Satin Creditcare Network Ltd · NSE:SATIN
Satin Creditcare Network — Q3 FY2020 Earnings Presentation
60 slides from Satin Creditcare Network's earnings presentation, Feb 12, 2020
Slide 1: Letter to stock exchanges on investor presentation
February 12, 2020 To, The Manager, The Manager National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Bandra East, Mumbai-400051 Mumbai – 400023 Scrip Code: SATIN Scrip Code: 539404 Dear Sir/Madam, Sub: Investor
Slide 2: Investor Presentation February 2020
INVESTOR PRESENTATION February 2020 BUILDING A DIFFERENCE BSE: 539404 | NSE: SATIN TO MAKE A DIFFERENCE Corporate Identity No. L65991DL1990PLC041796
Slide 3: Content and Cautionary Statement
Content 03 - 08 09 - 28 29 - 33 Overview and Key Performance What makes Satin a Compelling Multiple Growth Highlights Investment Story Levers 34 - 53 54 - 60 Financials of the Company & Its Subsidiaries Company Background Cautionary Statement Any forward-looking statements about expected future even
Slide 4: Key Business Performance Highlights (1/2)
Key Business Performance Highlights (1/2) India’s largest NBFC-MFI in no. of customers (35.6 lacs), branches (1,354), districts (391) and states (22), leading in terms of Assets Under Management (AUM), with AUM of Rs. 7,284 crore for Q3FY20 RoA 2.8%, RoE 13.6% and CRAR 32.17% in Q3FY20 First place a
Slide 5: Key Business Performance Highlights (2/2)
Key Business Performance Highlights (2/2) Long term Credit Rating IND A- (Positive) from India Ratings; Short term rating at A1 from ICRA, CRISIL and CARE ; Grading of MFI 1 from CARE Ratings Social rating sA from Microfinanza, C1 Code of Conduct Assessment (COCA) from ICRA, the highest grade Cashle
Slide 6: Corporate Overview Standalone – Q3 FY20
Corporate Overview Standalone – Q3 FY20 Rs. 48 crore 2.9% 13.8% 32.17% PAT ROA ROE CRAR Rs. 6,390 crore 1,904 crore Rs. 5.7 lacs 1,110 GLP Disbursement No. of Loans disbursed Branches (1) Rs. 35,000 22 38.2 lacs 99% Average Ticket Size States & UTs Loan Accounts Outstanding Collection Efficiency (1)
Slide 7: Corporate Overview Consolidated – Q3 FY20
Corporate Overview Consolidated – Q3 FY20 Rs. 47 crore 2.8% 13.6% PAT ROA ROE Rs. 7,284 crore 375 crore Rs. 230 crore Rs. GLP Revenue NII 1,354 22 35.6 lacs Branches States & UTs Clients Data for Q3FY20, RoA and RoE are calculated on annualized basis 6
Slide 8: Update on Assam
Update on Assam On account of unrest in few districts of upper Assam by some organizations and protests thereafter, the operations were impacted in North Eastern districts of Assam Rs. 250 crore Rs. 3 crore Rs. 29 crore* On-book Portfolio GNPA Provisions The company has taken various measures, along
Slide 9: Who we are
Who we are Microfinance is primarily based on the Joint Liability Group (JLG) model, to provide financial assistance and enable women from rural and semi-urban areas to achieve self sustainability CREATING A NICHE BY BEING A ONE STOP FINANCIAL SERVICES PROVIDER FOR OUR CUSTOMERS Social impact financ
Slide 10: What makes Satin a Compelling Investment Story
What makes Satin a Compelling Investment Story 1. Leading MFI player with differentiated Product Offerings 2. Diversified Geographical Reach 3. Technology Prowess 4. Robust Underwriting Processes 5. Well-diversified liability profile 6. Ample Liquidity & Positive ALM 7 Strong & Experienced Managemen
Slide 11: Leading MFI player with differentiated Product Offerings
1. Leading MFI player with differentiated Product Offerings Business Correspondent SCNL Housing Finance SME Services Product features Taraashna Financial Satin Housing Finance Satin Finserv Limited MFI(1) as on Dec’19 Services Limited(2) Limited(3) (SFL)(4) Start Date May’08 (JLG) May’12(3) Feb’18 M
Slide 12: Focus only on Micro-Finance Products
