide 50: Diversifying Sourcing Model
DIVERSIFYING SOURCING MODEL Direct sales sourcing, connectors contribute to 95% of sourcing today Targeting to increase contribution of alternate channels to 25% or more over next 3 Years Distribution Channels Open Alternate Market Builder Connector/ Referral Marketing Digital Direct Channel DSA Sou
Slide 51: Comprehensive Credit Assessment
COMPREHENSIVE CREDIT ASSESSMENT Customer Check Property Check Bureau check, Document Verification & Property Check through Credit Visits, Multiple visits to cross-check customer’s Technical Visits, Legal assessment credit worthiness Centralized Process Regular Portfolio Review Centralized process fo
Slide 52: Organisation Structure with Strong Credit and Collection
ORGANISATION STRUCTURE WITH STRONG CREDIT AND COLLECTION Business Head- Housing & MLAP Chief Credit Officer National Manager – National Credit Manager – National Collections Zonal Business Head Housing Products Housing Manager Deputy Lead/Manager – Regional Business Head Housing Products Regional Co
Slide 53: Navigating Competition
NAVIGATING COMPETITION People • Performance recognition • Customised training programs • Reward & Recognition Process • Paperless process • Mobility solution • Better TAT Channel diversification • Branch & customer Referral • Digital marketing & lead generation • Higher DSA count Customer • New Cust
Slide 54: Recent Changes
RECENT CHANGES PRODUCT PROCESS PEOPLE • State Collateral Policy • Hub Model • Simplified Variable Pay • Efficiency, Customer • Profitability, • ROI Matrix Service, Business performance • Lower customer attrition • Channel Diversification • R&R programs driven by new retention • Branch, Customer plan
Slide 55: Tier II & III Market – Benefits
TIER II & III MARKET - BENEFITS METRO & TIER I TIER II & III Composite, HIL, HEL PRODUCT TYPE Purchase Construction, MLAP Salaried customers with more formal source of income, Cash Salaried, Small time businessmen, etc. Informal CUSTOMER PROFILE Self-employed professionals/ non-professionals etc. in
Slide 56: Driving Efficiency Through Hub-Model
DRIVING EFFICIENCY THROUGH HUB-MODEL Services Platinum Gold Business Credit Form Flow Turn Around Time Credit Administration Operations Collections Accelerate business Keep control levers Internal Legal & Technical Average under check Coordinator/Retention Manager Productivity
Slide 57: Digital Focus to Streamline Process, Enhance Customer Experience
DIGITAL FOCUS TO STREAMLINE PROCESS, ENHANCE CUSTOMER EXPERIENCE 1 2 3 4 5 Digital Channel Digital Customer for Sourcing Digital Processing Post Disbursement Analytics support for On-boarding Business including tranches Service through pre-approved top-up App/IB/MB loans & portfolio monitoring Inter
Slide 58: Asset Quality: Collection Focus, Stricter Credit
ASSET QUALITY: COLLECTION FOCUS, STRICTER CREDIT Portfolio Quality has improved significantly over 18 months • Strong collection mechanism put in place post pandemic • Dedicated legal team for NPA cases resolution 16.8% • Regular monitoring of portfolio at management level 13.3% • Better customer co
Slide 59: Key Differentiators
KEY DIFFERENTIATORS Understanding Agility of HFC within Lender of Choice Pan India Differentiated Semi-formal & ecosystem & with Tailor-made Presence underwriting for salaried Informal Segment credibility of a Bank offerings & self-employed segment
