Fino Payments Bank Ltd. · NSE:FINOPB
Fino Payments Bank — Q2 FY23 Earnings Presentation
49 slides from Fino Payments Bank's earnings presentation, Nov 1, 2022
Slide 1: Exchange filing cover letter for investor presentation
November 01, 2022 BSE Limited National Stock Exchange of India Limited Corporate Relationship Department, Exchange Plaza, 5th Floor, 2nd Floor, New Trading Wing, Plot No. C/1, G Block, Rotunda Building, P.J. Towers, Bandra ‐ Kurla Complex, Dalal Street, Mumbai‐ 400 001 Bandra (E), Mumbai ‐ 400 051 (
Slide 2: Q2 / H1 FY23 Investor Presentation
Classification: Internal Q2 / H1 FY23 Investor Presentation 1st November 2022 Classification: Internal Classified by: Gaurav Barmera
Slide 3: Table of Contents
Classification: Internal Table of Contents Financial Highlights Overview Q2FY23/H1FY23 Financial Performance Revenue Mix Across Products Product Portfolio Key Focus Area Outlook Q2FY23/H1FY23 Performance Update Product Strategy and Performance Trends Business Verticals Highlights Business Model Unde
Slide 4: Financial Performance
Classification: Internal FINANCIAL PERFORMANCE Classification: Internal Classified by: Gaurav Barmera 3
Slide 5: Key Highlights: Q2'23 / H1'23
Classification: Internal KEY HIGHLIGHTS : Q2’23 / H1’23 Performance Highlight o Revenue grew YoY by 32% in H1’23 & 25% in Q2’23 o EBITDA margin grew from 8.1% in Q1’23 to 10.1% in Q2’23 o Operating leverage in play – Cost / Income Ratio @ 26% v/s. 30% in Q2’22 o PAT Margin improved from 3.5% in Q1’2
Slide 6: QoQ Performance
Classification: Internal QoQ Performance Particulars Q2FY23 Q1FY23 QoQ %QoQ (INR Cr) Revenue 303.3 289.1 14.2 4.9% Product Cost 209.5 201.5 8.0 3.9% Net Revenue 93.8 87.6 6.2 7.2% Operating Cost 63.3 64.0 (0.7) -1.0% EBITDA 30.5 23.6 6.9 29.2% PAT 13.8 10.1 3.7 36.6% Net Revenue Margin 30.9% 30.3% -
Slide 7: Revenue and EBITDA – Growth
Classification: Internal Revenue and EBITDA – Growth Revenue (INR Cr) +21% +34% +30% CAGR CAGR CAGR 1,009 592.4 303.3 791 448.4 242.2 691 330.5 179.2 FY20 FY21 FY22 H1FY21 H1FY22 H1FY23 Q2FY21 Q2FY22 Q2FY23 EBITDA (INR Cr) -ive to +52% +53% +ive CAGR CAGR 84.4 54.1 30.5 52.0 17.9 29.0 23.5 13.0 (0.2
Slide 8: PAT and Cost-Income
Classification: Internal PAT and Cost-Income PAT (INR Cr) -ive to +93% +75% +ive CAGR CAGR 42.7 23.9 13.8 20.5 7.9 (4.6%) 2.6% 4.2% 11.0 6.4 4.5 1.9% 2.5% 4.0% 2.5% 3.3% 4.6% (32.1) FY20 FY21 FY22 H1FY21 H1FY22 H1FY23 Q2FY21 Q2FY22 Q2FY23 Cost-Income (%) 9% 9% 9% 37% 36% 35% 31% 31% 30% 28% 27% 26%
Slide 9: Revenue Mix Across Products: Q2FY23 and H1FY23
Classification: Internal Revenue Mix Across Products : Q2FY23 and H1FY23 Q2FY22 v/s Q2FY23 H1FY22 v/s H1FY23 592.4 303.3 9%, 51.7 9%, 27.3 10%, 61.0 242.2 10%, 29.6 448.4 4%, 10.4 4%, 19.7 18%, 43.8 18%, 82.2 36%, 211.8 35%, 104.9 34%, 81.9 33%, 145.8 11%, 34.2 11%, 67.8 9%, 22.6 9%, 28.7 10%, 45.9
Slide 10: Revenue Mix Across Parameters: Q2FY23
Classification: Internal Revenue Mix Across Parameters : Q2FY23 Income Breakup: Transaction & Subscription Income Breakup: Own and Open Banking Channel 30% 36% Q2FY23 70% 64% 38% 25% Q1FY23 75% 62% Transaction Income Subscription Own Banking Channel Open Banking Channel Classification: Internal Clas
Slide 11: Product Portfolio: Diversified Offerings to meet Various Customer Needs
Classification: Internal Product Portfolio: Diversified Offerings to meet Various Customer Needs Product Q2FY23 Revenue Q2FY23 H1FY23 Revenue H1FY23 (INR Cr); Margins Drivers (INR Cr); Margins YoY Growth YoY Growth 54 58% High growth high margin; customer 95 58% CASA 97% ownership; path to annuity 1
Slide 12: Key Focus Area: CASA
Classification: Internal Key Focus Area : CASA Balance per Account Growth No. of CASA Accounts (in 000’S) Accounts Opened per Day - Shubh Account (INR) 7,540 13.8 1,490 1,394 4,550 8.3 2,865 1,107 5.2 H1FY21 H1FY22 H1FY23 H1FY21 H1FY22 H1FY23 FY21 FY22 H1FY23 Average minimum balance ₹ 1490+ by new S
