Muthoot Finance Ltd · NSE:MUTHOOTFIN
Muthoot Finance — Q3 FY2017 Earnings Presentation
51 slides from Muthoot Finance's earnings presentation, December 2016
Slide 1: Financial Results Q3 FY 2017
Financial Results Q3 FY 2017 December 2016 MUTHOOT FINANCE LIMITED
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT This presentation may include statements, which may constitute forward-looking statements. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, business development, market position,
Slide 3: Muthoot Finance: Driving Inclusive Growth
MUTHOOT FINANCE: DRIVING INCLUSIVE GROWTH o India’s largest gold financing company (by loan portfolio) o Trusted pan-India brand in the gold loans sector; revolutionised India’s gold banking o Our intervention has empowered millions of people across the social pyramid Multiple service offerings CORE
Slide 4: MFIN - A Glimpse
MFIN - A GLIMPSE 29 147 tonnes States/Union territory presence Gold jewellery kept as security 4,300+ 350,000+ Pan-India branches Retail investor base across debenture and subordinated debt portfolio 24,000+ 130,000+ Team members Customers served every day ` 269,625 mn Retail Loan Assets Under Manag
Slide 5: Shareholding Pattern
SHAREHOLDING PATTERN Strong promoter interest in business with 75% stake 23.49 1.96 NSE Ticker MUTHOOTFIN (%) Shareholding as on December 31, 2016 BSE Ticker Promoters & Relatives 533398 FII, FC, MF & Others Public Market Capitalisation (as on December 31, 2016) ` 112,926 million 74.55 4
Slide 6: Dividend Payout
DIVIDEND PAYOUT Delivering consistent returns to stakeholders (%) FY 2016 FY 2015 FY 2014 FY 2013 FY 2012 Dividend (% )* 60 60 60 45 40 First Interim Dividend (%) 40 40 30 - - - Second Interim Dividend (%) 20 20 - - Final Dividend (%) - 20 10 45 40 Dividend Payout Ratio (%) 29.50 35.36 28.59 16.65 1
Slide 7: Geographical Presence
GEOGRAPHICAL PRESENCE A strong presence of 4308 branches across India (%) Branches region wise State wise Branch Network Jammu &Kashmir 15 6 Himachal Pradesh 4 Chandigarh Punjab 8 173 62 East West Uttarakhand 21 Haryana Delhi 15 126 228 North South Rajasthan Uttar Pradesh Assam 131 16 151 Bihar 17 (
Slide 8: Digital Initiatives
DIGITAL INITIATIVES Digital convenience for new gen & Millennium Customer acquisition Aadhaar based Electronic KYC Direct Credit Facility • Biometric KYC verification - Convenience • Loan proceeds credited to bank • No further KYC documents –Paperless account • Aadhar • NEFT/RTGS/IMPS mode of bank •
Slide 9: Digital Initiatives
DIGITAL INITIATIVES Online Gold Loan (OGL) • 8% of our active Gold loan Customers are transacting Online Muthoot Online iMuthoot App Mobile App • Fully digital channel to facilitate customers in • New Mobile Application for Android & iOS repayment of Loan and Interest from anywhere on • Multiple lan
Slide 10: Shareholder's Funds
SHAREHOLDER’S FUNDS Strong Capital Base Networth Dec-16 Sep-16 Jun-16 Mar-16 Dec-15 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Share Capital 3,995 3,991 3,991 3,990 3,980 0 0 Reserves & Surplus 60,830 57,901 54,924 52,202 50,477 21 5 Tota
Slide 11: Assets
ASSETS Core focus continues to be gold loan Gross retail loan assets under management Dec-16 Sep-16 Jun-16 Mar-16 Dec-15 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Gross retail loan assets 269,625 274,564 258,606 243,789 249,907 8 (2) und
Slide 12: Liabilities
LIABILITIES Stable sources of funding Dec-16 Sep-16 Jun-16 Mar-16 Dec-15 Growth Growth (` in million) (` in million) (` in million) (` in million) (` in million) YoY (%) QoQ (%) Secured Non-Convertible Debentures (Muthoot Gold 29,738 32,692 36,355 40,909 45,980 (35) (9) Bonds) Secured Non-Convertibl
Slide 13: Revenue & Profit
