Iifl Finance Limited · NSE:IIFL
Iifl Finance — Q1 FY22 Earnings Presentation
58 slides from Iifl Finance's earnings presentation, Jul 27, 2021
Slide 1: Exchange filing cover letter
July 27, 2021 The Manager, The Manager, Listing Department, Listing Department, BSE Limited, The National Stock Exchange of India Ltd., Phiroze Jeejeebhoy Tower, Exchange Plaza, 5 Floor, Plot C/1, G Block, Dalai Street, Bandra - Kuria Complex, Bandra (E), Mumbai 400 001. Mumbai 400 051. BSE Scrip Co
Slide 2: IIFL Finance reports quarterly profit of Rs.266 crores
IIFL Finance Limited Press Release For immediate publication Mumbai, India July 27, 2021 IIFL Finance Results update IIFL Finance reports quarterly profit of Rs.266 crores, up 8x y-o-y and 7% q-o-q; driven by retail and digital focus IIFL Finance Limited Consolidated Results – Q1FY22 Quarter ended Q
Slide 3: Financial performance review
Financial performance review IIFL Finance had loan assets under management (loan AUM) of Rs 43,160 Cr as at June 30, 2021, with the home loans segment constituting 34%, gold loans 31%, business loans 16% and microfinance loans 10% of the total AUM. During the quarter, the Company took a cautious app
Slide 4: Update on transfer of real estate credit assets to an AIF
Update on transfer of real estate credit assets to an Alternate Investment Fund (AIF) A significant part of the CRE asset portfolio has been sold to an AIF during the quarter ended June 30, 2021. Some more assets are likely to be sold in the current quarter. The AIF has signed a Contribution Agreeme
Slide 5: About IIFL
About IIFL IIFL Group is one of the leading players in the Indian financial services space. Prior to the Composite Scheme of Arrangement (effective May 2019), IIFL Finance Limited (Erstwhile “IIFL Holdings Limited”) (Bloomberg Code: IIFL IN, NSE: IIFL, BSE: IIFL) was engaged in the business of finan
Slide 6: Performance review
Performance review Quarter ended June 30, 2021 (Q1FY22) Bloomberg: IIFL IN IIFL Finance Limited July 27, 2021
Slide 7: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 8: Business and strategy snapshot
Business and strategy snapshot As on June 30, 2021 Core products Mix (%) • IIFL is focused on retail loans, distributed through IIFL Finance its website, App & branches. 91% of its loan portfolio `` (NBFC) Listed Company Gold loan 31% comprises Gold/ Micro finance loans of ticket size ~ IIFL Home Fi
Slide 9: Key highlights (consolidated)
Key highlights (consolidated) Return on- Equity / Asset1 Net Profit Loan AUM ₹43,160 Cr Up 13% y-o-y 19.7% / 2.6% ₹ 266 Cr Previous year Q1 2.7% / 0.4% Up 735% y-o-y Gross / Net NPAs Pre Provision Cost of Funds Operating Profit 9.0% 2.2% / 1.0% down 33 bps y-o-y Previous year Q1 1.7% / 0.8% ₹ 516 Cr
Slide 10: Loans are predominantly retail and granular
Loans are predominantly retail and granular Diversified AUM portfolio disperses exposure and balances cyclical vagaries (₹ Cr) 16,176 22,281 34,904 37,951 44,688 43,160 2% 1% 1% 2% Commercial Vehicle 7% 8% 13% Commercial & Real 14% Estate 12% 10% Capital Markets Microfinance 11% 10% 7% 9% 17% 16% 24
Slide 11: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 12: Consolidated results (as per IND AS)
IIFL Finance – Consolidated results (as per IND AS) Quarter ended June 30, 2021 (NBFC, HFC and MFI) ` Cr Q1FY22 Q1FY21 Y-o-Y Q4FY21 Q-o-Q Interest income 1,245.0 1,095.1 14% 1,264.4 (2%) Interest expense (700.9) (693.0) 1% (680.6) 3% Net interest income 544.1 402.1 35% 583.8 (7%) Income from assigne
Slide 13: Income analysis
Income analysis (Consolidated as per IND AS) Quarter ended June 30, 2021 (NBFC, HFC and MFI) ₹ Cr Q1FY22 Q1FY21 Y-o-Y Q4FY21 Q-o-Q Loan book using risk capital 28,599 26,413 8% 29,784 (4%) Securitized book1 4,302 1,936 122% 3,828 12% Loan Book (Ind AS Balance sheet) 32,901 28,350 16% 33,612 (2%) Ass
Slide 14: Consolidated Balance sheet
IIFL Finance – Consolidated Balance sheet Unaudited as at June 30, 2021 (NBFC, HFC and MFI) ASSETS ₹ Cr LIABILITIES AND EQUITY ₹ Cr 1 Financial Assets 1 Financial Liabilities (a) Cash and Bank Balances 3,972 (a) Payables 92 (b) Receivables 108 (b) Borrowings (c) Loan Assets 32,819 - NCDs 10,410 (d)
Slide 15: Consistent financial performance and growth over years
