Pnb Housing Finance Limited · NSE:PNBHOUSING
Pnb Housing Finance — Q1 FY2021 Earnings Presentation
68 slides from Pnb Housing Finance's earnings presentation, Jul 23, 2020
Slide 1: Investor Presentation filing letter to stock exchanges
@ pnb Housing ) II I ~ [ i ll erh~r Ki B~~t July 23, 2020 The SSE Limited, National Stock Exchange of India Limited, Listing Department, Listing Department Phiroze Jeejeebhoy Towers, "Exchange Plaza" Dalal Street, Sandra Kurla Complex, Mumbai - 400 001 Sandra (E), Mumbai- 400 051 Scrip Code: 540173
Slide 2: PNB Housing Finance Limited Investor Presentation July 2020
PNB Housing Finance Limited Investor Presentation July 2020 1
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by PNB Housing Finance Ltd (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any secur
Slide 4: About PNB Housing Finance
About PNB Housing Finance Housing
Slide 5: Leading Housing Finance Company
Leading Housing Finance Company Write-offs since Inception Asset Under Disbursement (on cumulative Management INR 694 Crore* disbursement) INR 83,495 Crore (US$ 92 mn) 10 bps (US$ 11,055 mn) Average Cost of GNPA Borrowing 2.32% on AUM 8.13%* 2.76% on Loan Assets Deposits 4 delivery Retail Loans /pro
Slide 6: FY21 Outlook
FY21 Outlook Disbursement AUM Retail AUM Operating Expenses Focus on lower risk Similar trajectory as in 5-10% reduction on >85% of Total AUM weighted retail FY 2019-20 absolute basis segment compared to FY19-20 Gross Margin Strengthening Spread ROA Balance Sheet 210-220 bps 300-315 bps 140-160 bps
Slide 7: Corporate book Initiatives undertaken in FY21
Corporate book Initiatives undertaken in FY21 Remedial Management Group Created under Managing Mandate to identify, discuss, Director to focus on resolution Comprises cross functional team plan and resolve accounts and management of corporate from various verticals through various available book acc
Slide 8: HFC Sector well placed...
HFC Sector well placed... Housing
Slide 9: India's Mortgage Market
India’s Mortgage Market Under penetrated mortgage market, rising urbanization coupled with increase in housing demand is leading to mortgage market expansion Indian mortgage market is significantly under-penetrated Trend in urbanization of population Mortgage to GDP Ratio (%) 2,500 2,242 35% 82% 2,1
Slide 10: Sustainable Growth of HFCs
Sustainable Growth of HFCs Portfolio Growth of HFCs Total Loan of all HFCs: INR 11.1 trillion as on Dec-19 31% 32% 26% 25% 25% Top 5 HFCs: 73% 21% 20% 22% 21% 20% 20% 22% 15% 19% 21% 15% 12% 9% 26.6% 11% 7% 6% 39.8% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Dec-19 Other Loans Overall Portfolio Home
Slide 11: Update for Q1 FY21
Update for Q1 FY21 Housing
Slide 12: Covid-19 Update
Covid-19 Update ▪ All branches are operational following hygiene and safe distancing protocols Business Operations and teams are working on rotation basis to ensure business continuity ▪ Q1 FY21 disbursements were at INR 694 crore; registered increasing trend Disbursements month on month ▪ Despite C
Slide 13: Moratorium
Moratorium Improving Trend Initiatives Undertaken Communication with customers through 56% extensive calling 49% 39% SMS to customers in a vernacular language on the impact of EMI moratorium 29% Tie-up with CIBIL for customer engagement drive AUM Retail Loan Continuous education resulted in around 5
Slide 14: Measures undertaken in Q1 FY20-21
Measures undertaken in Q1 FY20-21 April-20 May-20 June-20 • Involved in recovery • In-principle online • All branches opened and activities for delinquent sanctioning of loans started contributing to cases business volumes. • Resumption of on • Reference Generation of ground business • Teams/Partner
Slide 15: Measures undertaken in Q1 FY20-21
Measures undertaken in Q1 FY20-21 April-20 May-20 June-20 • Tightened the credit • Extensive training webinars • Underwriting of cases guidelines including norms conducted on credit policy sourced online on target customers / and our product offerings industries, methods of • Catering to subsequent