Slide 13: Key Focus Area: CMS
Classification: Internal Key Focus Area : CMS Number of CMS Clients Throughput (INR Cr) Avg. Revenue Per Txn (INR) 113 161 19,635 90 110 58 9,948 61 3,488 H1FY21 H1FY22 H1FY23 H1FY21 H1FY22 H1FY23 H1FY21 H1FY22 H1FY23 Throughput doubled in FY22 & on course to further double in FY23, 82 % of total th
Slide 14: Strong Growth Outlook
Classification: Internal Strong Growth Outlook Maintain Revenue Growth on back of enhancing distribution network – aiming 2 million merchants Transaction Business Monetisation to Customer Ownership – aiming 20 million customers Operating leverage key contributor to PAT margins. Opportunity to levera
Slide 15: Fino 1.0 to Fino 2.0
Fino Payments Bank Classification: Internal Solution to a common man’s problem FINO 1.0 FINO 2.0 CASA Keep my money Mutual Fund / International safe Insurance Remittance DMT Send money home Referral Loan Receive Money from Abroad FinoPay App Micro ATM / Neighbourhood AEPS Banking First Preferred I w
Slide 16: Annexures
Classification: Internal ANNEXURES Classification: Internal Classified by: Gaurav Barmera 15
Slide 17: Q2 / H1 FY23 – Detailed Analysis
Classification: Internal Q2 / H1 FY 23 – Detailed Analysis Classification: Internal Classified by: Gaurav Barmera 16
Slide 18: Bank Level Profit & Loss
Bank Level Profit & Loss Classification: Internal Revenue growth of 25% in Q2FY23 leading to a YOY PAT growth of 75% Particulars Q2FY23 Q1FY23 Q2FY22 QOQ(%) YOY (%) H1FY23 H1FY22 YOY (%) (INR Cr) Revenue 303.3 289.1 242.2 4.9% 25 % 592.4 448.4 32% Product Cost 209.5 201.5 160.8 3.9% 30 % 411.0 296.3
Slide 19: Industry Leading Performance Highlights in Q2FY23
Industry Leading Performance Highlights in Q2FY23 Classification: Internal Demonstrating strong growth in business volumes, revenue, and profitability 28.5 Cr ₹ 60.5k Cr 12.2 lac 7.6 Lacs Transactions on Fino platforms Total Throughput Registered merchants on Fino Accounts Opened 90 % 40% 51 % 54 %
Slide 20: Industry Leading Performance Highlights in H1FY23
Industry Leading Performance Highlights in H1FY23 Classification: Internal Demonstrating strong growth in business volumes, revenue, and profitability 53.5 Cr ₹ 1.21 Lakh Cr 12.2 lac 13.8 Lacs Transactions on Fino platforms Total Throughput Registered merchants on Fino Accounts Opened 95% 43% 51% 66
Slide 21: Overall PAT & ROE
Classification: Internal Overall PAT & ROE Profit After Tax (in ₹ cr) PAT for Q2FY23 at 17.6 ₹13.8 Cr 13.8 14.1 10.10 7.58 6.52 7.9 75% growth over Q2FY22 4.52 3.1 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Return on Equity 20.7% 20.0% 18.7% 17.7% Annualized ROE of Q2FY23 14.8% 1
Slide 22: Digital Throughput is a Material Growth Driver Now
Digital Throughput is a Material Growth Driver Now Classification: Internal The pathway to a 2.0 journey is seamlessly getting created by traction in digital throughput Telangana , Karnataka and Andhra Pradesh has the highest digital transaction per customer Q2FY23 Throughput Mix (in INR Cr) Digital
Slide 23: Product Strategy & Performance Trends
Classification: Internal Product Strategy & Performance Trends Classification: Internal Classified by: Gaurav Barmera 22
Slide 24: CASA and Debit Card
CASA and Debit Card Classification: Internal Subscription based account opening now unlocking the potential of annuity through renewals Renewal income growth in Q2FY23 was 153 % YOY leading to an exponential growth in our annuity Revenue (INR Crore) business 22.7 Accounts opened in Q2 FY 23 is 7.6 l
Slide 25: CASA and Debit Cards
CASA and Debit Cards Classification: Internal A high margin-high growth product now showing robust annuity income through subscription renewal (in lacs) Accounts Opened Subscription Revenue (in ₹ cr) 52.0 25 55 59.5 22.7 45.9 20.9 20 19.4 45 16.7 15.0 15.5 15 13.4 35 25.7 12.1 11.1 10.6 25 20.2 10 7