Slide 60: Graduating Micro to Micro LAP
GRADUATING MICRO TO MICRO LAP Why Micro LAP? Key drivers
Slide 61: Micro LAP: Way Ahead – Scaling Up
MICRO LAP: WAY AHEAD – SCALING UP Specialized Products • Products suiting different end usages Digital Journey • Digital On-Boarding • Video Personal Discussion • Scan based Disbursement Geographical Expansion • Offering products in all states & locations where the bank branches are Quick Scale up p
Slide 62: Way Ahead: Gaining Leadership
WAY AHEAD: GAINING LEADERSHIP FY 2025 – 26: Lender Of Choice • Among TOP 5 players in Affordable housing (in terms of monthly disbursal) • Strong Asset Quality: GNPA of <1.00% • Profitability: ROI focus, operational efficiency FY 26 • Customer first approach, 72 Hours TAT • One-stop Ujjivan digital
Slide 63: MSME
MSME BUILDING A SCALABLE MODEL
Slide 64: MSME Portfolio – Post Covid Snapshot
MSME PORTFOLIO – POST COVID SNAPSHOT PREVIOUS STATE THE ROAD AHEAD • High GNPA and Credit Cost impacted • GNPA has reduced by 250 bps through FY23 profitability reducing credit cost and improving profitability • Re-planning of manpower resources to • EWS and Monitoring team structure in place to • S
Slide 65: Business Strategy – New Lines of Business
BUSINESS STRATEGY – NEW LINES OF BUSINESS Serving Semi Formal LAP- Semi Formal Segment Customers, Term Loan catering to the semi formal market. Borrowers have Ticket Size partially documented income proofs & require longer tenor loans 15L – 100L Serving LAP- Formal Segment Formal Customers, Term Loa
Slide 66: Moving from a Transactional to a Relationship Based Approach
MOVING ON FROM VALUE ADDITION Value-added Services that go beyond loans A TRANSACTIONAL and limits will help provide a richer experience. CMS, Business Net Banking, QR Payment, easy POS Solutions et al will APPROACH ensure customer stickiness and delight TO A RELATIONSHIP HUMAN CAPITAL BASED APPROAC
Slide 67: Sourcing & Collections Strategy
SOURCING & COLLECTIONS STRATEGY SOURCE COLLECT Employ Digital Channels for repayment Deploy Channel by the way of BBPS Integration , Partners like DSAs and Financial Payment Gateway et al and physical Advisors channels like BCs to complement the same Double down on appointment of Legal Employ Aggreg
Slide 68: Annual Roadmap – Lines of Business
ANNUAL ROADMAP – LINES OF BUSINESS LAP WORKING CAPITAL Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE • Closure on • LOS and LMS • LOS Go-live • Annual • Closure of • LOS UAT – • LOS UAT – • Commenceme Vendor development, for Semi- Contest onb
Slide 69: Annual Roadmap – Lines of Business
ANNUAL ROADMAP – LINES OF BUSINESS SUPPLY CHAIN FINANCE FINTECH PARTNERSHIPS Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE MILESTONE • Closure on • LOS and LMS • LOS and LMS • Anchor • Closure of • Co- • Scaling up • Farming on Vendor development, go-l
Slide 70: Technology as an Enabler for Business Growth
TECHNOLOGY AS AN ENABLER FOR BUSINESS GROWTH INVESTING IN HARDWARE AND CLOUD LOAN ORIGINATION SYSTEMS TOMORROW, TODAY Ramping up our hardware and cloud capacity to Revamping LOS for various lines of businesses keep up with the computing requirements that are mobile first and API ready Our investment
Slide 71: Org Structure
