Utkarsh Small Finance Bank Limited · NSE:UTKARSHBNK
Utkarsh Small Finance Bank — Q1 FY24 Earnings Presentation
47 slides from Utkarsh Small Finance Bank's earnings presentation, Aug 8, 2023
Slide 1: Cover letter to stock exchanges: Investor Presentation
SE/2023-24/29 August 08, 2023 The BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers 5th Floor, Exchange Plaza, C-1, Block G, Dalal Street, Fort Bandra Kurla Complex, Bandra East, Mumbai – 400001 Mumbai – 400 051 Scrip Code: 543942, 958095, NSE symbol: UTKARSHBNK 958226,
Slide 2: Investor Presentation Q1 FY24
Slide 3: Key Highlights Q1, FY24
Key Highlights Q1, FY24 Bank’s IPO garnered healthy investor interest from all sets of investors including QIBs, NII, Retail and Employees - IPO was 01 subscribed >100X 02 Credit growth 31% YoY; deposits growth 36% YoY in Q1, FY24 Strong Asset quality profile Net NPAs declined to 0.3% as on Jun-23;
Slide 4: Key Highlights – As of June 30, 2023
Key Highlights – As of June 30, 2023 ₹14,394 cr. ₹13,967 cr. ₹107 cr. ₹2,110 cr. 3.1% 851 Profit After Tax Gross Loan Deposits Capital + Reserves Gross NPAs Banking Outlets Portfolio 31.4% 35.6% ₹221 cr. 0.3% Gross Loan 19.8%* 26 Deposits Growth Pre-provisioning CRAR Net NPA States & UTs Portfolio G
Slide 5: Journey and Franchise; Portfolio Build Up; Deposits Build Up; Financial Performance
Journey and Franchise Portfolio Build Up Deposits Build Up Financial Performance Technology, ESG & CSR 4
Slide 6: Journey and Franchise
Journey and Franchise Committed journey of ~14 years from Microfinance to Small Finance Bank to Listed Company Significant presence in rural & semi urban locations and under penetrated States of the Country Differentiated branch network to ensure relevant product offerings for customers & ensuring c
Slide 7: Utkarsh Journey
Utkarsh Journey Highest ever annual profit of > ₹400 crore in FY23 Launched digital on- FY24 boarding of accounts Bank’s Capital + Reserves crossed ₹2,000 crore Raised equity capital of Rs.240 crore in Mar-21 FY23 In Jul-23 Bank launched IPO to raise equity capital of ₹500 crore; IPO FY21 oversubscr
Slide 8: Business Overview
Business Overview Focus on Financial inclusion, offer a range of financial products and services that address the specific requirements of customer segments Microbanking 63% Other Retail Loans 26% Joint Liability MSME Loans Housing Individual Loans Group Loans (Retail Assets) Loans Asset products 1
Slide 9: Diversified distribution network
Diversified distribution network Extensive physical network of Banking Outlets (Jun’23) Scope of Retail Assets within existing Branches (Jun’23) >50 outlets Total 1 <50 Outlets MSME Wheels STATES Banking MB Outlets GB Outlets HL Locations Locations Locations No outlets Outlets 2 Chandigarh: 2 7 Biha
Slide 10: Differentiated Branch Network
Differentiated Branch Network 690 738 794 830 851* ▪ Differentiated branch network to ensure relevant product offerings to the customers as 564 579 594 well as ensuring cost efficiency of operations 497 532 ▪ All branches CBS enabled; customers can 251 257 transact from any of the 851 branches 193 2
Slide 11: Strategies
Strategies Continue diversifying asset portfolio ❑ Leverage wide base of existing customers in the unserved and underserved segments ▪ Extend products offering from JLG loans to individual loans, affordable housing loans and other new products ❑ Focus on offering working capital and term loans to MS
Slide 12: Portfolio Build-up
Portfolio Build-up Loan portfolio grew 31% YoY Rural & semi urban franchise, deep rooted understanding of our core geographies, proven track record - key strength of our microfinance lending Strategically increasing share of secured lending with build-up of MSME, Housing & CV / CE loan book 11
Slide 13: Loan Portfolio Build-up
Loan Portfolio Build-up All Amounts in ₹ Crores CAGR% Loan Book (Mar-20) Product (FY20-Q1FY24) 14,394 Micro-banking Loans 14% 13,957 Housing Retail Loans Other Retail Loans 86% (MSME), 4% Loans, 1% Others*, 2% Wholesale Lending (Excl BBG) 51% 1,617 Wholesale 10,631 1,547 Lending, 5% 3,718 8,416 Micr
Slide 14: Micro Finance Lending
Micro Finance Lending 13
Slide 15: Micro Finance Lending
Micro Finance Lending All Amounts in ₹ Crores Demographic Break up of MB Outlets Portfolio Outstanding URBAN METROPOLITAN 86% Branches 11% 3% in Rural & 8,701 9,216 9,059 JLG: 96% Semi-urban 8,535 8,173 MBIL: 4% areas SEMI URBAN RURAL 48% 38% Geographical Split of MB Portfolio Presence across 12 Sta
Slide 16: Micro Finance Lending (Contd.)