Slide 16: Business trends in Q1 FY20-21
Business trends in Q1 FY20-21 No. of Branches re-opened No. of Sanctions 80 2,854 22 434 1 0 Apr-20 May-20 Jun-20 Apr-20* May-20 Jun-20 * Pipeline of 538 accounts with in-principle online sanctions Disbursement (INR Crore) Collection Efficiency (%) 97.11% 97.13% 507 95.92% 186 0 Apr-20 May-20 Jun-20
Slide 17: Financial Performance of the Company
Financial Performance of the Company 16
Slide 18: Financial Highlights
Financial Highlights Disbursement (INR Crore) AUM (INR Crore) NII (INR Crore) 7,634 88,333 83,495 625 488 694 Q1FY20 Q1FY21 30-Jun-19 30-Jun-20 Q1FY20 Q1FY21 Pre-provision Operating Opex to ATA Profit (INR Crore) PAT (INR Crore) 578 284 0.56% 257 0.50% 405 Q1FY20 Q1FY21 Q1FY20 Q1FY21 Q1FY20 Q1FY21 R
Slide 19: Financial Highlights
Financial Highlights Average Yield Average Cost of Borrowing Spread 10.84% 10.32% 8.31% 8.13% 2.53% 2.19% Q1FY20 Q1FY21 Q1FY20 Q1FY21 Q1FY20 Q1FY21 NIM Gross Margin 3.14% 3.44% 2.66% 2.61% Q1FY20 Q1FY21 Q1FY20 Q1FY21 Ratios are calculated on Monthly Average Gross Margin is net of acquisition cost Fo
Slide 20: Long Term Fund Mobilisation
Long Term Fund Mobilisation Deposits Bank Term Loan • 2nd highest deposit mobilizer • Borrowed INR 1,377 crore during among HFCs; mobilized INR 993 Q1FY21; existing relationship with Bank Term Deposits crore during Q1FY21 28 banks Loan • The relationship with banks is post merger Fund NHB-refinance
Slide 21: Deposits
Deposits (INR Crore) Deposits as 20% % of total 19% 17% 20% resources 237,703 232,366 153,588 96,754 16,470 16,203 14,315 11,586 31-Mar-18 31-Mar-19 31-Mar-20 30-Jun-20 Deposit Outstanding No. of Deposit Accounts 20
Slide 22: Asset Liability Maturity profile
Asset Liability Maturity profile Graph as on 30-Jun-20 (INR Crore) 25,502 20,712 19,053 17,329 15,439 13,842 8,851 7,241 4,944 4,919 4,766 4,740 4,003 3,913 upto 1 month 1-3 months >3-6 months >6-12 months 1-3 years 3-5 years >5 years Total Assets Total Liabilities upto 1 >3-6 >6-12 Particulars As O
Slide 23: Expected Credit Loss (ECL) Provisions
Expected Credit Loss (ECL) Provisions Classification of the Assets based on the ECL computation under Ind AS: Particulars (INR Crore) 30-June-19 31-Mar-20 30-June-20 Gross Stage 3 (GNPA) 645.10 1,856.23 1,878.87 % portfolio in Stage 3 (GNPA%) 0.85% 2.75% 2.76% ECL Provision Stage 3* 149.8 672.45 745
Slide 24: Business Update and Operating Model
Business Update and Operating Model 23
Slide 25: Business Operations
Business Operations No. of Branches Branches – Point of Sales & Services 105 Hubs – Fountain head for Decision Making 102 103 84 Geography Hub Branches 63 North 8 33 47 38 32 South 8 33 West 7 37 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Q1FY21 In Q1 FY20-21, 2 branches merged with existing; Unique cities
Slide 26: Consistency in Underwriting with advent of Technology
Consistency in Underwriting with advent of Technology Scalable Hub and Spoke Model Spokes Regional Hub Central Operations Customer acquisition / Underwriting Post Disbursement Operations servicing Field Investigation CPC Fountain head Fraud Control DSA PHFL for decision Unit making Underwriter revie
Slide 27: Robust Risk Buying Processes
Robust Risk Buying Processes Underwriting to Collections Specialization Customer profiling Other mitigating measures 3C Approach • Selective approach to • 3C approach: Counsel, • Professionally customer profiling • Mark to Market policies qualified with vast with tailor made Collect and Cure mortgag
Slide 28: Business Update
Business Update (INR Crore) Disbursement 36,079 33,195 18,626 694 FY18 FY19 FY20 Q1FY21 Asset +16% 84,722 83,346 83,495 62,252 74,023 67,571 68,009 57,014 31-Mar-18 31-Mar-19 31-Mar-20 30-Jun-20 AUM Loan Assets 1 Crore = 10 mn 27
Slide 29: Gross Non-Performing Assets
Gross Non-Performing Assets Non-Performing Assets 2.75% 2.76% 1.75% 1.75% 1.67% 1.25% 0.85% 0.84% 0.67% 0.65% 30-Jun-19 30-Sep-19 31-Dec-19 31-Mar-20 30-Jun-20 GNPA NNPA Gross NPA on AUM is 2.32% As on 30-June-2020 INR Crore Gross NPA 1,878.9 ECL Provision 1,837.1 Regulatory provision including Stan