REVENUE & PROFIT Profit & Loss Statement (` in million) YoY YoY QoQ 9M FY 9M FY Q3 FY Q3 FY Q2 FY Q1 FY FY Growth Growth Growth 2017 2016 2017 2016 2017 2017 2016 (%) (%) (%) INCOME Interest Income 39,558 33,782 17 13,280 11,248 18 13,526 12,752 (2) 48,130 Other Income 777 455 71 184 164 12 336 256
Slide 14: Gold Loan Portfolio
GOLD LOAN PORTFOLIO Gaining scale over the years Gold Loan Assets Under Management (` in million) 300,000 273,980 269,025 260,004 249,409 250,000 244,173 258,226 243,355 216,179 233,499 200,000 157,281 150,000 100,000 73,417 50,000 21,790 6,431 7,569 14,201 33,001 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-0
Slide 15: Gold Holding
GOLD HOLDING Carrying the trust of millions of our customers Gold jewellery kept as security (In tonnes) 160 145 146 150 147 142 137 134 131 140 118 120 112 100 80 66 60 39 40 30 23 15 16 20 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Mar-16 Jun-16 Sep-16Dec
Slide 16: Geographical Spread of Gold Loan Portfolio
GEOGRAPHICAL SPREAD OF GOLD LOAN PORTFOLIO Diversified gold loan portfolio across India (%) 100 80 60 40 20 0 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Mar-16 Jun-16 Sep -16 Dec-16 East 0 1 1 2 3 4 5 6 6 6 7 7 7 7 West 3 4 5 8 8 10 11 13 15 16 17 18 18 18 North 13 13 14 1
Slide 17: Productivity
PRODUCTIVITY Widening presence with increasing gold loan business per branch Average Gold Loan Per Branch (` in million) 75 66.39 63.69 62.45 65 58.56 60.14 57.55 63.32 55.01 55 56.93 45 50.63 45.74 33.50 35 25.77 30.82 25 17.24 17.40 15 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13
Slide 18: Yield on Retail Loan and NIM
YIELD ON RETAIL LOAN AND NIM Yearly (%) Quarterly (%) 24.00 24.00 22.34 21.67 21.66 22.00 22.00 20.04 19.72 20.29 20.16 20.30 20.00 20.0019.52 20.27 18.45 19.94 19.72 19.47 19.31 18.05 18.00 18.00 16.00 16.00 14.00 14.00 11.43 11.38 11.09 11.25 11.07 11.17 11.69 11.38 10.75 12.00 10.81 10.84 12.00 9
Slide 19: Interest Spread
INTEREST SPREAD Yearly (%) Quarterly (%) 24 24.00 21.67 21.66 22 22.00 20.04 19.72 22.34 19.72 20.29 20.30 20.16 20 20.27 20.00 19.52 19.47 19.94 18.45 18 19.31 18.00 18.05 16 16.00 14 14.00 10.85 12.20 12.42 10.81 10.73 11.88 10.56 10.77 11.24 11.53 11.88 10.34 12 10.85 12.00 10.04 9.79 10.80 9.52
Slide 20: Return on Average Retail Loan Asset
RETURN ON AVERAGE RETAIL LOAN ASSET Attractive returns over the years Yearly (%) Quarterly (%) 4.50 4.40 4.45 4.21 4.50 4.37 4.25 4.28 4.30 4.05 4.25 3.94 4.24 4.00 4.00 3.75 3.46 3.75 3.50 3.32 3.50 3.49 3.22 3.25 3.25 2.99 3.00 3.00 2.97 3.03 2.75 2.75 2.50 2.50 Mar-07Mar-08Mar-09Mar-10Mar-11Mar-1
Slide 21: Non-Performing Assets & Bad Debts
NON-PERFORMING ASSETS & BAD DEBTS Non-Performing Assets (` in million) Dec-16 Sep-16 Jun-16 Mar-16 Dec-15 Gross Non-Performing Assets 7,863 6,016 5,618 7,025 6,391 Provision For Non-Performing 1,019 1,019 1,019 1,019 857 Assets Net Non-Performing Assets 6,844 4,997 4,599 6,006 5,462 % of Gross NPA o
Slide 22: Liability Mix
LIABILITY MIX Maintaining a diversified funding profile (%) 3 Secured Non-Convertible Debentures (Muthoot Gold Bonds) – ` 29,738 mn (14%) 2 13 14 Secured Non-Convertible Debentures – Listed – ` 29,474 mn (14%) Borrowings from Banks/Fis - ` 95,235 mn (46%) 9 14 Subordinated Debt – ` 17,969 mn (9%) Su
Slide 23: Credit Ratings
CREDIT RATINGS Highest Rating among gold loan companies Short-term Rating Amt of rating Rating Indicates (` in million) COMMERCIAL PAPER Very strong degree of safety with regard to timely CRISIL 40,000 CRISIL A1+ payment of financial obligation and carry lowest credit risk ICRA 2,000 ICRA A1+ Very s
Slide 24: Break-up of Gross Income
