Pnb Housing Finance Limited · NSE:PNBHOUSING
Pnb Housing Finance — FY2020 Earnings Presentation
65 slides from Pnb Housing Finance's earnings presentation, Jun 14, 2020
Slide 1: Investor Presentation cover letter to exchanges
@ pnb Housing June 14, 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 Symbol: PNSHOUSING Dear Sirs,
Slide 2: Investor Presentation June 2020
Investor Presentation June 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 18,626 Crore* disbursement) INR 83,346 Crore (US$ 2,471 mn) 10 bps (US$ 11,055 mn) Average Cost of GNPA Borrowing 2.29% on AUM 8.25%* 2.75% on Loan Assets Deposits 4 delivery Retail Loan
Slide 6: HFC Sector well placed...
HFC Sector well placed... Housing
Slide 7: 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 8: 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 9: COVID-19 Update
COVID-19 Update Housing
Slide 10: Covid-19 Pandemic – the 3S Approach
Covid-19 Pandemic – the 3S Approach Survive: • Health and Safety of our employees is of paramount importance • 100% offices closed during lockdown 1 Shifting Gears: • 80% employees worked from home • Maintain moral and emotional • Focus on mass housing and connect with the employees capital efficien
Slide 11: Covid-19 Business Update
Covid-19 Business Update Human Capital Information Technology Business Operations ▪ Initiated functional and behavioral ▪ Heavily leveraged on the technology ▪ During lockdown 1.0, all our offices online trainings and workshops for its investments; Enterprise System including branches, outreaches, h
Slide 12: Covid-19 Business Update
Covid-19 Business Update Moratorium Liquidity Management Income Statement ▪ Maintained sufficient Cash and liquid ▪ RBI announced 3 months of moratorium ▪ Pre provision operating profit for FY investments of INR 5,850 crore as on on 27th March 2020 that was extended 2020 is INR 2,062 crore 5th June
Slide 13: Financial Performance of the Company
Financial Performance of the Company 12
Slide 14: Highlights – Q4FY20 vs Q4FY19
Highlights – Q4FY20 vs Q4FY19 Disbursement (INR Crore) AUM (INR Crore) NII (INR Crore) -67% -2% -20% 8,562 84,722 83,346 610 488 2,826 Q4FY19 Q4FY20* 31-Mar-19 31-Mar-20 Q4FY19 Q4FY20 *Retail and Corporate disbursement degrew by 35% (YoY) and 84% (YoY) respectively Operating Profit (INR Crore) PAT (
Slide 15: Highlights – Q4FY20 vs Q4FY19
Highlights – Q4FY20 vs Q4FY19 Average Yield Average Cost of Borrowing Spread -39 bps -3 bps -36 bps 10.65% 10.26% 8.06% 8.03% 2.59% 2.23% Q4FY19 Q4FY20 Q4FY19 Q4FY20 Q4FY19 Q4FY20 NIM Gross Margin -57 bps -63 bps 3.18% 3.51% 2.61% 2.88% Q4FY19 Q4FY20 Q4FY19 Q4FY20 Ratios are calculated on Monthly Av
Slide 16: Long Term Resource Mobilisation
Long Term Resource Mobilisation Deposits Bank Term Loan • 2nd highest deposit mobilizer • Borrowed INR14,396 Crore during among HFCs; mobilized INR 9,120 FY20; existing relationship with 31 Bank Term Deposits crore during FY20 banks Loan Resource NCDs Mobilisation • Raised Non Convertible Debentures
Slide 17: Deposits
Deposits (INR Crore) Deposits as 20% % of total 26% 19% 17% resources 237,703 153,588 97,217 96,754 16,470 14,315 11,586 9,987 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 Deposit Outstanding No. of Deposit Accounts 16
Slide 18: Asset Liability Maturity profile
Asset Liability Maturity profile Graph as on 31-Mar-20 24,032 (INR Crore) 20,437 19,314 18,196 16,044 14,326 8,128 7,351 7,316 7,127 4,387 4,294 3,455 3,341 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 19: 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) 31-Mar-19 31-Dec-19 31-Mar-20 Gross Stage 3 (GNPA) 354.86 1,212.76 1,856.23 % portfolio in Stage 3 (GNPA%) 0.48% 1.75% 2.75% Net NPA is 1.75% ECL Provision Stage 3* 7
Slide 20: Expected Credit Loss (ECL) Provisions - Retail
Expected Credit Loss (ECL) Provisions - Retail Particulars (INR Crore) 31-Mar-19 31-Mar-20 Gross Stage 3 (GNPA) 325.00 660.88 % portfolio in Stage 3 (GNPA%) 0.58% 1.25% ECL Provision Stage 3* 64.48 167.94 Inclusive of under construction assets of INR Net Stage 3 260.52 492.95 720 crore of voluntary
Slide 21: Expected Credit Loss (ECL) Provisions - Corporate
Expected Credit Loss (ECL) Provisions - Corporate Particulars (INR Crore) 31-Mar-19 31-Mar-20 Gross Stage 3 (GNPA) 29.87 1,195.35 % portfolio in Stage 3 (GNPA%) 0.17% 8.18% Includes 3 new and 1 ECL Provision Stage 3* 9.86 504.51 existing account identified for SICR having total Net Stage 3 20.01 690