Slide 30: Sustainable Portfolio Mix
Sustainable Portfolio Mix 29
Slide 31: Asset Under Management
Asset Under Management As % to AUM Product-wise Break-up Consistent Segment Mix Individual Housing Loans 4% Retail Loan Against Property 20% 20% 21% 18% 18% 12.5% Retail Non- residental Premises Loans 18% Construction Finance 58% 3.7% 1.5% Corporate Term Loan Lease Rental Discounting Segment-wise Br
Slide 32: Loan Assets Walk and Securitized Pool Highlights
Loan Assets Walk and Securitized Pool Highlights Asset Bridge (INR Crore) Highlights of Securitized Pool 83,495 • Developed expertise in Securitization 15,486 68,009 • Securitization done through Direct Assignment Route • Securitized book (IHL and LAP) outstanding at 18.5% of AUM • Substantial deman
Slide 33: Retail Focused Lending Operations
Retail Focused Lending Operations Retail segment contribute 97% of the Q1FY21 disbursement Loans given as Individual Housing Loans, Loan Against Property and Non Residential Premises Loans Focus on mass housing and capital efficient product segment Focus on completed properties Established expertise
Slide 34: Average Ticket size (ATS) Range
Average Ticket size (ATS) Range Individual Housing Loan Retail Loan Against Property 1.88% 1.60% 1.36% 1.32% 2.96% 2.54% 1.93% 1.93% 5.04% 4.99% 4.19% 4.53% 3.33% 3.34% 6.74% 6.16% 12.89% 12.86% 13.92% 13.75% 13.50% 15.08% 16.58% 15.84% 18.62% 18.49% 19.37% 20.44% 45.97% 46.02% 47.44% 20.40% 20.46%
Slide 35: Individual Housing Loans breakup
Individual Housing Loans breakup (INR Crore) Individual Housing Loans 58% of AUM 48,915 48,445 48,274 1% 36,549 5% 80% 9% 5% Home Purchase Residential Plot Residential Plot cum Constn 31-Mar-18 31-Mar-19 31-Mar-20 30-Jun-20 Self Construction Home Improvement/Extn 34
Slide 36: Individual Housing Loan key Loan Profile
Individual Housing Loan key Loan Profile Average Ticket Size Weighted Average Loan to Value (at Origination) 31 31 69% 71% 71% 71% 29 29 31-Mar-18 31-Mar-19 31-Mar-20 30-Jun-20 31-Mar-18 31-Mar-19 31-Mar-20 30-Jun-20 Salaried vs Self-Employed Under construction vs Completed 26% 24% 19% 19% 68% 70% 7
Slide 37: Retail Loan Against Property key Loan Profile
Retail Loan Against Property key Loan Profile Average Ticket Size Weighted Average Loan to Value (at Origination) 52 51 47% 49% 49% 49% 47 47 31-Mar-18 31-Mar-19 31-Mar-20 30-Jun-20 31-Mar-18 31-Mar-19 31-Mar-20 30-Jun-20 Salaried vs Self-Employed 17% 18% 19% 19% • Average Ticket Size reduced over l
Slide 38: Corporate Book
Corporate Book Housing
Slide 39: Corporate Book Summary
Corporate Book Summary Unique Corporate AUM houses ATS No. of Unique No. of Loan Product Segment % of AUM (INR Crore) INR Crore Corporate houses Accounts (US$ mn) 147.9 Construction Finance 10,453 12.5% 162 (19.6) 104.1 Corporate Term Loan 3,126 3.7% 140 64 (13.8) 98.1 Lease Rental Discounting 1,229
Slide 40: Corporate Book – primarily exposed to Mass Housing
Corporate Book – primarily exposed to Mass Housing Classification of Units funded by ticket size 1% 1% 3% 17% 78% Upto INR 1 Crore 1-3 Crore 3-5 Crore 5-8 Crore > 8 Crore Data as on 31-Mar-20 Includes Construction Finance and Corporate Term Loan 39
Slide 41: Corporate Book Risk Buying and Review Mechanism
Corporate Book Risk Buying and Review Mechanism Risk Buying • External valuation and legal title checks to supplement inhouse expertise • Centralised team with specialisation across Acquisition, Technical, Legal, Credit, Operations • Stress test at the start of a relationship with clear guidelines •
Slide 42: Construction Finance Loan
Construction Finance Loan Constitutes 12.5% of Top 7 markets the Asset under Spread across 107 100% residential loans* contributes 88% of the Management reputed developers AUM Total as on 31-Mar-2020 Under construction further Break-up 60% 75%-90% 12.4% 14% 50% - 75% 14.0% 60% 26% 25% - 50% 13.2% <2
Slide 43: Corporate Term Loans and Lease Rental Discounting