BREAK-UP OF GROSS INCOME Interest Income (` in million) Yearly Quarterly 60,000 60,000 53,641 49,077 48,130 50,000 45,280 42,703 50,000 39,558 40,000 40,000 33,782 30,000 30,000 22,983 20,000 20,000 13,280 11,248 13,526 12,752 10,000 6,062 10,775 10,000 2,236 3,579 0 0 Mar-07Mar-08Mar-09Mar-10Mar-11
Slide 25: Operating Expenses to Average Retail Loans
OPERATING EXPENSES TO AVERAGE RETAIL LOANS Operational efficiency over the years Yearly (%) Quarterly (%) 7.00 7.00 6.50 6.50 6.00 6.00 5.38 5.45 5.50 4.59 5.10 5.50 4.72 5.01 5.00 4.80 4.92 4.46 5.00 4.28 4.50 4.69 4.62 4.02 4.08 4.30 4.42 4.50 4.00 4.00 3.50 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-
Slide 26: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (` in Millions) Quarterly (` in Million) Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2017 2016 2017 2017 2017 2016 Personnel Expenses 6,418 6,304 5,917 5,453 4,145 2,209 1,169 677 1,734 1,582 1,896 1,849 5,479 4,81
Slide 27: Break-up of Operating Expenses
BREAK-UP OF OPERATING EXPENSES Yearly (%) Quarterly (%) Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2017 2016 2017 2017 2017 2016 Personnel Expenses 49 53 52 52 49 43 43 42 57 55 57 58 57 54 Rent 13 14 14 12 12 12 11 8 15 15 14 13 14 14 Advertisement 5
Slide 28: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY (Based on Income) Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 2017 2016 2017 2017 2017 2016 Interest expense to 46.31 48.71 53.08 52.34 52.10 44.83 43.49 49.94 44.34 49.21 42.83 42.83 43.33 49.47 Gross Inco
Slide 29: Profitability Ratios
PROFITABILITY RATIOS Yearly (%) Quarterly (%) (Based on Average Mar-16 Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Mar-10 Mar-09 Q3 FY Q3 FY Q2 FY Q1 FY 9M FY 9M FY Retail Loans) 2017 2016 2017 2017 2017 2016 Interest income to avg. 19.72 19.30 20.27 21.66 22.34 19.72 19.94 21.67 19.52 18.05 20.29 20.30 20.1
Slide 30: Profitability
PROFITABILITY Efforts getting rewarded Profitability at a glance (` in million) Yearly PBT PAT Quarterly PBT PAT 16,000 15,114 16,000 13,168 14,000 14,000 13,312 13,317 11,936 12,000 12,000 10,042 10,000 10,000 10,279 8,581 8,096 8,417 8,920 8,000 8,000 7,612 7,801 6,000 6,000 5,443 6,705 4,456 4,62
Slide 31: Net Worth
NET WORTH Steady capital position Share Capital and Reserves & Surplus (` in million) 70,000 64,825 58,915 60,000 54,457 61,892 50,835 56,192 50,000 42,646 40,000 29,257 37,356 30,000 20,000 13,344 10,000 1,598 2,234 3,712 5,845 0 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar-14 Mar- 15 Dec-1
Slide 32: Return on Equity
RETURN ON EQUITY Stable shareholder value creation Return on Average Equity Yearly (%) Quarterly (%) 55 30 51.52 50 48.10 45 25 41.90 19.65 40 18.37 18.78 18.91 35.10 34.00 20 35 33.90 30.15 13.95 13.79 30 15 25 19.50 10 20 15.13 15 5 14.35 10 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14
Slide 33: Capital Ratio
CAPITAL RATIO Maintaining capital well above the statutory requirement Capital Adequacy Ratio (%) Dec-16 Sep-16 Jun-16 Mar-16 Dec-15 Capital Adequacy Ratio 24.66 23.67 24.27 24.48 23.37 Tier-I 22.17 20.95 21.03 20.92 19.94 Tier-II 2.49 2.72 3.24 3.56 3.43 32
Slide 34: Market Value Ratio
MARKET VALUE RATIO Equity market valuation ratios indicate potential for upside Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 Q3 FY 2016 9M FY 2017 9M FY 2016 FY 2016 Earnings per share (`) - Basic 7.29 7.44 6.77 4.69 21.50 13.68 20.34 - Diluted 7.23 7.38 6.71 4.65 21.32 13.55 20.10 Dec-16 Sep-16 Jun-16 Mar-16 D
Slide 35: Capitalisation Ratios
CAPITALISATION RATIOS Headroom for further leveraging (` In million) Dec-16 Sep-16 Jun-16 Mar-16 Dec-15 Outside Liabilities 235,598 243,582 226,641 214,295 226,938 Cash & Bank Balances 13,377 16,181 12,481 6,791 13,027 Tangible Networth 64,773 61,839 58,862 56,146 54,412 Capital Gearing 3.43 3.68 3.