Micro Finance Lending (Contd.) All Amounts in ₹ Crores Microfinance Disbursements MBIL Product Portfolio Outstanding 2,619 2,447 2,304 387 332 1,886 1,897 252 194 150 Q1,FY23 Q2,FY23 Q3,FY23 Q4,FY23 Q1,FY24 Jun'22 Sep'22 Dec'22 Mar'23 Jun'23 Demographic Break up of Portfolio o Micro Banking Individu
Slide 17: Micro Finance – Asset Quality
Micro Finance – Asset Quality Collection Efficiency (excl. Pre-Payments) 6.1% 5.9% 97% 97% 4.1% 4.0% 0.8% 0.7% Q4'FY23 Q1'FY24 0.6% 0.5% SMA 0.8% 0.6% 0.8% 0.8% 0.6% 0.7% 0.6% 0.5% Mar'23 Jun'23 SMA 0 SMA 1 SMA 2 NPA SMA 0 % SMA 1 % SMA 2 % Carrying floating provision of ₹93 crore for Micro Finance
Slide 18: Other Retail Lending
Other Retail Lending MSME (Retail Assets) Housing Loans CE & CV Loans 17
Slide 19: MSME (Retail Assets) Lending
MSME (Retail Assets) Lending All Amounts in ₹ Crores Portfolio Outstanding 1,724 1,534 1,225 1,022 907 Secured Business Unsecured Micro LAP / Loans (LAP) Business Loan Overdraft Jun'22 Sep'22 Dec'22 Mar'23 Jun'23 Disbursements (104% YoY Growth) 450 14.0% 12.0% o Significant presence in our core geog
Slide 20: Housing Loans
Housing Loans All Amounts in ₹ Crores Portfolio Outstanding 557 Retail Housing Loans Affordable Housing 519 461 420 389 o Significant presence in our core geography Jun'22 Sep'22 Dec'22 Mar'23 Jun'23 o Currently offering HL product from 45 locations, significant headroom to expand within existing br
Slide 21: CE & CV Loans
CE & CV Loans All Amounts in ₹ Crores Portfolio Outstanding 637 CV (New) CE (New) CV & CE (Used) 560 429 • 90% of total • 6% of total portfolio • 4% of total portfolio portfolio 337 260 Jun'22 Sep'22 Dec'22 Mar'23 Jun'23 o Lending primarily to small fleet operator segment o Currently offering CE & C
Slide 22: Wholesale Lending
Wholesale Lending All Amounts in ₹ Crores Portfolio Break up (Mar-20) Portfolio Break up (Jun-23) Portfolio - ₹1,617 crore Jun-23 Rating Wise WSL FI Portfolio Break up Business Banking Business Banking Started Business Group Banking in FY21 Group 0% 27% Disbursement Yield AA Category – 11.2% 14% BBB
Slide 23: Deposits Build-up
Deposits Build-up Deposits grew by 36% YoY Expanded General Banking Franchise significantly over last 2 year Targeting top-100 deposits districts of the country Focus on building retail franchise, reduced top-20 deposits concentration 22
Slide 24: Deposits Trend & Composition
Deposits Trend & Composition All Amounts in ₹ Crores Deposits Trend Customer Base Deposits (36% YoY Growth) 2.19 million 1.18 1.25 Total Deposit 0.86 0.94 Customers 120 % 102% 97% 97% 16,0 00 95% 95% 14,0 00 100 % 12,0 00 80% 12,847 13,710 13,967 11,737 10,0 00 60% 10,297 8,00 0 1.45 lakh CASA accou
Slide 25: Deposits Trend & Composition (Contd.)