ORG STRUCTURE Business Head - MSME Chief Credit Officer Regional Business National Manager – SCF & National Product Manager National Business Manager - LAP Digital Lending Manager – WC Area Business Manager | Circle Business Manager Regional Business Manager - WC SCF RM Fintech, EWS, • LAP Product T
Slide 72: Financial Institutions
FINANCIAL INSTITUTIONS Secured lending to Retail focused NBFCs
Slide 73: Financial Institutions Book: Secured Lending
TECHNOLOGY AS AN ENABLER FOR BUSINESS GROWTH Indirect exposure to Cross-sell Secured book other retail assets opportunity Gross Loan Book (₹cr) 1,128 Disbursement (₹cr) 918 855 715 648 543 549 467 240 225 Mar'19 Mar'20 Mar'21 Mar'22 Mar'23 Mar'19 Mar'20 Mar'21 Mar'22 Mar'23 Majority of the book on F
Slide 74: Expansive and Stringent Underwriting Process
EXPANSIVE AND STRINGENT UNDERWRITING PROCESS… ▪ Strong domain knowledge being a NBFC- ▪ Understanding Management Philosophy & ▪ Understanding the Business model of the company & MFI prior to becoming bank vision, Promoters experience & commitment their performance as well as Corporate Governance ▪ L
Slide 75: With High Quality Book to Ensure Low Credit Cost
…WITH HIGH QUALITY BOOK TO ENSURE LOW CREDIT COST Gross Gross Gross Credit rating advances Percentage advances Percentage advances Percentage (FY21) (FY22) (FY23) AA 123 19% 277 32% 476 42% A 397 61% 521 61% 568 50% BBB 127 20% 57 7% 84 7% Total 648 100% 855 100% 1,128 100% Standard Book – High Asse
Slide 76: Way Forward
WAY FORWARD ❖ Increasing exposure to BBB rated entities/ good unrated entities to max 10% of book • Yield expansion • Smaller ticket size • Better Cross-selling opportunities ❖ New Products • Working capital demand loan • Capital market product – Lending through NCD, CP etc.; better opportunity to e
Slide 77: Credit & Collection
CREDIT & COLLECTION FY23 DELIVERED, STEADY ROAD AHEAD
Slide 78: Asset Quality: Better than Industry over Covid Cycle
ASSET QUALITY: BETTER THAN INDUSTRY OVER COVID CYCLE Upgrades SMA Portfolio (₹506 Cr) Restructured Strong Credit 1.2% improved higher than ₹688 Cr NPA asset <1% of Policy & Collection Monitoring by half slippages gross loan book (₹335 Cr) 30.8% 21.0% 18.9% 14.9% 14.9% 11.8% 9.8% 9.8% 9.6% 7.9% 7.8%
Slide 79: NPA Movement: Slippages Under Control, Strong Recoveries
NPA MOVEMENT: SLIPPAGES UNDER CONTROL, STRONG RECOVERIES FY22 FY23 335 1,086 506 2,088 789 483 1,284 1,071 1,284 632 Opening NPA Slippages Recoveries/ W/Off Closing NPA Opening NPA Slippages Recoveries/ W/Off Closing NPA Upgrades Upgrades FY23: Q-o-Q Slippages, upgrades/ recoveries • Strong collecti
Slide 80: Floating Provision Cover @ 1%
FLOATING PROVISION COVER @ 1% Std+NPA Provision Floating PCR% (₹ in cr) 99% 99% 98% 100% 100 1400 1,334 98% 1,260 30 95% 1200 250 120 220 92% 1,036 90% Floating Provision of ₹250 Crs 1000 125 160 842 747 85% 800 150 877 120 600 80% 1,084 1,040 PCR @ 98% excluding floating 876 502 provision of ₹30 cr
Slide 81: Microbanking Asset Quality: Excellent Turnaround
MICROBANKING ASSET QUALITY EXCELLENT TURNAROUND Mar '21 Jun'21 Sep'21 Dec'21 Mar'22 June'22 Sep'22 Dec'22 Mar'23 38.7% 24.9% 21.6% 15.8% 15.3% 14.4% 13.8% 11.4% 9.2% 8.6% 7.6% 7.2% 7.2% 6.9% 6.0% 5.1% 4.3% 3.8% 3.5% 2.8% 2.7% 2.2% 1.6% 1.0% 0.7% 0.7% 0.6% PAR% GNPA% SMA% Asset quality much better th
Slide 82: Micro Banking Restructuring Portfolio, Almost Recovered