Slide 26: Cash Management Services
Cash Management Services Classification: Internal Strong potential of cash digitization in India continues to reflect on sustained growth in CMS Throughput almost doubled YOY to grow 94% in Q2FY23 Revenue (INR Crore) No. of partners on CMS up from 152 as on 30th June 2022 to 161 as on 30th September
Slide 27: Cash Management Services (1/2)
Cash Management Services (1/2) Classification: Internal Accelerated growth path helped by aggressive partner on-boarding (in ₹ cr) Throughput (in ₹ cr) Revenue Take Rate 24.2 10,464 20.9 9,171 18.1 0.29% 0.27%0.25%0.28% 12.9 13.0 14.3 7,864 0.24% 0.24%0.24%0.23%0.23%0.23% 5,389 6,074 10.3 11.4 3,830
Slide 28: AEPS
AEPS Classification: Internal Demonstrating robust growth in a faster growing market in the cash withdrawal space The AEPS industry was almost 5x the size of micro-ATM industry in Q2FY23 Revenue (INR Crore) The AEPS industry grew by 13% YoY in Q2FY23 wherein the throughput of Fino ecosystem grew by
Slide 29: Micro-ATM
Micro-ATM Classification: Internal Mainstay for Customer Acquisition Continue to be the dominant player in the Industry - Cumulative market share of Top 5 Revenue (INR Crore) players at 83% as of September’22 – Fino’s share in Micro-ATMs is more than that of the top banks like HDFC Bank, SBI, Kotak
Slide 30: Remittance
Remittance Classification: Internal The primary hook product in Fino’s ecosystem Remittance is the hook product that attracts footfall into the Fino ecosystem Revenue (INR Crore) Fino is one of the early movers in the remittance product and is still a market leader 28% YOY growth in revenue as well
Slide 31: Fino Business Model
Classification: Internal FINO BUSINESS MODEL Classification: Internal Classified by: Gaurav Barmera 30
Slide 32: Business Model of Fino Payments Bank
Business Model of Fino Payments Bank Classification: Internal Moving Customers up the Fintech Value Chain Level 4 o Significant trust equity built Engagement o Digital native customers have better renewal prospects and a strong future potential for upsell and cross sell Online Payments Level 3 o Com
Slide 33: Strong Progress Over Last 5 Years
Strong Progress Over Last 5 Years Classification: Internal Momentum Continues Products Launched Combined Merchant Network 2022 Aadhar-Pay, Go digit shopkeeper’s policy, Physical Passbook, Credit card bill payment H1FY23 12.2 2021 Minor Savings Accounts, Diversified CMS partners, Merchant loan referr
Slide 34: Expanding Reach: Growing Distribution Network
Classification: Internal Expanding Reach: Growing Distribution Network TOTAL MERCHANTS MERCHANT COUNT HEAT-MAP 12,24,943 11,42,061 10,20,437 8,66,034 8,08,563 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Merchant Count As on 30.09.2022 YoY Growth Total Merchants 12,24,943 51.5 % Own Channel Merchants 576,020
Slide 35: Driving Social and Digital Transformation: Touching Lives
Classification: Internal Driving Social and Digital Transformation: Touching Lives Name: Chandra (Arrah) | Occupation: Samosa seller Problems Faced: Visiting branch and deposit of saving REMOVING BANKING Fino’s Solution: Doorstep/neighborhood banking has solved his problem of BARRIERS visiting a ban
Slide 36: Understanding Fino's Products
Classification: Internal Understanding Fino’s Products Classification: Internal Classified by: Gaurav Barmera 35
Slide 37: Current and Savings Account (1/2)
Classification: Internal Current and Savings Account (1/2) Defining the problem statement, customer segment, potential and market size opportunity Use Case: A bank branch in tier 3 and below city is generally very crowded and is far away. It is also open during limited banking hours on weekdays. Thr
