Fino Payments Bank Ltd. · NSE:FINOPB
Fino Payments Bank — Q3 FY2022 Earnings Presentation
53 slides from Fino Payments Bank's earnings presentation, Jan 27, 2022
Slide 1: Q3FY22 Investor Presentation
Classification: Public Q3FY22 Investor Presentation 27th January 2022 Classification: Public
Slide 2: Highlights of Fino Payments Bank's differentiating factors
Classification: Public Highlights of Fino Payments Bank’s differentiating factors Fino Payments Bank is the first ever payments bank to list in India Fino Payments Bank is a profitable fintech bank Fino Payments Bank is the first private Scheduled Bank in the payment bank space in India Fino Payment
Slide 3: Table of Contents
Classification: Public Table of Contents 9MFY22 Highlights Q3FY22 Highlights Key Strategies for a Digital Future Q3FY22 Financial Performance Product Performance Trends Core Technology and Digital Strategy ESG, Board and Management Team Classification: Public
Slide 4: 9MFY22 Highlights
Classification: Public 9MFY22 Highlights 4 Classification: Public
Slide 5: The Journey of Profitability: Onwards and Upwards
Classification: Public The Journey of Profitability: Onwards and Upwards Fino Bank continues to chart disproportionate profit growth every quarter Reasonable and sustainable growth in revenue leading to…. …. Disproportionate growth in profits Total Revenue PAT (in ₹ cr) (in ₹ cr) 29% 95% 723.56 25.1
Slide 6: 9MFY22 comparison over 9MFY21
Classification: Public 9MFY22 comparison over 9MFY21 Financial performance and operating parameters Total Throughput Total Revenue EBITDA PAT (in ₹ cr) (in ₹ cr) (in ₹ cr) (in ₹ cr) 42% 29% 46% 95% 723.56 54.96 1,34,043 25.12 94,507 559.19 37.66 12.89 9MFY21 9MFY22 9MFY21 9MFY22 9MFY21 9MFY22 9MFY21
Slide 7: Q3FY22 Highlights
Classification: Public Q3FY22 Highlights 7 Classification: Public
Slide 8: Milestones achieved in Q3FY22
Classification: Public Milestones achieved in Q3FY22 Reclaiming pre-COVID levels in one business and touching new milestones in two other businesses Monthly CASA Opened CMS Monthly Remittance Throughput in a month Throughput 100% of Feb-20 2 lac + ₹ 2,000 cr + (pre-COVID) 8 Classification: Public
Slide 9: Industry Leading Performance Highlights in Q3FY22
Classification: Public Industry Leading Performance Highlights in Q3FY22 Demonstrating strong growth in business volumes, revenue and profitability 18 Cr+ ₹49,168 Cr 8.7 lac ₹956K Transactions on Fino platforms Total Throughput in Q3FY22 Registered merchants on Fino Revenue per employee in Q3FY22 58
Slide 10: Revenue and Margins on Own and Open Banking Channels
Classification: Public Revenue and Margins on Own and Open Banking Channels Strong margins in own banking channel and high revenue growth in open banking channel Own Banking Channel Open Banking Channel ₹72.38 Cr 9% Transaction Revenue (ex BC Banking) Revenue in Q3FY22 ₹97.85 Cr ₹275.16 Cr ₹109.28 C
Slide 11: Strong Revenue Momentum in Q3FY22
Classification: Public Strong Revenue Momentum in Q3FY22 Emerging products like CMS, subscription and renewal income contributing to steady revenue growth alongside legacy products (in ₹ cr) 20% 14% 275.16 Revenue in Q3FY22 242.15 228.65 231.84 ₹275.16 Cr 151.32 179.20 206.24 20% growth over Q3FY21
Slide 12: Revenue Trajectory Mirroring Trends but at an Elevated Growth Level
Classification: Public Revenue Trajectory Mirroring Trends but at an Elevated Growth Level Revenue levels in FY22 is much higher than FY20 and FY21 levels, but mirroring similar sequential growth trends Revenue Q1FY21 started 12.1% higher over Q1FY20 (in ₹ cr) and then growth momentum picked up
Slide 13: Highest ever quarterly PAT in Fino Bank History!