Slide 22: Business Update and Operating Model
Business Update and Operating Model 21
Slide 23: Business Operations
Business Operations No. of Branches Branches – Point of Sales & Services Hubs – Fountain head for Decision Making No. of Branches Unique Cities* 3 105 18 2 Geography Hub Branches 15 21 North 8 33 16 8 South 8 35 9 5 64 West 7 37 6 7 32 0 New Branches (opened in FY18, FY19 & FY20) contribute ~23% of
Slide 24: 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 25: 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 26: Business Update
Business Update (INR Crore) Disbursement 36,079 33,195 20,639 18,626 FY17 FY18 FY19 FY20 Asset +26% 84,722 83,346 62,252 41,492 74,023 67,571 57,014 38,531 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 AUM Loan Assets 1 Crore = 10 mn 25
Slide 27: Gross Non-Performing Assets
Gross Non-Performing Assets Non-Performing Assets 2.75% 1.75% 1.75% 1.25% 0.85% 0.84% 0.65% 0.65% 0.48% 0.38% 31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 31-Mar-20 GNPA NNPA Gross NPA on AUM is 2.29% As on 31-Mar-2020 INR Crore Gross NPA 1,856.23 ECL Provision 1,765.60 Regulatory provision including Sta
Slide 28: Sustainable Portfolio Mix
Sustainable Portfolio Mix 27
Slide 29: 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% 18% 20% 21% 18% 12% Retail Non- residental Premises Loans 18% Construction Finance 58% 4% 2% Corporate Term Loan Lease Rental Discounting Segment-wise Breakup
Slide 30: Loan Assets Walk and Securitized Pool Highlights
Loan Assets Walk and Securitized Pool Highlights Asset Bridge Highlights of Sold Portfolio (INR Crore) • Sold Corporate Finance portfolio worth INR 2,307 Crore during FY20 83,346 • Help in improving CRAR 15,775 67,571 • Reported AUM is net of Sell Down portfolio Highlights of Securitized Pool • Deve
Slide 31: Retail Focused Lending Operations
Retail Focused Lending Operations Retail segment contribute 92% of the FY20 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 i
Slide 32: Average Ticket size (ATS) Range
Average Ticket size (ATS) Range Individual Housing Loan Retail Loan Against Property 0.17% 0.14% 0.13% 0.05% 2.17% 0.60% 0.58% 0.39% 0.30% 2.77% 2.96% 2.54% 1.93% 1.88% 1.60% 1.36% 5.04% 4.45% 4.53% 3.33% 6.74% 6.16% 4.19% 8.15% 7.66% 9.20% 13.92% 9.68% 14.40% 13.50% 15.08% 10.17% 5.23% 6.64% 6.90%
Slide 33: Individual Housing Loans breakup
Individual Housing Loans breakup (INR Crore) Individual Housing Loans 58% of AUM 48,915 48,445 1% 36,549 5% 80% 9% 24,868 5% Home Purchase Residential Plot Residential Plot cum Constn 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 Self Construction Home Improvement/Extn 32
Slide 34: Individual Housing Loan key Loan Profile
Individual Housing Loan key Loan Profile Average Ticket Size Weighted Average Loan to Value (at Origination) 31 31 31 69% 71% 71% 68% 29 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 Salaried vs Self-Employed Under construction vs Completed 26% 24% 19% 31% 64% 68% 7
Slide 35: Retail Loan Against Property key Loan Profile
Retail Loan Against Property key Loan Profile Average Ticket Size Weighted Average Loan to Value (at Origination) 55 47% 49% 49% 52 51 46% 47 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 Salaried vs Self-Employed 14% 17% 18% 19% • Average Ticket Size reduced over l
Slide 36: Corporate Book
Corporate Book Housing
Slide 37: 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) 148.5 Construction Finance 10,356 12% 166 (19.7) 104.1 Corporate Term Loan 3,052 4% 141 64 (13.8) 98.1 Lease Rental Discounting 1,206 2%
Slide 38: Corporate Book – primarily exposed to Mass Housing
Corporate Book – primarily exposed to Mass Housing Bifurcation 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 37
Slide 39: Corporate Book Risk Buying and Review Mechanism
Corporate Book Risk Buying and Review Mechanism • External valuation and legal title checks to supplement inhouse expertise Risk Buying • Centralised team with specialisation across Acquisition, Technical, Legal, Credit, Operations • Effective risk management with segregation of responsibilities • S
Slide 40: Construction Finance Loan