Slide 38: Current and Savings Account (2/2)
Classification: Internal Current and Savings Account (2/2) Understanding the process flow of an account opening Fino Merchant Portal 2 Revenue source Subscription Fee Merchant charged to Customer 1 3 1 Customer approaches a merchant for account opening Customer 2 Merchant seeks various customer deta
Slide 39: Cash Management Services (1/2)
Classification: Internal Cash Management Services (1/2) Defining the problem statement, customer segment, potential and Fino’s business value Use Case: Companies which collect cash from their customers need to deposit the same at a bank branch for money in the account. They do the same at a nearest
Slide 40: Cash Management Services (2/2)
Classification: Internal Cash Management Services (2/2) Understanding the process flow of a CMS transaction 3 Revenue source 2 Merchant Account with Fino Bank Fee Income from B2B partners Customer’s bank account Merchant 1 1 Delivery agent/ collection agent/ customer visits merchant point with cash
Slide 41: Micro-ATM (1/2)
Classification: Internal Micro-ATM (1/2) Defining problem statement, customer segment, potential and Fino’s business volume and value Use Case: Beyond the metro and tier 1 cities, ATM penetration is low. Customers have to travel a distance to withdraw cash. The genesis of micro- ATM is to facilitate
Slide 42: Micro-ATM (2/2)
Classification: Internal Micro-ATM (2/2) Understanding the process flow of an MATM transaction 3 Merchant Account with 2 Fino Bank Customer’s bank account 4 Merchant 1 1 Customer shares his debit card to the merchant 5 Merchant inserts the card in his/ her micro-ATM handheld device – 2 device is con
Slide 43: AEPS (1/2)
Classification: Internal AEPS (1/2) Defining problem statement, customer segment, potential, market size and Fino’s business value Use Case: Customers often don’t carry their ATM cards with them. Many at the bottom of the pyramid may not even have an ATM card. Most ATM kiosks will not be suitable fo
Slide 44: AEPS (2/2)
Classification: Internal AEPS (2/2) Understanding the process flow of an AEPS transaction 3 Merchant Account with 2 Fino Bank Customer’s bank account 4 Merchant 1 1 Customer gives his fingerprint on bio-authentication device of the merchant 5 2 The device is connected to network and also to the merc
Slide 45: Remittance (1/2)
Classification: Internal Remittance (1/2) Defining problem statement, customer segment, potential, market size and Fino’s business value Use Case: Customers having cash with them can visit a merchant point to transfer the same to a bank account on the beneficiary side. Remittance is essentially a ca
Slide 46: Remittance (2/2)
Classification: Internal Remittance (2/2) Understanding the process flow of a remittance transaction 3 Merchant Credit in Account with beneficiary 2 Fino Bank bank account Merchant 1 Customer pays cash to the merchant for transfer to beneficiary account – separate charges for transaction is also pai
Slide 47: Open Banking Platform (1/2)
Classification: Internal Open Banking Platform (1/2) Defining the problem statement, customer segment, potential and market size opportunity Use Case: Fintech players offering various payment products require a bank at the back-end to process a transaction. Being a bank, Fino can offer its technolog
Slide 48: Open Banking Platform (2/2)
Classification: Internal Open Banking Platform (2/2) Understanding the process flow of a remittance transaction 1 2 3 Customer of Open Merchant of Open Open Banking Fino’s Technology Banking partner Banking partner partner Platform 1 Customers visit the merchant points of the Open Banking partner (A
Slide 49: Thank You
Classification: Internal Thank You Classification: Internal Classified by: Gaurav Barmera 48