Consistent financial performance and growth over years Loan AUM (₹ Cr) Profit after tax (PAT) (₹ Cr) ● In Q1FY22, loan AUM had a marginal de-growth as Core Synergistic Annual Quarterly part of CRE portfolio was 43,160 sold and Covid wave 2 44,688 761 712 slowed new disbursals 37,951 34,904 31,228 50
Slide 16: Robust and improving financial position
Robust and improving financial position Return on assets (%) Return on equity (%) Quarterly Quarterly Annual Annualized ● Annualised ROA reached Annualized highest ever level of 2.6%, whereas 19.7% 2.6% 17.9% annualised ROE stood at 2.2% 15.2% 15.3% 2.0% 2.0% 13.3% 1.6% 11.3% 19.7% for Q1FY22. 1.5%
Slide 17: Fall in loan disbursements due to Covid second wave
Fall in loan disbursements due to Covid second wave.. Disbursement trends (₹ In Crs) Gold Loan Home Loan 5,024 5,682 4,909 5,025 1,780 1,318 3,312 3,603 3,924 3,718 863 987 2,107 607 693 750 350 267 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2F
Slide 18: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 19: Superior asset quality maintained through cycles
Superior asset quality maintained through cycles… Gross NPA (%) Net NPA (%) ● GNPA stands at 2.21% and NNPA at 1.02%, slightly 2.21% 1.76% 1.74% 2.04% 1.98% higher than previous quarter, 1.62% 0.89% 1.02% 0.82% 0.52% 0.58% 0.49% despite conservative practice of write offs, due to Covid FY17 FY18 FY1
Slide 20: Covid second wave has marginal impact on asset quality
Covid second wave has marginal impact on asset quality Credit quality has been steady across key product segments Core growth segments Synergistic segments Home loans Business loans Construction & Real Estate finance Gross NPAs (%) Gross NPAs (%) Gross NPAs (%) 4.4% 3.8% 1.5% 1.6% 5.7% 6.0% 1.4% 2.4
Slide 21: Conservative provisioning across all segments
Conservative provisioning across all segments As at June 30, 2021 (NBFC, HFC and MFI) ₹ in Crores Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Provision Business loan book1 Total 0-30 dpd 30-90 dpd 90+ dpd Provision % As per RBI As per ECL Home Loans 9,544.3 496.1 164.9 10,205.3 1.7% 3.6% 41.0% 1
Slide 22: Restructuring & ECL Provision Movement
Restructuring & ECL Provision Movement As at June 30, 2021 (NBFC, HFC and MFI) ` in Crores Restructuring Provision Movement Addition Net release Cumulative Opening Closing Business1 Q1 FY22 during the during the Q1FY22 Provision Provision quarter quarter2 Home Loans 109.7 241.0 186.1 64.0 (1.2) 248.
Slide 23: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 24: Well diversified sources of funding
Well diversified sources of funding.. Resource profile is well diversified, with increasing share of bank loans Outstanding borrowing (₹ Crs) Bonds/ NCDs investors split (%) 15,395 17,982 24,539 26,141 25,734 28,426 27,831 Others, Public, 22.0% 12.3% CBLO Foreign Investors , 39.8% 2% Banks/FIs, 5% 8
Slide 25: Structural Liquidity- Surplus across all buckets
Structural Liquidity- Surplus across all buckets ` in Crores Surplus/ (Deficit) as a % of outflow (cumulative) 628% 92% 111% 97% 88% 41% 20% 23% 0% 41,864 38,192 41,864 34,221 31,071 21,711 28,547 16,265 15,343 10,279 7,976 5,035 8,650 3,038 2,618 5,224 418 3,788 Up to 14 days 1 month 2 months 3 mon
Slide 26: Debt repayment obligation schedule, well covered
Debt repayment obligation schedule, well covered ₹ in Crores Cash & Cash equivalents as on June 30, 2021 3,972 Earmarked cash & cash equivalents (2,049) 10,507 Free cash & cash equivalents 1,923 Liquid investments / Unutilised CC (+) 868 9,663 Undrawn credit lines (+) 1,703 8,785 Aggregate liquidity
Slide 27: Debt resource raising trend
Debt resource raising trend Term Loan Bonds Refinance ₹ in Crores 4,555 3,987 700 3,889 2,721 500 908 425 1,402 2,856 1,005 1,822 975 320 3,062 2,981 152 671 1,746 825 550 999 831 275 425 180 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 During the quarter: IIFL’s long term credit rating from C
Slide 28: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 29: Home loans – industry overview
Home loans – industry overview Indian Mortgage market is expected to be INR 36.9 Trillion by Mar 20231 Rising demand for housing in tier-II-III cities is expected to result into INR INR 11 surge in construction 22Trillion + Trillion+ which will increase the focus of financiers on urban areas. Mort
Slide 30: Home loans – product overview