Corporate Term Loans and Lease Rental Discounting Corporate Term Loans Lease Rental Discounting • Constitutes 1.5% of AUM • Constitutes 3.7% of AUM • Spread across 13 reputed • Spread across 46 reputed developers developers • Presence in 7 large cities • Top 7 markets contributes over 87% • 100% of
Slide 44: Corporate Book Remedial Actions on Key NPA accounts
Corporate Book Remedial Actions on Key NPA accounts Accounts Resolved Resolution Underway ✓ IREO Pvt. Ltd. - INR 101 crore; successfully sold ✓ Supertech Ltd. - INR 244 Cr; started legal one part of the mortgage land through auction and proceeding under SARFAESI, auction planned in received 25% earn
Slide 45: Operational and Financial Performance
Operational and Financial Performance 44
Slide 46: Well Diversified Resource Profile
Well Diversified Resource Profile (INR Crore) Access to a Diverse Base of Funding Relationships with multiple lending partners 6.54% 8.45% 7.42% 10.00% 28 Banks 28 Pension Funds 7.73% (undertakes the 2.47% 18.20% 24.42% 23.20% impact of bank 19.47% merger) 5.69% 6.74% 7.06% 482 Provident 3 Multilate
Slide 47: Margin Analysis
Margin Analysis Average Yield Average Cost of Borrowings Spread 10.24% 10.35% 10.71% 10.32% 7.70% 8.00% 8.25% 8.13% 2.54% 2.35% 2.46% 2.19% FY18 FY19 FY20 Q1FY21 FY18 FY19 FY20 Q1FY21 FY18 FY19 FY20 Q1FY21 NIM Gross Margin 3.19% 3.50% 3.34% 2.93% 2.98% 3.21% 2.66% 2.61% FY18 FY19 FY20 Q1FY21 FY18 FY
Slide 48: Operating Leverage and Return Profile
Operating Leverage and Return Profile Opex to ATA Ratio Cost to Income Ratio 0.65% 19.61% 18.87% 0.61% 0.55% 17.22% 16.89% 0.50% FY18 FY19 FY20 Q1FY21 FY18 FY19 FY20 Q1FY21 Return on Asset Return on Equity 1.56% 1.61% 17.44% 1.33% 14.20% 12.62% 0.80% 8.12% FY18 FY19 FY20 Q1FY21 FY18 FY19 FY20 Q1FY21
Slide 49: CRAR and Gearing
CRAR and Gearing Capital to Risk Asset Ratio* 17.98% 18.05% 16.67% 2.80% 2.72% 3.92% 13.98% 2.98% 15.18% 15.33% 12.75% 11.00% 31-Mar-18 31-Mar-19 31-Mar-20 30-Jun-20 Tier 2 Tier 1 Average Gearing (x) 9.30 8.80 8.21 7.60 31-Mar-18 31-Mar-19 31-Mar-20 30-Jun-20 Ratio is calculated on Monthly Average *
Slide 50: Detailed Financials and Valuations
Detailed Financials and Valuations 49
Slide 51: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (INR Crore) Q1 FY21 Q1 FY20 YoY Q4 FY20 QoQ FY20 FY19 YoY Interest Income 1,801.5 1,979.4 1,802.6 7,688.2 6,792.9 Add: Net gain on fair value changes 49.8 39.4 62.7 158.6 128.9 Add: Income on derecognized (assigned) loans 0.0 119.3 2.8 336.2 308.1 Les
Slide 52: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (INR Crore) 31-Mar-20 31-Mar-19 Particulars (INR Crore) 31-Mar-20 31-Mar-19 LIABILITIES ASSETS 1 Financial Liabilities 0.0 1 Financial Assets (a) Derivative financial instruments 210.8 (b) Payables (a) Cash and cash equivalents 8,514.3 4,034.0 (I) Trade Payable
Slide 53: Shareholding
Shareholding Housing
Slide 54: Shareholding
Shareholding Shareholding as on 30-Jun-20 6.54% 3.49% 0.90% 2.35% Top Shareholders 32.65% 21.85% General Atlantic Singapore Fund, SSG Capital, Franklin Templeton MF, Malabar Investments, Vanguard, HDFC Standard Life Insurance Company, Reliance Capital MF, United India Insurance, ICICI Lombard 32.22%
Slide 55: Saksham – Contributing to the Society
Saksham – Contributing to the Society 54
Slide 56: Glimpses of Social Interventions
Glimpses of Social Interventions Enhancing Human Potential • Partnered with CREDAI to conduct Onsite & Offsite skill enhancement training for 13,000+ construction workers • Launched construction worker skills enhancement training in partnership with NAREDCO Reaching Out, Reaching Far • Collaborated
Slide 57: Winning Awards & Accolades
Winning Awards & Accolades Recognized as one of Won Gold Award for Won the Gold award at Won the Gold Award at Felicitated as winner for Awarded for Best the Iconic Brands of Annual Report Outlook Money Awards the League of American Excellence in Customer India for 2020 by The FY2018-19 at the 10th
Slide 58: Management Team...
