Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Q4 FY2020 Earnings Presentation
50 slides from Au Small Finance Bank's earnings presentation, May 2, 2020
Slide 1: Exchange filing cover letter
Ref. No. AUSFB/SEC/2020-21/49 Date: 2nd May, 2020 To, National Stock Exchange of India Limited, BSE Limited, Exchange Plaza, Bandra Kurla Complex, Phiroz Jeejeebhoy Towers, Bandra (East), Mumbai 400051, Dalal Street, Mumbai 400001, Maharashtra. Maharashtra. NSE Symbol: AUBANK Scrip Code: 540611 Dear
Slide 2: Investor Presentation FY20 / Q4FY20
Investor Presentation FY20 / Q4FY20 A SCHEDULED BANK I FORTUNE INDIA 500 COMPANY Retail Focused I Differentiated I Well Capitalized I Fast Learning I Customer Centric Completed 25 years as an institution and 3 years as a Bank May 2020
Slide 3: AU Bank – Leveraging Best of Both The Worlds
AU Bank – Leveraging Best of Both The Worlds BANK Our PULL And Strengths `NBFC Possibilities DNA “ear to the ground”, agility, push and cost-conscious Bank Brand –The biggest multiplier, a natural Pull approach 25+ years of small ticket, secured lending vintage in Comprehensive suite of products and
Slide 4: Table of Contents
Table of Contents 1. FY20 / Q4FY20 Performance Summary and Key Updates 2. Retail Assets and Small & Mid Corporate Assets 3. Branch Banking 4. Treasury 5. Distribution Network, Digital Channels and COVID response 6. About AU Small Finance Bank 3
Slide 5: FY20 / Q4FY20 Performance Summary and Key Updates
1. FY20 / Q4FY20 Performance Summary and Key Updates 4
Slide 6: FY2019-20: Key Governance, Expansion and New Product Updates
FY2019-20: Key Governance, Expansion and New Product Updates Strengthened Bank’s Governance Framework and inducted three independent board of directors during fiscal 2019-20; BOD expands to 9 directors Mr. V G Kannan : A career banker with over 38 years of Banking & Financial services sector exp
Slide 7: The Financial Year that went by
The Financial Year that went by Updates for FY2019-20 Aggregate Deposits grew 35% Y-o-Y; stood at ₹26,164 Crore as on Mar’20. Deposits grew ~10% over Dec’19 quarter. Retail deposits now 43% Loan Assets Under Management (AUM) increased by ~27% y-o-y from ₹24,246 Crore to ₹30,893 Crore driven prim
Slide 8: FY20 / Q4FY20 Key Highlights
FY20 / Q4FY20 Key Highlights FY20 PAT (excluding gains on partial divestment of shares of Aavas Financiers Ltd.) grew by 56% to ₹596 Crore from ₹382 Crore in FY19 , driven by robust growth, cost improvement and stable asset quality1,2 As at 31st March 2020, Gross NPA decreased by 30 bps to ~1.7%
Slide 9: FY20 / Q4FY20 Key Highlights: Impact of COVID-19
FY20 / Q4FY20 Key Highlights Impact of COVID-19 on Key Business Indicators Particulars Impact Disbursements Opportunity missed around ~5-6% (~₹ 20,000 Cr vs ₹ 18,634 Cr) Deposit Mobilization March momentum impacted due to macro issues in banking sector and COVID-19; Deposit Base could have increased
Slide 10: FY20 / Q4FY20 Key Highlights
FY20 / Q4FY20 Key Highlights 11 States and 1 UT 647 Touchpoints 17.2 lakh Customers 17,112 employees Loan Assets Under Total B/S Assets Disbursements1 Deposits3 CASA Ratio4 Management2 ₹ Crore ₹ Crore ₹ Crore ₹ Crore 18,634 30,893 26,164 16% 42,143 24,246 32,623 16,077 19,422 31-Mar-19 31-Mar-20 FY1
Slide 11: FY20 / Q4FY20 Key Highlights
FY20 / Q4FY20 Key Highlights Total Income Net Interest Income PAT Net-worth ₹ Crore ₹ Crore ₹ Crore ₹ Crore 4,992 675 Income (pre- 86 Profit (after tax) from Sale 1,909 79 4,377 4,906 of part stake tax) from Sale in Aavas 596 of part stake 3,163 3,411 Financiers 1,343 in Aavas Ltd. 382 Financiers Lt
Slide 12: Consistent Profitability
Consistent Profitability *Including Profit from Sale of part stake in Aavas Financiers Ltd. RoE3 (%) RoA1 (%) 1.8%* 17.9%* 2.1% 1.2%* 11.4%* 2.1% 0.71% 19.6% 1.6% 1.5% 1.6% 15.3% 14.0% 15.8% 1.1% 10.7% Q4FY19 Q3FY20 Q4FY20 FY19 FY20 Q4FY19 Q3FY20 Q4FY20 FY19 FY20 ROA / ROE – Components NII1 (%) Othe