..with Focus only on Micro-Finance Products Income Generation Loan Long Term Loan Product Financing/Wash (Prarambh) Festival Loan (Vriddhi) Loan Ticket Size : Ticket Size : Ticket Size : Ticket Size : Rs. 8,000 – Rs. 30,000 Rs. 6,000 Rs. 31,000 – Rs. 50,000 Rs. 1,099 – Rs. 15,000 Tenure : 12/24 mont
Slide 13: Opportunities to leverage our customer reach
… with opportunities to leverage our customer reach Satin finances product purchase of solar lamps, bicycles etc. and grants loan for safe water and sanitation facilities Product Financing Benefits Bicycle Loan Solar Products Enhances the productivity and income generating potential of its clients
Slide 14: Diversified Geographical Presence
2. Diversified Geographical Presence …serving ~36 lacs Customers across India 57% 3,563,799 4,193,731 Clients with Satin as Only No. Of Active Clients No. of Loan Accounts Lender* 391 85,313 No. of Districts No. of Villages 66 257,113 No. of Regional Offices No. of Centres 49% 8,225 12,971 No. of Fi
Slide 15: Reducing exposure to traditional regions, increasing footprints
… Leading to increasing footprints % of total GLP GLP (Rs. crore) States FY15 Q3FY20 Dec’19 UTTAR PRADESH 43.3% 23.3% 1,697 BIHAR 17.2% 15.5% 1,132 2. Reducing exposure to traditional regions MP DELHI & NCR 18.5% 5.1% 9.4% 684 3.5% 258 UTTARAKHAND 4.0% 1.6% 119 TOTAL 88.1% 53.4% 3,890 % of total GLP
Slide 16: De-risking geographical concentration
… and de-risking geographical concentration To have become a PAN India Player Share of Top 4 States Reduced from 86% to 57% over 4 years Limiting Exposure per district 85.9 Average exposure per district % % of Top 10 Districts to AUM 12.7 77.3 10.1 -36% 0.50 27 67.7 15.5 57.5 0.45 10.2 56.3 19.2 21
Slide 17: Technological Prowess & Processes
3. A Difference Powered by Technological Prowess & Processes… Turn Around Time of Customer Acquisition Game Changing Help us to be ahead of the curve to better to disbursement journey Digital Transformation Technology respond to the ever-changing business Reduced from 18 days to a few (LMS) scenario
Slide 18: Centralized Share Services (Vision, Scope & Task Criteria)
Centralized Share Services (Vision, Scope & Task Criteria) Aimed to maximize the effectiveness of the business process and policies by providing and ensuring high quality services to our clients as well as our stakeholders Credit Risk Management and Data Customer Services Quality Maintenance Loan ap
Slide 19: Centralized Shared Services
Centralized Shared Services Branch n1 Centralized Shared Branch n1 Psychometric Service Center Test Loan CB Check Branch n2 Application Branch n2 ABM – n1 ABM – n2 & KYC Collection In case of rejection, transaction In case of Rejection, transaction Operations at Branch would re-flow to Branch for re
Slide 20: Psychometric Test – First of its Kind in Microfinance
Psychometric Test – First of its Kind in Microfinance Domain 8 lacs clients have been tested, whose credit performance will be closely monitored to test the efficacy of this tool Borrower category has 34 questions Test has been designed for two while the Husband category has 29 Test Parameters categ
Slide 21: New Projects & Initiatives – Cashless Collection
New Projects & Initiatives – Cashless Collection What it is? Cost Efficient & Productive Overcoming Challenges Aadhaar Enabled Payment System Safety It will save the time and cost Biometrics not mapped at client’s bank (AePS) is a bank led payment involved in cash collection and account: Clients are
Slide 22: Operating Efficiency & Scalability
… leading to Operating Efficiency & Scalability New initiatives… ..leading to improved processes Centralized processes Reduced TAT KYC Compliance & Real- time Credit Bureau checks Real-time Decision Making Auto bank reconciliation Faster Book Closing using API Enhanced Productivity Penny drop verifi