MICRO BANKING RESTRUCTURING PORTFOLIO, ALMOST RECOVERED 852 Restructuring 1.0 (₹ Cr) 944 Restructuring 2.0 (₹ Cr) 741 680 679 496 443 501 360 230 188 153 102 222 80 114 65 DEC-20 JUN-21 DEC-21 JUN-22 DEC-22 SEP-21 SEP-22 MAR-21 MAR-22 MAR-23 DEC-21 DEC-22 SEP-21 SEP-22 MAR-22 MAR-23 JUN-22 • Restruc
Slide 83: Collections Sustaining; NDA Collections at ~100%
COLLECTIONS SUSTAINING; NDA COLLECTIONS AT ~100% Collection % (against month due) Collection Efficiency % (incl Additional collections) 116% 117% 115% 115% 111% 111% 111% 111% 111% 112% 112% 110% 111% 100% 99% 99% 99% 99% 100% 99% 100% 100% 99% 100% 100% 98% Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22
Slide 84: Micro Banking – Key Highlights & Initiatives
MICRO BANKING - KEY HIGHLIGHTS & INITIATVES Systemic Implementation of Micro finance market share Quick turnaround time for State of the art LOS for Micro finance regulation increased from 4 % to 4.5% loan processing micro finance Household assessment, System Portfolio quality of Ujjivan has Inhouse
Slide 85: FIG Portfolio: Key Highlights & Initiatives
FIG PORTFOLIO : KEY HIGHLIGHTS & INITIATIVES
Slide 86: Housing – Key Highlights & Initiatives
HOUSING - KEY HIGHLIGHTS & INITIATVES Portfolio Quality Digitization Robust growth in 18 MOB 30+ is 0.53% vs 1.03% Centralized Processing for Bank Borrower base post covid from (SFBs*) Salaried -75% cases decisioned in 22,816 as on Sep’21 to 39,070 @71% Non- delinquent portfolio is at less than 2 da
Slide 87: Retail Assets: Improving Credit Quality
RETAIL ASSETS: IMPROVING CREDIT QUALITY Bucket X Resolution % BUCKET X RESOLUTION % 95.7% 95.5% 94.6% 94.6% 95.6% 95.7% 96.4% 98.3% • Bucket X Resolution has shown 91.5% 95.0% 94.3% 94.3% consistent improvement in FY23 • Resolutions improved to 98% 89.5% 91.7% 92.4% 92.5% 92.1% 95.4% 94.5% 94.6% 94.
Slide 88: Collection System
COLLECTION SYSTEM One of the best user interface in the Industry Paperless Collection Credit Nirvana Accessibility Core System ✓ Elimination of Manual receipts System Options ✓ Receipt Management – real time reconciliation & update Effective Monitoring : Geo Tracking Finacle Mobility App for field a
Slide 89: Say "Hello Ujjivan" for the New Generation
SAY “HELLO UJJIVAN” FOR THE NEW GENERATION
Slide 90: Technology Differentiators
TECHNOLOGY DIFFERENTIATORS Inclusion - Financial to Digital Multi-channel approach • Digital Powered by vernacular • Assisted digital journey • Self service: Hello Ujjivan, IBMB, BNB, Digital FD • Phone and video banking Reducing TAT • Payments: QR code, POS, UPI • Micro loans: 30 days to 3 days • F
Slide 91: Business Enablers
BUSINESS ENABLERS Upgraded Loan Origination System for all secured products Infrastructure upgrade at Data Centres and Disaster Recovery sites Cloud strategy to enable multiple application rollout on cloud System Reliability Engineering (SRE) for stability and availability of critical applications M
Slide 92: Expanding Capabilities with Strategic Partnerships
EXPANDING CAPABILITIES WITH STRATEGIC PARTNERSHIPS iFrame for Loan Aadhar Verification Repayment Easy input in single secure page Customer Engagement Enabler Payments APIs hosted 73
Slide 93: End-to-End Digital Journey
END-TO-END DIGITAL JOURNEY 4. MULTI-PRODUCT OFFERING • Analytics based Cross-selling and 1. PROSPECTING up-selling of Ujjivan and Third • Advanced Data Modelling: Targeting new Party Products customers using Artificial Intelligence and Machine Learning • Digital Lead Generation 3. Servicing • Seamle