Deposits Trend & Composition (Contd.) All Amounts in ₹ Crores Deposits Composition Decline in Concentration to Top 20 Depositors % 22% 22% 21% 21% 19% CASA 60% 59% 60% 62% 62% CASA + RTD 2,895 2,884 2,973 Institutional Term Deposits 29% 40% 41% 40% 38% 38% 21% 21% Retail Term Deposits SA BSBDA accou
Slide 26: Asset Quality Movement
Asset Quality Movement All Amounts in ₹ Crores Write off 53 112 151 67 82 Jun-23 Jun-22 Mar-23 Gross NPA % 3.1% 5.7% 3.2% PCR% 72.2% 78.2% 80.5% 88.3% 89.8% Net NPA % 0.3% 1.7% 0.4% 628 544 SMA 1 & 2 448 432 431 1.5% 1.4% 206 197 174 119 87 51 44 Jun'22 Sep'22 Dec'22 Mar'23 Jun'23 Gross NPAs Net NPA
Slide 27: Financial Performance
Financial Performance Stable & consistent financial performance Focus on cost efficiency resulting healthy cost income ratio Profit after tax increased 20% YoY to ₹107 crore Building floating provision to ensure resiliency 26
Slide 28: Enduring Profitability Metrics
Enduring Profitability Metrics Operating Profit & PAT – Quarterly Trend (₹ in crores) 213 221 207 210 208 134 107 89 88 94 Q1' FY23 Q2' FY23 Q3' FY23 Q4' FY23 Q1' FY24 Operating Profit (PPoP) PAT 28.3% 19.4% 19.3% 19.1% 19.1% 18.8% 22.1% 21.1% 20.4% 20.5% 9.7% 10.0% 9.7% 9.4% 9.2% 7.0% 6.9% 7.0% 7.4
Slide 29: Enduring Profitability Metrics (Contd.)
Enduring Profitability Metrics (Contd.) 54.1% 54.9% 56.5% 57.0% 3.4% 50.8% 3.1% 2.8% 2.1% 1.1% 14.8% 12.8% 12.4% 11.1% 10.0% Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23 Q1'FY24 Credit Cost Cost to Income Ratio Q1'FY23 Q2'FY23 Q3'FY23 Q4'FY23 Q1'FY24 Non-Interest income/Interest income 5.7% 5.2% 8.2% 8.5% 8.3% 8
Slide 30: Return on Equity during Covid Cycle
Return on Equity during Covid Cycle Covid Cycle RoE Additionally, built floating provision buffer during this period; ₹106 crore as on Jun- Average: 15.7% 23 22.8% 21.1% 20.3% RoE back to pre- covid levels of >20% 10.0% 4.1% FY20 FY21 FY22 FY23 Q1 FY24 29
Slide 31: Break-up of other income
Break-up of other income ₹ 84 crore ₹ 69 crore ₹ 92 crore 11% 14% 30% 19% 10% 18% 47% 50% 16% 37% 28% 20% Q1'FY23 Q4'FY23 Q1'FY24 Loan Processing Fee PSLC Income Recovery from written off accounts General Banking & Other Income 8/8/2023 30
Slide 32: CRAR & Tier 1
CRAR & Tier 1 All Amounts in ₹ Crores Particulars June-22 March-23 June-23 Risk Weighted Assets 8,095 10,106 10,266 Adjusted for capital raised through IPO Total Capital 1,763 2,086 2,036 & Q1, FY24 profit (based on limited Tier-I Capital 1,525 1,845 1,842 review results) – CRAR at >25%; adequate ca
Slide 33: Profit & Loss: For the quarter ended June 30th, 2023
Profit & Loss: For the quarter ended June 30th, 2023 All Amounts in ₹ Crores Particulars Q1’FY24 Q1’FY23 Y-o-Y Q4’FY23 Q-o-Q FY23 INCOME Limited Review Audited Total Interest Earned 720 571 26% 691 4% 2,505 Less : Interest Expense 298 222 35% 282 6% 976 Net Interest Income 422 349 21% 410 3% 1,529 A
Slide 34: Balance Sheet: As on June 30th, 2023
Balance Sheet: As on June 30th, 2023 All Amounts in ₹ Crores Particulars June 30th, 2023 June 30th, 2022 Y-o-Y March 31st, 2023 Q-o-Q CAPITAL & LIABILITIES Limited Review Audited Capital and Reserves 2,110 1,668 26% 2,000 5% Deposits 13,967 10,297 36% 13,710 2% Borrowings 2,245 2,388 (6)% 2,349 (4)%
Slide 35: IPO Update
IPO Update o Bank launched its IPO in July 2023 – Issue opened on July 12, 2023 and closed on July 14, 2023. o Bank’s IPO garnered healthy investor interest from all sets of investors including QIBs, NII, Retail and Employees - IPO was subscribed >100X o Bank raised equity capital of ₹500 crore thro
Slide 36: Shareholding Pattern
