Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q1 FY2022 Earnings Presentation
54 slides from Au Small Finance Bank's earnings presentation, Aug 6, 2021
Slide 1: Exchange filing cover letter
AU SMALL FINANCE BANK Ref. No.: AUSFB/SEC/2021-22/154 Date: 06 th August 2021 A SCHEJ>UUI> COMMERCIAL BANK To, National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Da lal Street, Bandra (East), Mumbai 400051, Mumbai 400001,
Slide 2: Investor Presentation Q1FY22
AU 0101 AU SMALL FINANCE INVESTOR PRESENTATION QVFY22 =< Tech-led | Retail Focused | Custome ntric | Well Capitalized | Inclusive
Slide 3: Table of Contents
Table of Contents Management Update Tech Update Operating & Financial Highlights Branch Banking Update Asset Quality Other Key Updates 2
Slide 4: 1. Management Update
1. Management Update
Slide 5: Executive summary
Executive summary Operating environment ▪ Focus of the Bank was on PCS (Protection, Cure and Security) for employees with the Bank taking several steps including vaccination drives, facilitating medical care and offering financial and educational assistance for affected families; Unfortunately, we l
Slide 6: Our strategy
Our strategy OUR LONG TERM OBJECTIVES Build a credible, trustworthy and sustainable bank that inspires generations to come Act a responsible catalyst to serve financial needs of the unserved and unreached Bring efficiency in intermediation between savers and borrowers Unlock human potential OUR STRA
Slide 7: Building a strong foundation with focused strategy & execution
Building a strong foundation with focused strategy & execution Commercial Banking (15% of Gr. Advances) ▪ Complete suite of Fund based and Non Fund based products ▪ Building team in transaction banking to drive fee revenue ▪ Developing Merchant offerings with UPI QR (1Lac+), POS as entry point Home
Slide 8: Building a tech-led ecosystem
Building a tech-led ecosystem Launched AU 0101 Enhanced Video Banking Launched credit card Increased Digitization Our digital bank Significantly expanded use cases for First and only Small Finance Bank ~90% of our sales team is now Transactions, Services with Credit Cards for customers digitized Gro
Slide 9: Well entrenched contiguous distribution franchise
Well entrenched contiguous distribution franchise 15 States and 2 UTs 758 Touchpoints 4402 ATMs (742 Branches1 , 16 BCs) Break up of Branches Sr. No. States & UTs Total Branches Distribution of Touch Points# 1 Rajasthan 323 Jammu & Kashmir 2 Madhya Pradesh 109 Punjab Himachal Pradesh 3 Gujarat 109 H
Slide 10: 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 26% (25%) 35% (36%) Urban Core 65% 74% (64%) (75%) 1% MAHARASHTRA 1% 2% 1% 1% 3% RAJASTHAN 4% 13% 5% DELHI NCR 27% 17% 6% PUNJAB GUJARAT 4% 10% HARYANA MADHYA PRADESH 10% HIMACHAL PRADESH 43% 15
Slide 11: 2. Operating & Financial Highlights
2. Operating & Financial Highlights
Slide 12: Q1'FY22 Key highlights
Q1’FY22 Key highlights ₹ 1,896 Cr Disbursements1 ▪ Disbursements were subdued in Q1FY22 due to the 2nd wave impact; up 75% YoY partly due to +75% YoY base effect and gradual recovery seen in June month ₹ 36,635 Cr ▪ Deposits continue to scale driven by increasing brand awareness, branch expansion an
Slide 13: Q1'FY22 Key Highlights
Q1’FY22 Key Highlights 15 States and 2 UTs Touchpoints Customers Employees 758 20.2 lac 23,486 Vs. Vs. Vs. 655 17.9 lac 16,092 (30-Jun-20) (30-Jun-20) (30-Jun-20) Total B/S Assets Disbursements1 Loan AUM Deposits2 CASA Ratio3 ₹ Crore 16% 51,357 75% 1,896 22% 38% 37,014 26% 36,635 Vs. 44,267 1,086 30
Slide 14: Q1'FY22 Key Financial Highlights