Home loans – product overview Distribution of AUM as at June 30, 2021 Primary focus on affordable and non-metro customers. 92% of home loans were disbursed to customers under PSL category Uttar Pradesh, Uttarakhand Target segment is salaried and self –employed Tamil Nadu, 13% Andhra Pradesh, pro
Slide 31: Home loans – financial overview
Home loans – financial overview Assets Under Management (₹ Crore) Portfolio Yield (%) Self Employed Salaried 5,300 8,579 12,197 12,443 14,439 14,747 41% 48% 54% 58% 61% 61% 10.3% 10.3% 10.2% 10.1% 9.8% 59% 52% 46% 9.6% 42% 39% 39% FY17 FY18 FY19 FY20 FY21 Q1FY22 FY17 FY18 FY19 FY20 FY21 Q1FY22 Avera
Slide 32: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 33: Business loans – industry overview
Business loans – industry overview Micro segment: Biggest beneficiary of fresh disbursals supported by ECLGS Mar-20 Mar-22 27% Non-banks Market Share 20% 18% 23% 21% 10-12% 7% 7-9% 8% 8% 4% 3-5% 3% FY16 FY17 FY18 FY19 FY20 FY21P FY22P (3)-(4)% Non-banks Banks Non-bank MSME credit to pick up graduall
Slide 34: Business loans – product overview
Business loans – product overview Distribution of AUM as at June 30, 2021 For business loans backed by cash flows South, 21% 40% of unsecured unsecured MSME portfolio North, 35% covered through CGTMSE guarantee scheme Focus on balancing prudent credit underwriting with instant in-principle dec
Slide 35: Business loans – financial overview
Business loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 8,117 7,805 7,464 7,361 7,114 19.6% 6,000 16.3% 16.7% 17.3% 13.5% 14.3% FY17 FY18 FY19 FY20 FY21 Q1FY22 FY17 FY18 FY19 FY20 FY21 Q1FY22 Onboarding Average Ticket Size (₹ Lakhs) Gross NPAs (%) 83.0 6.0% 5.7% 49.0
Slide 36: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 37: Gold loans – industry overview
Gold loans – industry overview Industry Gold Loans – Organized Market1 (₹ bn) 4,617 4,051 25,000 tonnes 3,448 of gold is held by Indian 2,928 2,168 2,467 Households (65% in Rural India) FY17 FY18 FY19 FY20 FY21 FY22E 47% Gold loans expected to growth at a higher rate amongst all asset classes of t
Slide 38: Gold loans – product overview
Gold loans – product overview Distribution of AUM as at June 30, 2021 Branches in. more than 1000 towns/ cities Loan against gold ornaments for personal & business use with on-boarding LTV ~70% In-house loan origination tablet application South, 25% North, 24% equipped to screen customers for
Slide 39: Gold loans – financial overview
Gold loans – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 13,149 13,262 18.7% 19.6% 18.6% 9,125 18.1% 18.1% 16.9% 6,195 4,037 2,910 FY17 FY18 FY19 FY20 FY21 Q1FY22 FY17 FY18 FY19 FY20 FY21 Q1FY22 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 58 56 59 59 53 48 0.9
Slide 40: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 41: Microfinance – industry overview
Microfinance – industry overview Overall MFI to grow by 25-26% in FY22 (₹ bn) 978 744 773 567 136 198 231 355 FY15 FY16 FY17 FY18 FY19 FY20 FY21P FY22P 1. Growth for the FY22 is projected at 25-26% 2. Microfinance borrowers highly depend on the source of credit for their daily livelihood, they have
Slide 42: Microfinance – product overview
Microfinance – product overview Distribution of AUM as at June 30, 2021 Small-ticket loans for purpose of income WestBengal, Assam, 1% UttarPradesh, 7% generation activities 2% Bihar, 19% TamilNadu, Target segment is rural and semi-urban self- 18% Chhattisgarh, 1% employed women in joint liabili
Slide 43: Microfinance – financial overview
Microfinance – financial overview Assets Under Management (₹ Crore) Boarding Yield (%) 3,400 4,738 4,386 2,286 25.9% 24.4% 22.6% 22.0% 22.1% 22.5% 20.9% 840 110 238 FY16 FY17 FY18 FY19 FY20 FY21 Q1FY22 FY16 FY17 FY18 FY19 FY20 FY21 Q1FY22 Onboarding Average Ticket Size (₹ ‘000s) Gross NPAs (%) 37 34
Slide 44: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 45: Non-core synergistic products
Non- core synergistic products Construction & real estate financing; Capital market • The Company’s growth thrust is on small ticket retail lending products- suitable for partnering with banks. The two non core products are not pursued to leverage group synergies. 1. Construction & real estate (CRE)
Slide 46: Agenda
1. Q1FY22 Financial performance i. Key highlights ii. Financial performance iii. Asset quality iv. Liquidity position 2. Business segments review i. Home loan ii. Business loan iii. Gold loan iv. Microfinance v. Non-core (CRE & Capital market) 3. Corporate, Digital strategy & ESG updates