Shareholding Pattern Bank Shareholders as on June 30th, 2023 Bank Shareholders as on August 4th, 2023 (Post IPO) Domestic Retail Individuals & Institutional HUF, Investors, Individual Insurance 5.6% Corporates, Banks & 1.4% Shareholders, Companies, QIB / AIF, 2.6% Others, 0.4% 3.1% 4.3% Foreign Inve
Slide 37: Diversified & Experienced Board
Diversified & Experienced Board Board Members of the Bank Parveen Kumar Gupta Ajay Kumar Kapur Part Time Non Executive Chairman & Independent Director Independent Director • Currently engaged as an advisor to the United Nations Industrial • Certified associate of the Indian Institute of Bankers Deve
Slide 38: Leadership Complementing Bank’s Strengths
Leadership Complementing Bank’s Strengths Senior Management Team Govind Singh - Managing Director & Chief Executive Officer • Over 25 years of experience in the banking and financial services sector • and in particular the microfinance industry • Previously associated with Utkarsh CoreInvest (Bank’s
Slide 39: Tech, ESG & CSR
Tech, ESG & CSR Technology Setup to support Physical Infrastructure and Digital Requirement Integrating ESG Sensitivities into our operations & decision-making Contributing to the well-being of the society 38
Slide 40: Technology Setup to support Physical Infrastructure and Digital Requirement
Technology Setup to support Physical Infrastructure and Digital Requirement P H Supporting extensive branch network of 851 Y ISO 27001 Certification for IT operation branches S I Micro ATM for Cash Withdrawal in Remote Tab enabled feet-on-street for acquisition and C locations collections A L Extens
Slide 41: Transformation Fueling Business Growth
Transformation Fueling Business Growth T R Redesigning business process of retail asset and Invest on cloud platforms to improve agility liability for higher productivity and scalability A N S F O Automation and digitation of operational API led Integration platform for internal R process and custom
Slide 42: Environment, Social & Governance
Environment, Social & Governance Environment Social Governance Practice is aligned with Committed to give due • Exclusion List • Service to Bottom • Diversified Board the national E&S laws consideration to • Training and of pyramid • Board and regulations and environmental & social awareness • Inclu
Slide 43: Awards & Accolades
Awards & Accolades RANKED 46 UNDER “THE NEXT 500 COMPANIES 2022” BY FORTUNE INDIA RECOGNITION AS ONE OF THE Recognised as one of the Most ‘PROMISING BRANDS 2022’ BY Trusted BFSI Brands by ECONOMIC TIMES Teammarksmen Daily 8/8/2023 42
Slide 44: Utkarsh Welfare Foundation: CSR Initiatives
Utkarsh Welfare Foundation: CSR Initiatives FINANCIAL AWARENESS SKILL & ENTERPRISE VILLAGE DEVELOPMENT OTHER PHILANTHROPIC HEALTH INITIATIVES ACTIVITIES DEVELOPMENT PROGRAM PROGRAM Initiatives Lives Impacted Lives Impacted Lives Impacted Lives Impacted Blood Donation Camps, 9,00,000+ 10,00,000+ 40,0
Slide 45: Utkarsh Welfare Foundation: CSR Initiatives (Contd.)
Utkarsh Welfare Foundation: CSR Initiatives (Contd.) E-Clinic Digital Smart Class Health Camp E-Clinic Support to Old Age Home Health Camp 8/8/2023 44
Slide 46: Disclaimer
Disclaimer Utkarsh Small Finance Bank Limited (also referred to as ‘Bank’). By attending a meeting where this presentation is made, or by reading this presentation material, you agree to be bound by following limitations: The information in this presentation has been prepared for use in presentation
Slide 47: THANK YOU.
THANK YOU. ©) Utkarsh Small Finance Bank
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