Q1’FY22 Key Financial Highlights Total Income Net Interest Income PAT Net Worth ₹ Crore Profit (after tax) 201 15% 41% Income from 1,538 40% 724 from Aavas 24 6,490 11% proceeds sale of part stake in 1,410 27 177 203 4,588 Aavas 516 Financiers Ltd. 1,383 30-Jun-20 30-Jun-21 30-Jun-20 30-Jun-21 30-Ju
Slide 15: Spreads remained stable
Spreads remained stable Incremental Spreads AUM Spreads 16.0% 13.8% 15.0% 14.6% 14.2% 14.0% 14.0% 11.1% 11.7% 13.0% 12.0% 10.0% 11.0% 7.9% 8.0% 6.3% 9.0% 7.4% 7.7% 7.8% 6.0% 6.0% 7.0% 5.1% 5.9% 4.0% 5.4% 7.2% 5.0% 6.5% 6.3% 2.0% 0.0% 3.0% 30-Jun-20 31-Mar-21 30-Jun-21 30-Jun-20 31-Mar-21 30-Jun-21 D
Slide 16: Profit & Loss Statement (Q1'FY22)
Profit & Loss Statement (Q1’FY22) (All Figures in ₹ Crore) Q1'FY22 Q1'FY21 Y-o-Y Q4'FY21 Q-o-Q Income Interest Earned 1,353 1,184 14% 1,292 5% ▪ NII growth at 40% YoY aided by Interest Expended 629 668 -6% 637 -1% reduction in CoF by 88bps and AUM Net Interest Income 724 516 40% 656 10% growth Other
Slide 17: Balance Sheet as on 30th June 2021
Balance Sheet as on 30th June 2021 (All Figures in ₹ Crore) 30 June'21 30 June'20 Y-o-Y 31 Mar'21 Q-o-Q Liabilities ▪ Net worth increased by 41% YoY and 3% Shareholders Fund 6,490 4,588 41% 6,275 3% QoQ Deposits 37,014 26,734 38% 35,979 3% Borrowings 6,101 11,454 -47% 7,030 -13% Other Liabilities an
Slide 18: Other Income (Q1'FY22)
Other Income (Q1’FY22) (All Figures in ₹ Crore) Q1'FY22 Q1'FY21 Y-o-Y Q4'FY21 Q-o-Q Loan Assets Processing & Other Fees 29 15 95% 133 -78% General Banking, Cross Sell & Deposits related fees 32 15 106% 43 -27% PSLC Fees 18 8 118% 104 -83% Miscellaneous 4 2 156% 3 38% Core Other Income 83 40 107% 284
Slide 19: Profitability Trends
Profitability Trends ROA* (%) RoE* (%) 0.2%* 2.1%* 1.6% 1.4% 1.6% 15.8% 12.0% 12.7% 30-Jun-20 31-Mar-21 30-Jun-21 30-Jun-20 31-Mar-21 30-Jun-21 ROA1 / ROE – Components NII (%) Other Income(%) Opex (%) 4.6% 5.6% 0.2%* 5.3% 4.8% 2.7% 3.6% 1.9% 2.3% 1.4% 30-Jun-20 31-Mar-21 30-Jun-21 30-Jun-20 31-Mar-2
Slide 20: 3. Asset Quality
3. Asset Quality
Slide 21: Asset quality overview
Asset quality overview How the situation evolved in Q1’FY22 ▪ Q1’FY22 was a challenging quarter - impact was more severe than the first wave in terms of health and also impact on rural ▪ Main segments impacted in Q1FY22 were similar to the one’s during the first wave – related to education, tourism,
Slide 22: Asset quality – few observations
Asset quality – few observations Strong correlation in our collection efficiency and on ground mobility Our underwriting reflects in performance of NTC customer 3.2% 120% Sharp bounce back in collection efficiencies soon 40% after activity levels improved 2.6% 2.5% 20% 2.1% 100% 0% 1.9% 1.6% 1.5% -2
Slide 23: Asset Quality
Asset Quality Gross AUM Disbursements All figures in ₹ Cr Gross NPA Advances Yield (Q1’FY22) ▪ GNPA reduced sequentially by Rs. 7 Cr to ₹ 1,496 Cr and GNPA ratio Wheels 12,445 740 14.6% 661 remained flat QoQ at 4.3% of Gross Advances SBL-MSME 13,669 574 15.1% 101 ▪ As on 30th Jun’21 Home Loan 1,420
Slide 24: Overview of Provisions
Overview of Provisions Jun'21 Mar'21 (All Figures in ₹ Crore) No. of No. of Loans Provisions Coverage Loans Provisions Coverage facilities facilities GNPA 59,984 1,496 730 49% 53,962 1,503 747 50% Covid related Restructuring 21,391 1,265 207 16% 6,006 641 115 18% Contingency Provisions 190 70 Provis
Slide 25: Credit Cost Overview
Credit Cost Overview Credit Cost - Net Impact on P&L Q1’FY22 Q1’FY21 Q4’FY21 (All Figures in ₹ Crore) Repossession Loss 6 2 11 POS Loss 4 1 13 Write off 0 0 0 Less: Bad Debt Recovery -1 0 -3 Net Credit Loss (A) 9 2 22 Net Credit Loss (as % of Avg. Total Assets) 0.1% 0.0% 0.2% Provision on NPA (B) -1
Slide 26: 4. Tech Update
4. Tech Update
Slide 27: India is at the cusp of digital revolution in Banking