Slide 47: IIFL Home Loan Digital Ecosystem
IIFL Home Loan Digital Ecosystem Customer On-Boarding Process Customer Servicing Process Home Loan Application Customer Applications Sales Mobile App KYC KYC Accurate Accurate Income Income PropertyData Property Data Financial Financial Digital Fintech Integrations – Real Time Validated Data + Eligi
Slide 48: Secured business loans: Digital up selling for customer retention
Secured business loans: Digital up selling for quality customer retention A complete paperless journey with no human touch points Pool Selection Digital Interface Identification of Customer details fetched from eligible pool through Parent loan data analytics ₹282 Cr disbursed till June 2021 Launch
Slide 49: Home loan: Aiming for inclusive growth
Home loan: Aiming for inclusive growth First time home buyers (Since inception) Gender Equality 122800+ 118000+ 39% 92000+ 61% 78000+ 48000+ Only male owner Financial Inclusion (Loans given to informal segment) 26000+ 38500+ 39900+ 25500+ FY17 FY18 FY19 FY20 FY21 Q1FY22 19500+ Families 9000+ benefit
Slide 50: Gold loan: Supporting small ticket borrowers
Gold loan: Supporting small ticket borrowers Gold loans are essentially small-ticket business loans 65% of gold loan are of less than 82% of the branches are located in tier II, III cities and rural areas ₹ 50,000 value 62% of loans given to small 7% of loans is for agricultural businesses purposes
Slide 51: Microfinance: Aiming for financial inclusion
Microfinance: Aiming for financial inclusion Microfinance loans are for income generating activities 88% of these benefited 16.1 lakhs+ families customers stay in the rural area benefited in 17 states with of the country financial intervention 5,500+ dairy farmers supported Supports self-employed wo
Slide 52: Distinguished Board of Directors
Distinguished Board of Directors IIFL Finance – Board of Directors Nirmal Jain, Chairman & Whole-time Director R Venkataraman, Managing Director MBA from IIM Ahmedabad, rank-holder CA and MBA from IIM Bangalore, B-Tech from IIT Kharagpur ICWA. Worked with ICICI Bank, Barclays, GE Capital Wor
Slide 53: Highly experienced senior management
..supported by highly experienced senior management Rajesh Rajak Sanjeev Sneha (Chief Financial Srivastava Patwardhan IIFL Finance Officer) (Chief Risk (Compliance Officer) Officer) Monu Ratra Amit Gupta Abhishikta (Chief (Chief Munjal IIFL Home Executive Financial (Chief Risk Finance Officer) Offic
Slide 54: Environment, Social and Governance (ESG) Initiatives
Environment, Social and Governance (ESG) Initiatives As a responsible corporate, IIFL Finance aims to deliver sustainable growth through financial products and services that help satisfy unmet societal needs, enable a thriving society, conserve environment and create long-term value for all The
Slide 55: IIFL HFL contribution to Environment Sustainability
IIFL HFL contribution to Environment Sustainability- Green affordable housing impact by green value partners • Pioneered Green Building concept in IGBC preliminary certified / certified projects under partnership with housing developers management – 12,472 units through "Kutumb" platform • It provid
Slide 56: Support to employees and customers during COVID
Our continued support to employees and customers during COVID Vaccinated Tie-ups with COVID casualties’ employees for free/ hospitals for families taken care for reimbursed costs employee health, education & vaccinations living expenses Used Corporate buffer Paid leave for Rolled out Healthify in Gr
Slide 57: CSR projects continue amid covid
CSR projects continue amid covid with creative use of technology Sakhiyon ki Badi (Rajasthan) Seva Kutirs – Mid Day Meal Conducted Mid Day Meal programme to serve Nutritional Sakhiyon ki Baadi is an initiative aimed at eradication of meal to children who were affected due to COVID female illiter
Slide 58: Thank you
Thank you Published in July 2021 IIFL Finance Ltd. All rights reserved. Regd. Off: IIFL House, Sun Infotech Park, Road No. 16V, Plot No.B-23, Thane Industrial Area, Wagle Estate, Thane – 400604. This report is for information purposes only and does not construe to be any investment, legal or taxatio