Management Team... Housing
Slide 59: ...with Extensive Industry Experience
…with Extensive Industry Experience Age : 62 Years Age : 54 Years Age : 58 Years No. of Years with No. of Years with No. of Years with PNBHF : 1** Year PNBHF : 7 Years PNBHF : 9 Years Prior Engagements : Prior Engagements : Prior Engagements : HDFC State Bank of India Religare Finvest Ltd Standard L
Slide 60: ...under the Aegis of a Highly Experienced Board
…under the Aegis of a Highly Experienced Board Sh CH. S. S. Mallikarjuna Rao Sunil Kaul Shital Kumar Jain Gourav Vallabh R Chandrasekaran Non Executive Chairman Non Executive Director Independent Director Independent Director Independent Director Age: 58 Years Age: 60 Years Age: 80 Years Age: 42 Yea
Slide 61: Corporate Governance
Corporate Governance Board of Directors It has 10 members,1 non-executive chairman, 1 non-executive director, 7 independent directors and Managing Director Audit Committee (ACB) It has 3 members, all are independent directors Risk Management Committee (RMC) It has 5 members, 2 are independent direct
Slide 62: Key Takeaways
Key Takeaways Improving Cost to Strong Wide Spread Retail Focus on Retail Diversified Income Ratio Balance Sheet Distribution Network Borrowing Mix with and Unique balanced ALM Operating Model Wide spread retail Focus on Retail Diverse funding mix Operating leverage Conservative distribution network
Slide 63: Annexure
Annexure Housing
Slide 64: Return to Shareholders
Return to Shareholders Earnings Per Share (INR) Book Value Per Share (INR) 71.2 450.5 475.5 394.2 50.5 336.7 36.7 38.5 FY17 FY18* FY19* FY20* 31-Mar-17 31-Mar-18* 31-Mar-19* 31-Mar-20* Dividend Per Share (INR) 9.0 9.0 Considering the current economic 6.0 scenario and in order to conserve capital, th
Slide 65: Employee Efficiency
Employee Efficiency (INR Crore) Disbursement / Employee Asset under Management / Employee 28.99 54.37 58.43 52.78 48.76 24.25 24.88 11.80 FY17 FY18 FY19 FY20 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 Total Revenue / Employee Profitability / Employee 5.30 5.38 0.82 4.59 4.79 0.73 0.62 0.40 FY17 FY18* F
Slide 66: Glossary
Glossary ATA Average Total Assets GNPA Gross Non-Performing Asset ATS Average Ticket Size HFCs Housing Finance Companies AUM Asset Under Management LAP Loan against Property BVPS Book Value per Share LIG Low Income Group C/I Cost to Income LRD Lease Rental Discounting CRAR Capital to Risk Asset Rati
Slide 67: Formulas
Formulas Ratios Formulas Used Average Borrowings (%) Interest Expense / Average Borrowings Average Gearing Ratio (x) Average Borrowings / Average Net worth Average Yield (%) (Interest Income + Assignment Income) on Loans / Average Loan Assets Operating Expenditure(Employee Cost + Other Expenses + De
Slide 68: Thank You
Thank You Company: PNB Housing Finance Limited CIN: L65922DL1988PLC033856 Ms. Deepika Gupta Padhi (Head-Investor Relations) Phone: +91 11 23445214 Investor.relations@pnbhousing.com www.pnbhousing.com 67
PNB Housing Finance — Q1 FY2021 Earnings Presentation on 6ix