Construction Finance Loan 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% <25% 20.2% Completed Near Completion Under Construction % of Completion (100%) (90% - 100%) (upto 90%) Constitutes 12% of the Top 7 markets Asset under
Slide 41: Corporate Term Loans and Lease Rental Discounting
Corporate Term Loans and Lease Rental Discounting Corporate Term Loans Lease Rental Discounting • Constitutes 2% of AUM • Constitutes 4% of AUM • Spread across 13 reputed • Spread across 46 reputed developers developers • Presence in 7 large cities • Top 7 markets contributes over 86% • 100% of LRD
Slide 42: Operational and Financial Performance
Operational and Financial Performance 41
Slide 43: Well Diversified Resource Profile
Well Diversified Resource Profile (INR Crore) Access to a Diverse Base of Funding Relationships with multiple lending partners 7.12% 6.54% 8.45% 7.42% 31 Banks 31 Pension Funds 6.39% 7.73% 3.92% 2.47% 18.20% 24.42% 19.47% 25.86% 5.69% 6.74% 500 Provident 2 Multilateral 17.23% Funds Agencies 17.48% 1
Slide 44: Margin Analysis
Margin Analysis Average Yield Average Cost of Borrowings Spread 10.76% 10.24% 10.35% 10.71% 8.55% 8.25% 2.54% 2.46% 7.70% 8.00% 2.35% 2.21% FY17 FY18* FY19* FY20* FY17 FY18* FY19* FY20* FY17 FY18* FY19* FY20* NIM Gross Margin 3.19% 3.50% 3.34% 2.97% 2.93% 2.98% 3.27% 3.21% FY17 FY18* FY19* FY20* FY1
Slide 45: Operating Leverage and Return Profile
Operating Leverage and Return Profile Opex to ATA Ratio Cost to Income Ratio 0.73% 22.43% 0.65% 19.61% 0.61% 0.55% 17.22% 16.89% FY17 FY18* FY19* FY20* FY17 FY18* FY19* FY20* Return on Asset Return on Equity 1.56% 1.61% 17.44% 1.46% 14.92% 14.20% 0.80% 8.12% FY17 FY18* FY19* FY20* FY17 FY18* FY19* F
Slide 46: CRAR and Gearing
CRAR and Gearing Capital to Risk Asset Ratio 21.62% 5.14% 17.98% 16.67% 2.80% 3.92% 13.98% 2.98% 16.48% 15.18% 12.75% 11.00% 31-Mar-17 31-Mar-18 31-Mar-19 31-Mar-20 Tier 2 Tier 1 Average Gearing (x) 9.30 8.72 8.80 7.60 31-Mar-17 31-Mar-18* 31-Mar-19* 31-Mar-20* Ratio is calculated on Monthly Average
Slide 47: 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 38.5 36.7 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 48: 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 49: Detailed Financials and Valuations
Detailed Financials and Valuations 48
Slide 50: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (INR Crore) Q4 FY20 Q4 FY19 YoY Q3 FY20 QoQ FY20 FY19 YoY Interest Income 1,802.6 1,892.9 1,890.4 7,688.2 6,792.9 Add: Net gain on fair value changes 62.7 50.4 32.5 158.6 128.9 Add: Income on derecognized (assigned) loans 2.8 93.9 104.2 336.2 308.1 Le
Slide 51: 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 52: Shareholding
Shareholding Housing
Slide 53: Shareholding
Shareholding Shareholding as on 31-Mar-20 5.41% 3.25% 0.88% 3.78% Top Shareholders 32.65% 21.80% General Atlantic Singapore Fund, Franklin Templeton MF, Varde Holdings, Malabar Investments, Fidelity International, Auburn Ltd, Vanguard, Franklin Templeton Investment Funds, HDFC Standard Life 32.23% I
Slide 54: Saksham – Contributing to the Society
Saksham – Contributing to the Society 53
Slide 55: Glimpses of Social Interventions
Glimpses of Social Interventions Enhancing Human Potential • Partnered with Confederation of Real Estate Developers Association of India (CREDAI) to conduct Onsite & Offsite skill enhancement training for 13,000+ construction workers • Launched construction worker skills enhancement training in part
Slide 56: Winning Awards & Accolades
Winning Awards & Accolades Won Gold Award for Won the Gold award at Won the Gold Award at Felicitated as winner for Awarded for Best Mr. Nitant Desai Annual Report Outlook Money Awards the League of American Excellence in Customer awarded amongst FY2018-19 at the 10th 2019 under the ‘Home Communicat
Slide 57: Management Team...
Management Team... Housing
Slide 58: …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 59: …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 60: 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 61: 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 62: Annexure
Annexure 61 @ pnb Housing Finance Limited
Slide 63: 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 64: 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 65: 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 64