Classification: Public Highest ever quarterly PAT in Fino Bank History! Q3FY22 PAT higher than H1FY22 PAT (in ₹ cr) 14.10 PAT for Q3FY22 at ₹14.10 Cr 4.52 6.52 7.58 7.89 116% growth over Q3FY21 1.85 3.13 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 Q3FY22 33.45% Annualized ROE of Q3FY22 20.66% 20.03% 1
Slide 14: Outlook for Q4FY22
Classification: Public Outlook for Q4FY22 Strong exit trends in Q3FY22 gives us confidence of an even better Q4FY22 ahead Business Outlook in Q4FY22 Legacy products – DMT and MATM & AEPS High margin products – CASA and CMS Normalization in economy to boost Remittance business Account opening mon
Slide 15: Key Strategies for a Digital Future
Classification: Public Key Strategies for a Digital Future 15 Classification: Public
Slide 16: Physical to Digital Transition at the Middle of the Pyramid
Classification: Public Physical to Digital Transition at the Middle of the Pyramid Fino incorporating best of both the worlds through a PHYGITAL ecosystem Funnel more new-to-formal financial services customers into the Fino Bank ecosystem Physical Ecosystem Hook Products Customer Ownership Domestic
Slide 17: The Phygital World – PHYsical and diGITAL
Classification: Public The Phygital World – PHYsical and diGITAL The shift from physical to digital is a gradual transition for customers at the middle of the pyramid – a sweet spot for Fino Addressing problems of the present While investing for the future Cash In Circulation – Industry UPI Payments
Slide 18: Digital Marketplace Ecosystem
Classification: Public Digital Marketplace Ecosystem Seamless movement of cash in the merchant ecosystem – generating revenue in all legs From One Revenue Centre… To … Another Revenue Centre Fino Bank Branch Bill Payments Cross sell opportunities to Open a Fino customers on Bank savings Fino Bank Me
Slide 19: Cash Marketplace Ecosystem
Classification: Public Cash Marketplace Ecosystem Seamless movement of cash in the merchant ecosystem – generating revenue in all legs From One Revenue Centre… To … Another Revenue Centre Merchant’s core business cash Cash Management flow Cash inflow Cash outflow into Fino’s from Fino’s Remittance M
Slide 20: Q3FY22 Financial Performance
Classification: Public Q3FY22 Financial Performance 20 Classification: Public
Slide 21: Bank Level Profit & Loss
Classification: Public Bank Level Profit & Loss Revenue growth of 20% in Q3FY22 leading to a PAT growth of 116% Particulars Q3FY22/ Q3FY22 Q2FY22 Q3FY21 9MFY22 9MFY21 YoY Growth (in ₹ cr) Q3FY21 Revenue 275.16 242.15 228.65 20% 723.56 559.19 29% Product Cost 188.85 160.77 158.04 19% 485.11 362.76 34
Slide 22: Revenue Mix Across Parameters in Q3FY22
Classification: Public Revenue Mix Across Parameters in Q3FY22 Annuity subscription business to continue to boost contribution of subscription revenue in the overall revenue pie Income Breakup: Transaction & Subscription Income Breakup: Own and Open Banking Channel 38% 36% 62% 64% Transaction Income
Slide 23: Revenue Mix Across Products
Classification: Public Revenue Mix Across Products Shift in revenue mix towards higher margin products like CASA & CMS and high take rate products like Remittance in Q3FY22 20% Total Bank Level Revenues (in ₹ cr) 228.7 275.2 3.4%, 7.83 5.2%, 14.4 13.4%, 36.9 CMS & CASA occupy 16.1% of 20.0%, 45.7 th
Slide 24: Key Ratios at Bank Level
Classification: Public Key Ratios at Bank Level PAT Margins on a rise despite Take Rates and Gross Margins being range-bound – implies strong Operating Leverage Take Rate (ex. UPI throughput) Blended Gross Margins 0.73% 0.60% 0.59% 33.97% 32.38% 32.96% FY20 FY21 9MFY22 FY20 FY21 9MFY22 PAT Margins 3
Slide 25: Operating Leverage
Classification: Public Operating Leverage Strong operating leverage playing out despite addition in teams to support exponential future business growth Revenue per Employee & Total Employee count Growth in revenue per employee by 29.6% for Q3FY22 33.5 annualized for full year over FY21 29.5 This