Slide 23: Robust Underwriting Processes
4. Robust Underwriting Processes Psychometric tests to reduce risk on customers with negative intentions, has made customers filtration process more scientific and transparent Real-time Credit Bureau checks to track loan history of the prospective clients, also created own Credit Bureau scorecard fo
Slide 24: Full-fledged in-house Internal Audit
…Full-fledged in-house Internal Audit Full-fledged in-house Internal Audit Feedback based 119 Compliance Audit Zonal Auditors & Regional Auditors 1,103 Audits completed in last quarter 100% Digital on Audit Reports and Findings Quarterly Audit 18 man-days field audit per auditor per month Regional O
Slide 25: Robust underwriting techniques
… coupled with robust underwriting techniques Hit Rate for all Products – Q3FY20 CB Rejection Reason – Q3FY20 8% 30% 30% 3% 92% 37% Hit No Hit >1 MFI Over Indebtedness >3 Lenders Defaulter SCNL Guidelines – Q3FY20 Rejection Rate for all products is ~18% for Q3FY20 Limit RBI Guidelines MFIN Guideline
Slide 26: Improved Collection Efficiency
… resulting in Improved Collection Efficiency Robust collection efficiency reflecting high credit discipline in disbursement strengthened by process re-engineering Demand Collection Period of disbursement % of AUM Cumulative CE% (Rs. crore) (Rs. crore) Jan’17 to Mar’18(demon impact) 5,962 5,791 4% 9
Slide 27: Well-diversified Liability Profile
5. We have a well-diversified Liability Profile… … insulated from Capital Market Turbulence Product-wise Dec’19 Large Lender Base 3% 70 Active Lenders 0% Term Loan Top 10 Funders % Share as on 31st Dec’19 28% NCD State Bank of India 14% 53% Buyout Commercial paper NABARD 13% 17% ECB Bandhan Bank Lim
Slide 28: Strong Capitalization with Ample Liquidity
6. Strong Capitalization with Ample Liquidity Healthy CRAR to support Growth Opportunities Benefit of positive ALM continues 32.17% 23.9 28.49% 21.5 22.3 22.1 18.4 21.18% 11.7 11.4 8.4 8.5 9.0 FY18 FY19 9MFY20 FY16 FY17 FY18 FY19 9MFY20 Avg. maturity of Assets Avg. maturity of Liabilities Static ALM
Slide 29: Multiple Growth Levers
Hey, IN <S MULTIPLE GROWTH LEVERS..
Slide 30: Industry Growth Drivers
Industry Growth Drivers Massive growth Healthy growth in Increased Government focus potential of MSME Large unmet affordable housing penetration of on digitisation and BC sectors demand in the finance segment technology in industry rural areas 29
Slide 31: Industry Performance
Industry Performance 12,915 (+24% Y-o-Y) 105,505 (+31% Y-o-Y) 2.98 crore (+33% Y-o-Y) Branch Network Employee Base Total Clients 3.50 crore (+34% Y-o-Y) Rs. 27,391 (+10% Y-o-Y) Rs. 63,869 crore (+46% Y-o-Y) Total Loan Accounts Average Ticket Size Assets Under Management (AUM) 63,289 Off Balance Shee
Slide 32: Re-engineering Future with expanding scope through subsidiaries
Re-engineering Future with expanding scope through subsidiaries Core operations Continued Focus on Portfolio Quality Differentiated processes and controls to be better equipped to handle any exigency Aim to achieve per state exposure to <20% by 2020, and per district exposure to <1% of AUM F
Slide 33: Diversification with allied product offerings
Diversification with allied product offerings Taraashna Financial Services Ltd - Satin Housing Finance Ltd (SHFL) Satin Finserv Limited (SFL) TFSL » Acting as a business correspondent, TFSL » 100% retail book comprising of: » Incorporated in Aug’18, got license from RBI provides credit to clients in
Slide 34: Key Financial & Operational Metrics
KEY FINANCIAL & OPERATIONAL METRICS 33
Slide 35: Key Operation Metrics (1/2)