Slide 36: Team Strength
TEAM STRENGTH Groomed human capital over the years to meet growing business requirements (No. of Employees) 28,000 25,012 25,351 24,150 22,882 22,781 24,881 23,000 23,961 23,070 23,165 18,000 16,688 13,000 9,745 8,000 5,979 3,999 3,102 3,000 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Ma
Slide 37: Our Subsidiary: Asia Asset Finance PLC
OUR SUBSIDIARY & Muthoot Finance ASIA ASSET FINANCE PLC The unconventional finance company 36
Slide 38: Asia Asset Finance PLC – An Overview
ASIA ASSET FINANCE PLC – AN OVERVIEW Asia Asset Finance PLC, (AAF) Colombo, Sri Lanka became a foreign subsidiary of Muthoot Finance on December 31, 2014 . As on December 31, 2016, total holding in AAF stood at 503 million equity shares representing 60% of their total capital. The loan portfolio sta
Slide 39: Products
PRODUCTS o Fixed Deposits o Mortgage Loans o Leasing o Factoring o Business Loan o Short Term Loans o Personal Loan o Micro Finance o Group Personal Loan o Loan against Gold Jewellery o Corporate Loans 38
Slide 40: Branch Network
BRANCH NETWORK AAF has operations in various parts of Sri Lanka providing the best services and easy access to clients 39
Slide 41: Key Financial Parameters
Key Financial Parameters (LKR in millions) Particulars Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 9M FY 2017 FY 2016 LKR / INR 0.44929 0.44498 0.44908 0.44929 0.47124 Number of branches 15 15 15 15 15 Number of Employees 433 410 393 433 358 Loan Portfolio 8,560 8,053 7,421 8,560 6,854 Capital Adequacy Ratio (
Slide 42: Our Subsidiary: Muthoot Homefin
G) OUR SUBSIDIARY Muthoot Finance Muthoot Homefin 41
Slide 43: Muthoot Homefin – An Overview
MUTHOOT HOMEFIN – AN OVERVIEW Muthoot Homefin (India) Limited is a Housing Finance Company registered with The National Housing Bank (NHB). It is a subsidiary of Muthoot Finance Limited . As on December 31, 2016, Muthoot Finance holds 86% of equity capital of MHIL. MHIL focuses on extending affordab
Slide 44: Key Financial Parameters
Key Financial Parameters (` in millions) Particulars Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 9M FY 2017 FY 2016 Number of branches 8 8 2 8 2 Number of Sales Offices 110 39 39 110 0 Number of Employees 105 77 49 105 30 Loan Portfolio 2,040 946 441 2,040 315 Capital Adequacy Ratio (%) 64 115 177 64 226 Total
Slide 45: Our Subsidiary: Muthoot Insurance Brokers
G) OUR SUBSIDIARY Muthoot Finance @ Muthoot Insurance Brokers 44
Slide 46: Muthoot Insurance – An Overview
MUTHOOT INSURANCE – AN OVERVIEW MIBPL became a wholly owned subsidiary of Muthoot Finance Ltd in June 2016. MIBPL is an unlisted private limited company holding a licence to act as Direct Broker from IRDA since 2013. It is actively distributing both life and non-life insurance products of various in
Slide 47: Key Business Parameters
Key Business Parameters Particulars Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 9M FY 2017 FY 2016 Premium Collection (` in millions) 148 188 101 437 482 Number of Policies 114,133 130,008 136,212 389,353 458,652 46
Slide 48: Our Subsidiary: Belstar Investment and Finance
&) OU R SU BS IDIARY Muthoot Finance &y BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED A Subsidiary of Muthoot Finance Limited 47
Slide 49: Belstar Investment and Finance – An Overview
BELSTAR INVESTMENT AND FINANCE – AN OVERVIEW As Of December 2016 , Muthoot Finance holds 64.60% in BIFPL . BIFPL was incorporated on January 1988 at Bangalore and the Company was registered with the RBI in March 2001 as a Non- Banking Finance Company. The Company was reclassified as “NBFC- MFI” by R
Slide 50: Key Financial Parameters
Key Financial Parameters (` in millions) Particulars Q3 FY 2017 Q2 FY 2017 Q1 FY 2017 9M FY 2017 FY 2016 Number of branches 148 103 94 148 76 Number of Employees 1,008 828 705 1,008 561 Loan Portfolio 4,537 3,986 2,872 4,537 2,643 Capital Adequacy Ratio (%) 21 21 16 21 17 Total Revenue 295 230 179 7
Slide 51: Registered Office
REGISTERED OFFICE 2nd Floor, Muthoot Chambers Opposite Saritha Theatre Complex Banerji Road, Kochi Kerala – 682 018. India Tel: (91484) 2394712 Fax: (91484) 2396506 CIN: L65910KL1997PLC011300 RBI Reg No: N.16.00167 EMAIL (Individual & Corporate Investors) investors@muthootfinance.com (Institutional