Slide 94: Video Banking: Digital Inclusion to Next Level
VIDEO BANKING: DIGITAL INCLUSION TO NEXT LEVEL • Full KYC checks virtually • First project enabled completely on Cloud…. • Virtual Re KYC facility • Personal discussion for loans • Banking services Customer ADVANTAGES TO CUSTOMER Video Banker Accessibility | Convenience Personalization | Security
Slide 95: Video Banking
VIDEO BANKING Customer Proposition Business Proposition o Customer Convenience o Growth Opportunity • Branch like experience • Acquire in locations without branches • Multi-lingual, 8am -8pm - 365 days • Opportunity for cross sell or up sell • Seamless Delivery of banking • Secure with multi layer a
Slide 96: Phone Banking
PHONE BANKING Customer Proposition Business BusinessProposition Proposition o Customer First Approach o Primary Channel with high productivity & low cost • Services Offered in 8 Indian languages + • Loan on Phone, Third Party Products English • Repeat loans • 89% customers serviced in Indian languag
Slide 97: "Hello Ujjivan" – Promoting Digital Inclusion
“HELLO UJJIVAN”- PROMOTING DIGITAL INCLUSION Getting industry recognition… How is it different from Regular How is it different from Regular Mobile Banking? Mobile Banking? Innovation in Consumer Tech Audio guides on every screen Scan to Download Mobile Banking Solution Check balance | pay EMI Learn
Slide 98: QR Code: Promoting Digital Inclusion
QR CODE: PROMOTING DIGITAL INCLUSION Registrations ramping-up fast… Empowering customers to # of customers 2,95,000 accept digital payments 1,98,324 1,43,792 59,956 Q1 Q2 Q3 Q4 …with transactions growing faster 9X MoM Growth since Inception ₹ crores 305 150 LAUNCHED IN JAN-22 70 26 Q1 Q2 Q3 Q4
Slide 99: Mobile Banking: 53% Market Share
MOBILE BANKING: 53% MARKET SHARE 12 Touching more lives than others; Growing Faster than Industry 60% Ranking reflecting leadership^ 53% 10 47% 50% Cards Transaction Cards Transaction @ ATM @POS 8 40% 1st among SFBs 1st among SFBs 24th across Banks 34th across all Banks 6 30% 10 9 4 20% Cards Issued
Slide 100: Leaders in Driving UPI Usage
LEADERS IN DRIVING UPI USAGE Ujjivan Ranks 31st across banks by volume 2nd among SFBs and Ranks 12th in Lowest Technical Decline UPI Registration Count (In Lakhs) – FY23 UPI Transaction Count (In Mil) – FY23 Debit Trans. Count (In Mil) Credit Trans. Count (In Mil) 36 33 29 17 26 11 63 55 7 48 41 3 F
Slide 101: Robotic Process Automation Driving Efficiencies
ROBOTIC PROCESS AUTOMATION DRIVING EFFICIENCIES What is RPA? Its a technology that can process repetitive tasks in large Report volumes yielding cost efficiencies Generation/ Synthetic AREAS Monitoring ROBOT is part of following functions UPI & IMPS Reconciliation Operations Micro Banking Employee S
Slide 102: Expanding Digital Reach
EXPANDING DIGITAL REACH Video Banking WhatsApp Banking Conversational AI (Chatbot) ETA: Q2 ETA: Q3 ETA: Q3 One-stop solution for providing all Marketing outreach for increased Dynamic conversational features banking services customer penetration for service and lead generation Digital Account openin
Slide 103: 80+ Initiatives Planned for This Fiscal
