CARE Ratings Ltd · NSE:CARERATING
CARE Ratings — Investor Presentation (October 2017)
25 slides from CARE Ratings's investor presentation, Oct 25, 2017
Slide 1: NBFCs in India's Financial Landscape
NBFCs in India’s Financial Landscape - Manisha Sachdeva (Associate Economist) - Darshini Kansara (Research Analyst)
Slide 2: Basis and purpose of the presentation
This presentation is based on the Reserve Bank of India (RBI) study and we, at CARE Ratings Limited, have juxtaposed the numbers for Banking sector and Housing Finance Companies (HFCs)*, wherever possible. The purpose of this presentation is only to understand the Non-Banking Financial Companies (NB
Slide 3: Introduction – NBFCs
Introduction – NBFCs 1. NBFCs are specialized intermediaries that are regarded as shadow banks 2. They leverage on lower transaction costs, financial innovations and regulatory arbitrage 3. They play an important role in emerging economies as they have the ability to Reach out to inaccessible area
Slide 4: Introduction – NBFCs Contd.
Introduction – NBFCs Contd. Shadow banking refers to all non-bank financial intermediaries that provide services similar to those of traditional commercial banks The Shadow Banking sector in India primarily includes NBFCs and collective investment vehicles NBFCs are distinctly different from s
Slide 5: Introduction – NBFCs Contd.
Introduction – NBFCs Contd. NBFCs had the third largest bilateral exposures after banks and mutual funds Also, they are the biggest receivers of funds, on a net basis, surpassing banks, signifying their systemic importance In the context of slowdown in bank credit in wake of asset quality stre
Slide 6: Structure of NBFIs sector in India
Structure of NBFIs sector in India Non-Banking Financial Institutions (NBFIs) Non- Banking Financial All India FInancial Primary Dealers Companies (NBFCs) Institutions EXIM NABARD SIDBI National Housing NBFCs-D NBFCs-ND Bank (NHB) Systemically Important Housing Finance NBFCs-ND Companies (HFCs) (NBF
Slide 7: Different types of NBFCs in India: End-March position: FY17
Different types of NBFCs in India: End-March position: FY17 NBFC-D, 178 NBFC-ND-SI, 218 (1.5%) (1.9%) NBFC-ND, 11,126 (96.6%) Note: Data for FY17 are provisional NBFC’s in India’s Financial Landscape 25th October 2017
Slide 8: Distribution of assets across NBFCs-ND-SI and NBFCs-D
Distribution of assets across NBFCs-ND-SI and NBFCs-D: End-March position In view of phenomenal increase in the number and deposits, a comprehensive legislative NBFCs-D framework for NBFCs-D was introduced in 14.8% 1997 to protect the interest of the depositors. A conscious policy was pursued to
Slide 9: Classification of NBFCs based on activities undertaken
Classification of NBFCs based on activities undertaken Sr No Types of NBFCs Activity Financing of physical assets supporting productive/economic 1 Asset Finance Company (AFC) activity, including automobiles, tractors and generators. Providing finance by extending loans or otherwise for any 2 Loan Co
Slide 10: Classification of NBFCs based on activities undertaken
Classification of NBFCs based on activities undertaken Sr No Types of NBFCs Activity Extending credit to economically disadvantaged groups as well 7 Micro Finance Institution (NBFC-MFI) support Micro, Small and Medium Enterprises (MSMEs). Undertaking the business of acquiring receivables of an 8 Fac
Slide 11: Classification of NBFCs based on activities undertaken: FY17
Classification of NBFCs based on activities undertaken: FY17 CICs-ND-SI IDF-NBFCs NBFCs-Factor 2.2% 0.6% 0.1% NBFCSs-MFI 3.0% Investment companies 12.6% Loan Companies AFCs 36.2% 13.7% NBFCs-IFC 31.5% Note: 1. Data for FY17 are provisional 2. NOFHC, MGC and NBFC-AA data are not captured as they have
Slide 12: Liabilities Breakup (%) of NBFCs: Comparison with SCBs and HFCs
Liabilities Breakup (%) of NBFCs: Comparison with SCBs and HFCs 5.9 4.5 9.9 28.5 69.9 77.9 54.4 1.6 18.0 6.0 7.0 10.6 4.7 0.7 0.4 NBFCs Banks HFCs Share capital Reserves and Surplus Public deposits Borrowings Others Note : Data for banking sector pertains to FY16 and FY17 for NBFCs (Provisional) and
Slide 13: Assets Breakup (%) of NBFCs: A Comparison with SCBs and HFCs
Assets Breakup (%) of NBFCs: A Comparison with SCBs and HFCs 7.0 6.3 1.5 4.0 8.3 13.6 24.5 71.8 75.5 60.9 2.5 6.4 17.8 NBFCs Banks HFCs Loans and advances Investments Cash and bank balances Other Loans Others Note: Data for banking sector pertains to FY16 and FY17 for NBFCs (Provisional) and HFCs 1.