Key Operation Metrics – (1/2) Districts, States and Branches Employees & Loan Officers 1,3541 1,163 8,2252 995 6,926 431 767 12,9713 22 22 6,382 11,831 1,477 18 4,481 1,325 16 16 9,004 2,684 6,910 1,344 340 371 1,109 302 10,419 11,184 215 235 7,653 5,801 3,918 FY16 FY17 FY18 FY19 9MFY20 FY16 FY17 FY
Slide 36: Key Operation Metrics (2/2)
Key Operation Metrics – (2/2) Steady Growth seen in Disbursement Disbursement1 (Rs. crore) & No. of Loans1 (‘000) Satin JLG loans - Average Ticket Size (Rs.) 2,339 1,816 1,828 31,000 30,000 1,689 1,566 26,000 24,000 6,252 23,000 5,572 5,530 3,606 3,594 FY16 FY17 FY18 FY19 9MFY20 FY16 FY17 FY18 FY19
Slide 37: Key Standalone Financials
Key Standalone Financials Gross Income (Rs. crore) Cost to Income Ratio (%) 1,373 61.6% 977 54.7% 50.8% 46.9% 43.3% 345 347 381 Q3FY19 Q2FY20 Q3FY20 FY18 FY19 Q3FY19 Q2FY20 Q3FY20 FY18 FY19 NII and PAT (Rs. crore) Opex to GLP (%) 734 6.7% 6.7% 6.5% 6.0% 6.3% NII 445 PAT 215 198 206 195 70 55 82 48 Q
Slide 38: Financial & Operational Details (Consolidated)
FINANCIAL & OPERATIONAL DETAILS (Consolidated) 37
Slide 39: Annexure – Business Details – Consolidated
Annexure – Business Details – Consolidated Particulars Q3FY20 Q3FY19 YoY% Q2FY20 QoQ% AUM (Rs. crore) 7,284 6,208 17.3% 7,182 1.4% On-Book AUM* 4,092 4,293 -4.7% 4,140 -1.2% Securitization 34 446 -92.3% 113 -69.6% Assignment 1,776 889 99.8% 1,662 6.9% Business Correspondence 522 407 28.2% 612 -14.6%
Slide 40: Annexure – Business Details – Consolidated
Annexure – Business Details – Consolidated Particulars Q3FY20 Q3FY19 YoY% Q2FY20 QoQ% No. of Employees 12,971 11,863 9.3% 11,551 12.3% SCNL 11,184 10,538 6.1% 9,832 13.8% TFSL 1,477 1,258 17.4% 1,472 0.3% SHFL 182 67 171.6% 130 40.0% SFL 128 - - 117 9.4% No. of Loan Officers 8,225 6,784 21.2% 7,823
Slide 41: Annexure – P&L Statement – Consolidated
Annexure – P&L Statement – Consolidated Particulars (Rs. crore) Q3FY20 Q3FY19 YoY% Q2FY20 QoQ % 9MFY20 9MFY19 YoY% Revenue Interest and Fee Income 250 284 -12.0% 238 5.0% 737 878 -16.0% DA Income 56 68 -18.3% 57 -1.9% 151 86 75.8% Treasury Income 32 25 28.4% 33 -1.9% 95 65 46.5% BC Fees 31 23 33.8%
Slide 42: Financial & Operational Details (Standalone)
FINANCIAL & OPERATIONAL DETAILS (Standalone) 41
Slide 43: Annexure - Operational Details – Standalone (Quarterly)
Annexure - Operational Details – Standalone (Quarterly) Particulars Q3FY20 Q3FY19 YoY% Q2FY20 QoQ % Gross AUM (Rs. crore) 6,390 5,590 14.3% 6,414 -0.4% No. of districts 371 340 9.1% 359 3.3% No. of branches 1,110 937 18.5% 1,073 3.4% No. of States of operation 22 23 -4.3% 22 0.0% No. of Employees 11
Slide 44: Annexure - Operational Details – Standalone (Quarterly)
Annexure - Operational Details – Standalone (Quarterly) Particulars Q3FY20 Q3FY19 YoY% Q2FY20 QoQ % Productivity Metrics for MFI lending Gross AUM/ Branch (Rs. crore) 5.5 5.8 -4.6% 5.7 -3.2% Gross AUM/ Loan Officer (Rs. crore) 0.9 0.9 -4.1% 0.9 -5.3% Disbursement/ Branch (Rs. crore) 1.7 1.3 25.1% 1.
Slide 45: Annexure - Financial Performance – Standalone
Annexure - Financial Performance – Standalone Particulars (Rs crore) 9MFY20 Q3FY20 Q3 FY19 Q2FY20 FY19 Gross yield (1) 21.42% 21.70% 27.35% 21.44% 23.97% Financial Cost Ratio(2) 9.17% 8.85% 11.95% 9.12% 11.15% Net Interest Margin(3) 12.25% 12.86% 15.40% 12.32% 12.81% Operating Expense ratio(4) 6.36%
Slide 46: Annexure - P&L Statement – Standalone
Annexure - P&L Statement– Standalone Particulars (Rs crore) Q3FY20 Q3FY19 YoY% Q2FY20 QoQ % 9MFY20 9MFY19 YoY% Revenue Interest and Fee Income 242 282 -14.3% 233 3.9% 719 876 -17.9% DA Income 56 68 -18.3% 57 -1.9% 151 86 75.8% Treasury Income 31 24 27.0% 31 -3.0% 90 62 45.2% BC Income 15 8 91.0% 17
Slide 47: Financial & Operational Details (Subsidiaries)
FINANCIAL & OPERATIONAL DETAILS (Subsidiaries) 46
Slide 48: Annexure - Operational Details – TFSL