Slide 13: Vertical-wise ROA for FY20
Vertical-wise ROA for FY20 Small & Mid Term Total Regulatory Retail Branch Business Segments Corporate Lending by Loan Total Assets Treasury Cost (CRR, Overall Assets Banking Assets Treasury Assets SLR & LCR) Loan AUM proportion 84% 16% ~0.1% 100% 100% - - - - Loan AUM Growth y-o-y 38% -3% -92.3% 29
Slide 14: Stable Asset Quality
Stable Asset Quality Credit Cost - Net Impact on P/L Q4FY19 Q3FY20 Q4FY20 FY19 FY20 (All Figures in ₹ Crore) Audited Unaudited Audited Audited Audited Repossession Loss 7 11 11 22 36 POS Loss 4 4 5 6 13 Write off 0 2 0 0 2 Less: Bad Debt Recovery -9 -5 -6 -29 -20 Net Credit Loss 2 12 11 0 32 Net Cre
Slide 15: Well Capitalized
Well Capitalized (₹ Crore) Mar-19 Dec-19^ Mar-20 Audited Unaudited Audited Total Risk Weighted Assets 19,133 21,561 22,510 Tier I Capital 3,053 3,551 4,132 Tier II Capital 641 605 818 Total Capital 3,695 4,156 4,950 CRAR 19.3% 19.3% 22.0% Tier I CRAR 16.0% 16.5% 18.4% Tier II CRAR 3.3% 2.8% 3.6% ^No
Slide 16: Profit & Loss Statement – FY20 Operating PAT grows 56%
Profit & Loss Statement – FY20 Operating PAT grows 56% (All Figures in INR Crore) Q4FY20 Q4FY19 Y-o-Y FY20 FY19 Y-o-Y Q3FY20 Q-o-Q Audited Audited Audited Audited Unaudited Income Interest Earned 1,183 877 35% 4,286 2,949 45% 1,112 6% Interest Expended 629 490 28% 2,377 1,607 48% 605 4% Net Interest
Slide 17: Other Income
Other Income (All Figures in ₹ Crore) Q4FY19 Q3FY20 Q4FY20 FY19 FY20 Break-up of Other Income Audited Unaudited Audited Audited Audited Loan Assets Processing & Other fees 73 87 86 240 321 General Banking & Deposits related fees 14 18 21 46 71 Cross Sell, Distribution related fees & others 14 10 13
Slide 18: Cost Break-up and Efficiency Levers
Cost Break-up and Efficiency Levers Expense Head Type Amt in Cr % Proportion Amt in Cr % Proportion Fixed 598 89% Manpower 669 50% Variable 71 11% Fixed 33 7% Business 474 36% Variable 441 93% Fixed 170 91% Infra & Others 186 14% Variable 16 9% Grand Total* 1,329 1,329 100% Fixed 801 60% Variable 52
Slide 19: Balance Sheet – Total Assets grew 29% y-o-y
Balance Sheet – Total Assets grew 29% y-o-y (All Figures in ₹ Crore) Mar 31, 2020 Mar 31, 2019 Y-o-Y Dec 31, 2019 Q-o-Q Audited Audited Unaudited Liabilities Capital 304 292 4% 304 0% Money received against Share Warrants - 175 - - - Employees stock options outstanding 52 43 21% 57 -9% Reserves and
Slide 20: Marquee Shareholders Base – As on 24th Apr 2020
Marquee Shareholders Base – As on 24th Apr 2020 Holding on Movement from Shareholding Pattern Key Shareholders (Holding 1%+) 24-Apr-20 31st Dec’19 Foreign Institutions Promoter & Promoter & Promoter Group 30.9% (FC, FPI, FII) & NRI Promoter Group - (Non-repatriable), Domestic, 30.9% Redwood Investme
Slide 21: Retail Assets and Small & Mid-Corporate Assets - Snapshot
2. Retail Assets and Small & Mid- Corporate Assets - Snapshot 20
Slide 22: Disbursements grew 16% Y-o-Y led by ~27% growth in RAs
Disbursements grew 16% Y-o-Y led by ~27% Y-o-Y growth in RAs Strong growth in granular small ticket loans including in Used, MSME, Home loans and Business Banking (Amount in ₹ Crores except ATS) Retail Assets Small and Mid Corporate Assets Total New Used & Wheels SBL- GL+CD+ OD Agnst Total Retail Ag
Slide 23: AUM Trends – Retail continues to scale; NBFC continues to shrink
AUM Trends – Retail continues to scale; NBFC continues to shrink AUM grew 27% Y-o-Y led by 38% Y-o-Y AUM growth in Retail Assets Small and Mid Corporate (Amount in ₹ Crores) Retail Assets Term Assets Lending Total New Used & Wheels SBL- GL+CD OD Agnst Total Retail Agri SMC by AUM Particulars Period
Slide 24: Continuous Improvement in Spreads and Asset Quality
Continuous Improvement in Spreads and Asset Quality Maintained AUM IRR Coupled with drop in Cost of Funds leading to improved spreads On Total Retail Assets Small and Mid Corporate Assets AUM Cost of Total Spread New Used & Wheels SBL- GL+CD+ OD Agnst Agri SMC Funds Particulars Period HL Retail REG