India is at the cusp of digital revolution in Banking Significant acceleration in customer adoption of digital* Banking could be next** 3.8 Cr AADHAR daily avg. authentications ~18k Cr UPI daily avg. 70 Cr transactions value Internet users 8 Account aggregators with in-principle license 20 Cr 15 Cr
Slide 28: We have been preparing to transition to the new digital world
We have been preparing to transition to the new digital world • Increasing digital offerings and building compelling 01 Digital g customer experience across touch-points • Focus on digitization and automation of internal 02 Digitization processes to increase productivity Our Tech Pillars • Using ana
Slide 29: We recently launched AU 0101 – our digital bank
We recently launched AU 0101 – our digital bank… Simple and intuitive interface Best in class onboarding journeys with integrated Video KYC Personalised pre-approved offers Multiple channels to bank digitally 28
Slide 30: With a comprehensive suite of features
…With a comprehensive suite of features… Deposits Insurance Account opening in 5 simple steps ▪ Life, Health and Motor – All insurance from the comfort of home products at one place ▪ First bank to offer end-to-end mobile journey with multiple insurance companies Loans Investments Pre-approved offer
Slide 31: Simple onboarding journeys, fully integrated with Video KYC
And simple onboarding journeys, fully integrated with Video KYC Just 5 simple steps and a new AU Savings Account is open! **** **** **** Puts in mobile and Inputs Fills income Selects product and Completes Video PAN no. AADHAR details makes payment KYC Customer Journey 30
Slide 32: We also launched our Credit Cards offering to customers
We also launched our Credit Cards offering to customers ▪ First and only Small Finance Bank with Credit Cards for customers ▪ Attractive product features like Industry first digital device protection plan ▪ End-to-end digital onboarding, comprehensive card management features on app ▪ Partnership wi
Slide 33: Simple onboarding journey in 4 steps
With a simple onboarding journey in 4 steps Just 4 simple steps and a new AU Credit Card is issued!* Congratulations Your brand- new AU Credit card is on its way and should reach you in next 7 days. Accepts pre Selects a card Shares personal Fills employment Credit Card gets approved offer details d
Slide 34: AU 0101 – Offers multiple channels to bank digitally
AU 0101 – Offers multiple channels to bank digitally… Mobile and Internet Banking Video Banking Customer Care ~4.5 Lacs ~6k 1800 1200 1200 | customercare@aubank.in Users till Q1 Video calls in one month of 6 Lacs+ calls in Q1 launch Missed Call Banking Chatbot - Auro WhatsApp Banking 1800 120 2586 |
Slide 35: Including a leading Video Banking proposition
… Including a leading Video Banking proposition • Potential to replace branch banking channel over time Convenient No location constraint • Acquisitions, servicing & transactions Personal (e.g. money transfer) One-to-one connect for assistance • State-of-the art Video Banking Human touch center in N
Slide 36: Driving digital banking adoption
Driving digital banking adoption Awareness Adoption Acquisition Every team at the bank plays a prominent role in driving digital bank adoption Bank Customers Tech Savvy Acquire Convert (TS) TS to DC Customers* Digital Customers Technology Branch Banking Customer Service (DC)** Digital Marketing Asse
Slide 37: Leading to accelerated digital adoption post AU 0101 launch
Leading to accelerated digital adoption post AU 0101 launch Tech Savvy Monthly Active Customer Base Digital Customers Daily Active Users Customers Users ~20 Lacs ~10 Lacs ~4.5 Lacs ~2.5 Lacs ~50K Registrations* Usage* Engagement* 2x 25% 30% Increase in Increase in Increase in daily registrations Mon