Annexure - Operational Details – TFSL Particulars Q3FY20 Q3FY19 YoY% Q2FY20 QoQ% Gross AUM (Rs. crore) 646 573 12.7% 591 9.3% Disbursement during the period (Rs. crore) 213 152 40.5% 209 1.9% No. of loans disbursed during the period 68,586 54,023 27.0% 64,444 6.4% No. of Active Customers 368,879 406
Slide 49: Annexure - P&L Statement – TFSL
Annexure - P&L Statement – TFSL Particulars (Rs crore) Q3FY20 Q3FY19 YoY% Q2FY20 QoQ % Revenue Total Revenue 17.2 16.9 1.4% 14.3 20.17% Expenses Finance Cost 0.9 0.4 141.2% 1.0 -16.5% Employee Benefit Expenses 9.7 9.0 8.5% 9.3 5.1% Credit Cost 6.1 1.9 218.0% 1.1 435.4% Other Expenses 2.5 3.0 -17.4%
Slide 50: Annexure - Operational Details – SHFL
Annexure - Operational Details – SHFL Particulars Q3FY20 Q3FY19 YoY% Q2FY20 QoQ% Gross AUM (Rs. crore) 138 45 204.0% 116 19.5% Average Ticket Size (Rs) 1,268,000 1,380,000 -8.1% 1,341,000 -5.4% Disbursement (Rs. crore) 26 21 20.9% 18 43.9% CRAR (%) 133.78 94.65 - 128.95 - No. of Branches 13 3 333.3%
Slide 51: Annexure - Financial Details – SHFL
Annexure - Financial Details– SHFL Particulars (Rs crore) Q3FY20 Q3FY19 YoY% Q2FY20 QoQ % Revenue Interest and Fee Income 4.6 1.3 263% 3.9 17.6% Treasury Income 0.5 0.2 134% 0.5 -8.8% Other income 1.1 0.3 268% 0.2 451.9% Total Revenue 6.2 1.8 249% 4.6 33.6% Expenses Finance cost 2.4 0.3 695% 1.7 42.
Slide 52: Annexure - Financial & Operational Details – SFL
Annexure - Financial & Operational Details – SFL Particulars Q3FY20 Particulars (Rs crore) Q3FY20 Gross AUM (Rs. crore) 109 Revenue Interest and Fee Income 4.48 Average Ticket Size (Rs) 1,327,400 Treasury Income 0.06 Disbursement (Rs. crore) 50 Other income 0.06 No. of Loan Disbursed 312 Total Reven
Slide 53: Company Background
Hey, IN <S COMPANY BACKGROUND
Slide 54: Key milestones: Business Timeline
Key milestones: Crossed the USD 1 billion AUM mark Business Timeline 2016 2017 2018 2019 2020 Received NBFC license for SHFL commenced lending in Started MSME Lending in Reaches 27.1 lacs active Satin Finserv Ltd for MSME Received the Award of Feb18; BC agreement with FY17; Acquired TFSL in clients
Slide 55: Key milestones: Fund Raising Timeline
Key milestones: Crossed the USD 1 billion AUM mark Fund Raising Timeline 2015 2016 2017 2018 2019 Raised Rs.41.5 crore Raised Rs.250 crore In Apr’17, raised $10 Pref. Allotment: Exit of MV Mauritius from SBI FMO(3) via QIP in Oct’16; mn from ADB(4) ; Equity funding by (including warrants);
Slide 56: Differentiated Investment Choice
Differentiated Investment Choice... Investor confidence Marquee Shareholder Base As on Dec 31, 2019 7 rounds of equity capital raised with marquee investors Profitable exit to 4 investors QIP: Rs. 250 crore from marquee institutions in Oct 2016, Rs. 150 crore from large domestic MFs in Oct 201
Slide 57: Making a Difference to the Community
Making a Difference to the Community Health Check-up Camps We regularly organise health check-up Flood Relief Camps Support the Maharaja Agrasen Hospital Charitable camps along with campaigns focusing on Organised relief activities and distribution of Trust (MAHCT) health and hygiene ration to flood
Slide 58: Awards and Accolades
Awards and Accolades Mr. HP Singh, CMD, was conferred the ‘Golden Globe Tiger Awards’ at an awards ceremony in Malaysia Mr. HP Singh received the ‘Exemplary Leader’ Award Mr. Dev Verma, Chief Operating Officer, was presented the ‘Leader of the Year’ Award ‘Digital Innovation in Microfinance’
Slide 59: Contact information
Contact information Company (Investors & Media) : Ms. Aditi Singh Head – Capital Markets & Investor Relations E: aditi.singh@satincreditcare.com T: +91 124 4715 400 (Ext – 222) www.satincreditcare.com 58
Slide 60: Thank You
Thank You SATIN CREDITCARE NETWORK LTD. Reaching out!
Satin Creditcare Network — Q3 FY2020 Earnings Presentation on 6ix