Slide 25: Loan Assets Cuts
Loan Assets Cuts Retail Assets – Growth Trajectory Outside of Rajasthan Amount in ₹ Crores FY20 FY19 Y-o-Y Total Retail Assets Disbursements 15,040 11,800 27% Rajasthan Disbursements 6,063 4,695 29% Outside Rajasthan Disbursements 8,976 7,105 26% Overall Loan AUM - Geographically well diversified Ra
Slide 26: Wheels – Extremely well-diversified between product, borrower, usage and markets
Wheels – Extremely well-diversified between product, borrower, usage and markets AUM Break-Up Wheels AUM Break-up by Usage 6% 3% Personal 1% Commercial 40% 14% Tractor CE 51% 23% Personal - 40% Passenger - 22% Loading - 28% Tractor - 6% 62% 0% 1% 1% 3% 3% 5% 0% 1% New Used 20% 39% 18% 6% Cash on Whe
Slide 27: SBL Book – Granular, Secured and Catering to Small Retail Businesses
SBL Book– Granular, Secured and Catering to Small Retail Businesses AUM Break-Up –Geography AUM Break –up by Profile, Collateral and LTV 16% Borrower Profile Collateral Occupancy % LTV 22% 62% 5%2% 2% 32% 47% 36% Semi Urban & Rural Urban Metro 62% 10 Years old well seasoned book 22% Extremely gr
Slide 28: Home Loan Book - Granular, Self Construction and Low LTV book
Home Loan Book - Granular, Self Construction and Low LTV book AUM Break –up by Profile, Collateral and LTV AUM Break-Up –Geography 24% Profile of Borrowers Occupancy Status % LTV 46% 2% 1% 3% 5% 14% 30% 33% Semi Urban & Rural Urban Metro 66% 81% 95% 10-years of vintage product (as a parent of Aava
Slide 29: REG Book – Granular, CF Focused
REG Book – Granular, CF Focused Successful Vintage of 7 Years of funding more than 33,000 units Year Cumulative # of Facilities Total Units Funded Cumulative NOCs Given Cumulative Cumulative Repayment O/S Started given / Projects Funded Across Projects Across All Projects Disbursements (INR Crore) (
Slide 30: NBFC Book – Seasoned and Diversified
NBFC Book – Seasoned and Diversified NBFC Lending spread across varied asset classes – substantially Asset Finance Co’s Cautious Approach – Constant Book, Asset Quality Maintained No. of POS Deposits Seasoning of more than 7 years. Navigated well through the NBFC Type % Mix Clients (INR Crore) (IN
Slide 31: Branch Banking - Snapshot
3. Branch Banking - Snapshot 30
Slide 32: Branch Banking - Snapshot
Branch Banking - Snapshot Growing Deposit Franchise; CASA Ratio of 14% 40% of the Term Deposits are non- callable [Bulk TD – 65% non-callable] CASA RATIO* (%) CASA RATIO* (%) CASA RATIO* (%) Total Deposit Growth 21% 17% 16% 22,052 23,868 Y-o-Y Q-o-Q 20,080 17,079 18,309 13,489 39.7% 8.2% 2,508 2,811
Slide 33: Focused on Building A Granular Retail Deposit Franchise
Focused on Building A Granular Retail Deposit Franchise Share of Retail in Savings Account (SA) Bulk SA Retail SA 2,638 2,811 2,673 2,508 2,611 82% 81% 86% 89% 85% 11% 18% 15% 19% 14% Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Increasing Share of Retail in Term Deposits (TD) Incremental Retail TD Bulk TD Re
Slide 34: Branch Banking – Deposit profile
Branch Banking – Deposit profile 1 1 Area-wise Deposit Distribution Diversified Deposit Build-up across States Based on UTTAR PRADESH HARYANA 4% CHHATTISGARH 13% Deposit 2% Amount MADHYA 1% PRADESH 4% GOA 1% 23% HIMACHAL PRADESH 5% 39% MAHARASHTRA Based on 36% GUJARAT 5% No. of Deposit 31% A/c’s 56%
Slide 35: Treasury
4. Treasury ach art as 34
Slide 36: Diversified Liabilities Portfolio
Diversified Liabilities Portfolio Increasing proportion of Deposits further diversifying the funding profile Funding Source 31-Mar-19 30-Jun-19 30-Sep-19 31-Dec-19 31-Mar-20 Deposits + Borrowings (₹ Crore) 28,036 28,856 30,732 32,534 36,499 Deposits 69% 69% 72% 73% 72% Refinance from FIs 19% 20% 20%
Slide 37: Cost of Funds and Treasury Updates
Cost of Funds and Treasury Updates Stable cost of funds1 Incremental Funds2 raised & its Cost ₹ Crore 7.7% Avg. Cost of funds 7.3% Incremental 8.0% 7.9% Funds Raised 7.8% 7.6% 27,069 Incremental 7.5% 19,696 Cost of Funds Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY19 FY20 Treasury Update Continued focus