80+ INITIATIVES PLANNED FOR THIS FISCAL… Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 • Fund Transfer Limit Enhancement • Home Loan Balance Transfer SR • Complaint Registration • Investment Calculator • Multi-Factor Authentication for • Home Loan Top-up SR • Re-KYC facility • Chatbot Activation • Loans (HL, Vehi
Slide 104: …With Many More Beyond FY 2023–24
…WITH MANY MORE BEYOND FY 2023 – 24 • Instant in-principle approval of loans • Fintech Tie ups • DIY Current Account for Partnership/ Firms (Phygital) • DIY – WhatsApp Banking A/c Opening • DIY OD against FD / Loan against FD • Investment & Insurance • UPI Lite / International Payments
Slide 105: Lending Responsibly
Lending Responsibly Environmental, Social & Governance
Slide 106: ESG Focus Areas at Ujjivan
ESG FOCUS AREAS AT UJJIVAN • Responsible Lending • Corporate Governance • Access to Finance RESPONSIBLE ACCOUNTABLE • Privacy & Data Security • Digitalization • Risk Management • Employee Welfare EQUITABLE ENVIRONMENTAL • Energy Management • Diversity & Inclusion • Waste Management • Community Wellb
Slide 107: ESG Focus Areas at Ujjivan
ESG FOCUS AREAS AT UJJIVAN Lending via Rural • Expanding reach by presence across the country Banking – INR. 1,194 Presence in 25 States cr. OSP • Financial inclusion linked to products & services –Rural Banking, Affordable housing etc. 100% Group Loan 93% Retention Rate • Water and Sanitation loans
Slide 108: ESG Focus Areas at Ujjivan
ESG FOCUS AREAS AT UJJIVAN • ESG Oversight at Board Level. Primary agenda under Risk Management Committee of Board 3.7 metric tonnes 30% Diversity • Advanced Privacy & Data Security protocols in place of e-Waste disposed at Board Level • Climate Risk Assessment initiated – Physical & Transition ACCO
Slide 109: Way Ahead
WAY AHEAD SUSTAINABLE PROFITABLE GROWTH
Slide 110: Assets: Drawing Lessons from Experience
ASSETS: DRAWING LESSONS FROM EXPERIENCE LEARNINGS Microbanking Affordable Housing MSME Financial Institutions • Expanding customer • Lender of Choice in our • Transitioning to • Supports overall RoE base – Deeper digital focus markets “relationship model” with good returns and penetration with from
Slide 111: Liabilities: Drawing Lessons from Experience
LIABILITIES: DRAWING LESSONS FROM EXPERIENCE LEARNINGS Multi Channel need Full Bouquet of Need of establishing Strong service quality for new age customer product and services Ujjivan brand as bank Training, CRM Next, smart Phone Banking, Product suite expansion- PAN India and Regional statement, ot
Slide 112: Not Losing Sight of Cost Management
NOT LOSING SIGHT OF COST MANGEMENT ▪ Robotics Process Automation ▪ Increase in Productivity ▪ Hub-based secured loan processing ▪ IT systems, Loan origination systems, ▪ Hello Ujjivan mobility solutions ▪ Repeat Loan ▪ Video-KYC ▪ Collection cost ▪ Video-Banking, Phone Banking ▪ Process Simplificati
Slide 113: Building on to the Strong Platform
BUILDING ON TO THE STRONG PLATFORM ASSET DEPOSITS RATIOS 2023-24 Gross Loan Book Growth- >25% Deposit Growth: >30% NIM: >9.0% Credit Cost: <100bps CASA growth: >35% RoE: >22% Secured Book: Approx 32% 2024-26 Gross Loan Book Growth- >25% CD Ratio: 80% Credit Cost: <150bps RoE: >20% CASA Ratio: 35% Se
Slide 114: Thank You
THANK YOU Investor Relations: Deepak Khetan | deepak.khetan@ujjivan.com | +91 7045792752 Madhusudan Dalmia | madhusudan.dalmia@ujjivan.com | +91 8391831703
Ujjivan Small Finance Bank — Investor Day (June 2023) on 6ix