Slide 38: AU UPI QR – An offering for small merchants
AU UPI QR – An offering for small merchants ▪ Growth hampered in Q1 due to pandemic, Installations now normalizing o ~1 Lac QRs installed by Q1 o 60% activation rate o Executed 17 Lacs transactions in Q1 – 13% growth over Q4 FY 21 ▪ Launched pilot for unsecured lending ▪ Target to scale by ~5x by FY
Slide 39: Digitization – Continued progress to automate and digitize
Digitization – Continued progress to automate and digitize across sales and operations Secured Business Loan Branch Banking ▪ Stabilized mobile app based assisted digital journey for end- ▪ 90% of the deposit accounts onboarded digitally by tabs to-end customer onboarding ▪ Used by 2.5K+ sales offic
Slide 40: Data & Analytics
Data & Analytics ▪ Using bank, bureau and alternate data sources to drive personalized offers and communications – for both existing and new customers ▪ Where we are: o ~ 2.25 lacs pre-approved offers extended in Credit Card, Personal Loans and Auto Loans o Working with multiple partners to augment
Slide 41: Offers and Engagement aiding Activation and Deepening
Offers and Engagement aiding Activation and Deepening AU 0101 Launched for Customers Brand Offers in Q1FY22 Communication drive for downloads & adoption 40
Slide 42: 5. Branch Banking Update
5. Branch Banking Update
Slide 43: Scale retail-focussed sustainable liability franchise
Scale retail-focussed sustainable liability 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 (Bank Launc
Slide 44: Branch Banking - Snapshot
Branch Banking - Snapshot Growing Deposit1 Franchise Average Monthly Balance ▪ CASA deposits grew by 15% QoQ ₹ Crore 42% 3% 40,000 34,928 ▪ Contribution of Individual driven 33,627 34,331 35,359 1,150 banking has gone up from 41% to 30,000 1,164 8,004 1,632 1,387 24,628 6,408 57% YoY 6,643 8,102 668
Slide 45: Liability products launched during Q1'FY22
Liability products launched during Q1’FY22 44
Slide 46: 6. Other Key Updates
6. Other Key Updates
Slide 47: Financial & Digital Inclusion
Financial & Digital Inclusion Universal Access to Financial Services ▪ 31% (238) of our total touchpoints/branches are in unbanked rural centres (Tier-VI, population less than 5,000 & Tier-V, population less than 10,000) ▪ Presence in the Special Focus Districts covering 25 Aspirational districts, 9
Slide 48: CSR – AU Foundation
CSR – AU Foundation FY 20-21 Q1 FY 21-22 COVID-19 • Facilitated deployment of more than 117 oxygen Relief supports • Financial support of ₹2 Cr. to PM Cares fund. concentrators, besides other support on medical • Food & Ration distribution (2.5 Lakhs+ hot equipment. cooked meals and ration Kits). •
Slide 49: Marquee Shareholders Base – As on 30th June 2021
Marquee Shareholders Base – As on 30th June 2021 Shareholding Pattern Sr. Key Shareholders Holding on 30 Jun 2021 No. 1 Promoter & Promoter Group 28.4% Foreign (FC,FPI, Promoter & Promoter FII,NRI): 35.1% Group: 28.4% 2 Capital Group 4.9% 3 Wasatch 4.6% 4 Temasek Holding 4.6% 5 Kotak MF & AIF 4.5% 6
Slide 50: 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 51: IS COMING
IS COMING
Slide 52: Thank You
THANK YOU For Investor queries contact (details in QR Code): Prince Tiwari | Aseem Pant Email: investorrelations@aubank.in
Slide 53: Abbreviations
Abbreviations AUM Asset Under Management NTC New to Credit BSBDA Basic Savings Bank Deposit A/C OPEX Operating Expenses CASA Current Account Deposits and Savings Account Deposit P&L Profit & Loss Statement CRAR Capital Adequacy Ratio PAT Profit After Tax DPD Days Past Due PMJJBY Pradhan Mantri Jeeva
Slide 54: 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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