Slide 38: Distribution Network, Digital Channels and COVID response
5. Distribution Network, Digital Channels and COVID response 37
Slide 39: Well entrenched contiguous distribution franchise
Well entrenched contiguous distribution franchise 17.2 lakh 17,112 16% CASA 11 States 647 Touchpoints 356 ATMs Customers employees Ratio2 528 Branches1, 88 BCs, Deep Penetration into Core States and Expansion into other States 31 Asset Centers Metro- Rural Urban Semi-urban Rural Total Asset Politan
Slide 40: Digital Channels
The image part with relationship ID rId2 was not found in the file. Digital Channels Above 95% TAB based paperless onboarding Digital Channel Usage trends; More than 2 lakh Internet & Mobile Banking Users 98% 799,453 96% 20,000 91% 42 850,000 91% 40 100% 18,000 180,000 87% 750,000 95% 654,713 16,000
Slide 41: Business Continuity Measures During COVID-19
The image part with relationship ID rId2 was not found in the file. Business Continuity Measures During COVID-19 Customers Business Support Zero downtime in Customer Care Number Remote outbound Call Center solution for VPN based work from home solution. Insurance Zero downtime on Retail In
Slide 42: Covid-19 – AU Response
Covid-19 – AU Response Employees Customer – Engagement and Servicing Society at Large Reskilling and Training of Employees Regular Digital Marketing Campaigns - Contributed INR 5 Crores for Corona Relief Cumulative Employees Across Trainings - 33798 Educational, Engagement and Motivational Measures
Slide 43: About AU Small Finance Bank
6. About AU Small Finance Bank 42
Slide 44: AU BANK – tapping the unreached and unbanked segments
AU BANK – tapping the unreached and unbanked segments Overview Focused on Retail Financing with Diversified Portfolio • AU SMALL FINANCE BANK (“AU BANK” or “Company”) is a scheduled commercial bank Gross AUM of ₹ 30,893 Crore which successfully transited from an Asset Financing NBFC to an SFB; start
Slide 45: Vision & Mission
Vision & Mission AU Vision AU Mission • To be the world’s most trusted retail bank and To build one of India’s largest retail franchise that is coveted employer admired for: • That is admired as the epitome of financial • Making every customer feel supreme while being inclusion and economic success,
Slide 46: AU Journey - natural progression to Bank
AU Journey - natural progression to Bank FY96 to FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Fund Manager ₹ 1000 Cr Channel Partner Investment by Temasek NBFC – Asset Finance Company Small Finance Bank CA, SA, Deposits, Lockers, Payments & Settlement, TP
Slide 47: Experienced Board of Directors
Experienced Board of Directors Mr. Raj Vikash Verma Mr. Krishan Kant Rathi Ms. Jyoti Narang Mr. V.G. Kannan Chairman and Independent Director Independent Director Independent Director Independent Director 35+ years of experience 29+ years of experience 37+ years of experience 38+ years of experience
Slide 48: Disclaimer
Disclaimer This presentation has been prepared by AU SMALL FINANCE BANK LIMITED (the “Bank”) solely for information purposes, without regard to any specific objectives, financial situations or informational needs of any particular person. All information contained has been prepared solely by the Ban
Slide 49: THANK YOU
THANK YOU Contact for Investor queries: Sunil Parnami / Aseem Pant/ Ayush Rungta AU Small Finance Bank Ltd Tel: +91 73400 12458 / +91 88792 28892 / +91 84548 13139 Email: investorrelations@aubank.in 48
Slide 50: Abbreviations
Abbreviations ADC Alternate Delivery Channels NII Net Interest Income AFS Available for Sale NPA Non Performing Assets ALM Asset Liability Management NSE National Stock Exchange AUM Asset Under Management OPEX Operating Expenses BSBDA Basic Savings Bank Deposit A/C P/L Profit & Loss Statement BSE Bo
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