Slide 14: Borrowings breakup(%) of NBFCs-ND-SI: FY17 P
Borrowings breakup(%) of NBFCs-ND-SI : FY17 P 16.1 3.5 49.2 9.7 21.6 Debenutres Bank borrowings Commercial paper Inter-corporate borrowings Others Note : Data for NBFCs for FY17 are provisional NBFC’s in India’s Financial Landscape 25th October 2017
Slide 15: Public deposits of NBFCs-D, Banks and HFCs
Public deposits of NBFCs- D, Banks and HFCs Outstanding deposits (Rs lakh crore) FY17 NBFCs- D 0.31 Banks 108.05 Time deposits 95.11 Demand deposits 12.94 HFCs 0.50 Deposits with NBFCs stood at Rs 0.31 lkh crores as on 31st March’2017 compared with time deposits of 95.11 lkh crs in the banking sys
Slide 16: Credit growth of NBFCs, Banks and HFCs: FY17
Credit growth of NBFCs, Banks and HFCs: FY17 28.4 30 25 20 17.1 13 % 15 10 5.4 5 0.6 0 NBFCs-ND-SI Banks Private sector Public sector HFCs banks banks Note : Data for NBFCs for FY17 are provisional NBFC’s in India’s Financial Landscape 25th October 2017
Slide 17: Growth rate of credit of major categories of NBFCs
Growth rate of credit of major categories of NBFCs 40 36.3 30 22.7 22.1 23.1 20 10 7.6 % 5.6 0 -3.4 -10 -20 -17.1 Loan companies NBFCs- IFC NBFCs-MFI AFCs FY16 FY17 Note : Data for NBFCs for FY17 are provisional Bank credit for consumer durables and vehicles increased by 22% and 13% in FY16 and FY17
Slide 18: NBFCs-ND-SI credit, bank credit and HFCs credit as a % of GDP
NBFCs-ND-SI credit, bank credit and HFCs credit as a % of GDP: FY17 51.9 60 50 40 30 % 20 7.9 1.0 10 0 NBFCs Banks HFCs Note : GDP based on 2011-12 base year, current prices NBFCs data are provisional NBFC’s in India’s Financial Landscape 25th October 2017
Slide 19: Sectoral distribution of credit – NBFCs and Banks: FY17
Sectoral distribution of credit – NBFCs and Banks : FY17 5.6 2.5 13.9 17.7 22.7 NBFCs - ND - SI Banks 14.7 59.6 37.5 25.8 Agriculture Industries Services Retail Others Note : Data for NBFCs for FY17 is provisional NBFC’s in India’s Financial Landscape 25th October 2017
Slide 20: Share of MSEs in total credit: FY17
Share of MSEs in total credit : FY17 10.5 12 10 8 5.2 6 % 4 2 0 NBFCs Banks Note : Data for NBFCs for FY17 is provisional NBFC’s in India’s Financial Landscape 25th October 2017
Slide 21: Growth of Infrastructure finance: NBFCs-ND-SI and SCBs
Growth of Infrastructure finance : NBFCs-ND-SI and SCBs 8 6 5.6 4 2 0.3 0 % -2 -2.3 -4 -6 -6 -8 FY16 FY17 NBFCs Banks Note : Data for NBFCs for FY17 is provisional NBFC’s in India’s Financial Landscape 25th October 2017
Slide 22: Trend in NPA ratio: end-Mar'17
Trend in NPA ratio : end-Mar’17 9.6 10.0 8.0 5.0 6.0 % 4.0 2.0 0.0 NBFCs Banks Note : Data for NBFCs for FY17 is provisional NBFC’s in India’s Financial Landscape 25th October 2017
Slide 23: Return on Assets of NBFCs, Banks and HFCs: end Mar'17
Return on Assets of NBFCs, Banks and HFCs: end Mar’17 2.3 2.5 1.9 1.8 1.8 2 1.5 % 1 0.4 0.5 0 NBFCs-ND-SI NBFCs-D NBFCs Banks HFCs Note : Data for NBFCs for FY17 is provisional ROA for HFCs have been calculated by dividing FY17 PAT by average assets for FY16 and FY17 NBFC’s in India’s Financial Land
Slide 24: CRAR of NBFCs and Banks: end-March position 2017
CRAR of NBFCs and Banks : end-March position ; 2017 23.0 25.0 22.0 20.0 20.0 13.6 15.0 % 10.0 5.0 0.0 NBFCs-ND-SI NBFCs-D NBFCs Banks Note : Data for NBFCs for FY17 is provisional NBFC’s in India’s Financial Landscape 25th October 2017
Slide 25: Thank You
Thank You NBFC’s in India’s Financial Landscape 25th October 2017