Slide 26: Product Performance Trends
Classification: Public Product Performance Trends 26 Classification: Public
Slide 27: CASA and Debit Cards
Classification: Public CASA and Debit Cards A high margin-high growth product now showing robust annuity income through subscription renewal Accounts Opened Subscription Revenue (in ₹ cr) 50 16 13.5 16.7 14 15.0 40 (in lacs) 11.3 12 39.2 12.1 11.1 30 10 8 8.4 8.4 7.9 20 5.9 7.7 25.7 6 6.2 4 3.1 10 1
Slide 28: Cash Management Services
Classification: Public Cash Management Services The cash-in product in the ecosystem continues to show massive traction Throughput (in ₹ cr) Revenue (in ₹ cr) Take Rate 6,074 14.3 0.29% 0.28% 5,389 12.9 13.0 0.27% 11.4 0.24% 0.25% 0.24% 0.24% 4,510 4,558 10.3 3,830 2,622 6.3 866 2.5 Q1FY21 Q2FY21 Q3
Slide 29: Micro-ATM & AEPS
Classification: Public Micro-ATM & AEPS A high margin-moderate take rate product where the one-time income implies first mover advantage Throughput (in ₹ cr) Revenue (in ₹ cr) Transaction Take Rates 15,203 47.8 14,308 14,655 14,356 44.4 45.5 42.5 46.2 43.3 46.8 13,753 0.34% 12,923 13,068 0.33% 0.33%
Slide 30: Remittance
Classification: Public Remittance A low margin-high take rate product that attracts more customers into Fino’s ecosystem Throughput Revenue (in ₹ cr) Take Rate (in ₹ cr) 105.9 0.89% 0.88% 12,236 0.85% 0.86% 0.86% 0.87% 0.87% 84.3 86.0 81.9 9,426 9,826 9,449 7,412 63.9 6,391 54.9 3,543 30.2 Q1FY21 Q2
Slide 31: Core Technology and Digital Strategy
Classification: Public Core Technology and Digital Strategy 31 Classification: Public
Slide 32: Core Technology Strengths
Classification: Public Core Technology Strengths A healthy balance of in-house developments as well as best-in-class tech developed with partners Video KYC RPA PTA Chatbot Implemented seamless Implemented with partner; Custom transaction system Integrated merchant and merchant on-boarding developmen
Slide 33: Customer Engagement Initiatives
Classification: Public Customer Engagement Initiatives Campaign strategy that is focused more on the value proposition than freebies 33 Classification: Public
Slide 34: Our Digital Footprint
Classification: Public Our Digital Footprint Omni channel presences on the digital landscape increases our ability to outreach Instagram 7,690 followers Facebook 1,45,773 Followers Merchant 61,700+ leads sourced in the Q3FY22 LinkedIn 70,583 followers YouTube 47,552 subscribers Twitter 5031 follower
Slide 35: Digital Overlay Strategy
Classification: Public Digital Overlay Strategy A digital overlay on the physical model will add robustness to resilience Increasingly younger customer profile Favorable Demographics A millennial and Gen Z customer profile to use more digital platforms on long term basis Immense potential of online
Slide 36: ESG, Board and Management Team
Classification: Public ESG, Board and Management Team 36 Classification: Public
Slide 37: Positive Impact on Environment
Classification: Public Positive Impact on Environment Fino’s new age banking model is bringing down emissions and carbon footprints significantly Innovation in the Physical Ecosystem Branchless banking Handheld ATM devices Local cash for local use Neighbourhood banking Fino operates through very low
Slide 38: Well Governed Board of Directors
Classification: Public Well Governed Board of Directors Board comprising reputed professionals across different sectors Experienced Board of Directors… Co-founder of Fino and has been Served on SEBI committee on Experience in investment management associated with Fino Paytech1 corporate govern
Slide 39: Founder's Passion: The Team
Classification: Public Founder’s Passion: The Team Committed and professional management team Joined Fino in 2018 Joined Fino in 2017 Joined Fino in 2017 Qualified chartered accountant from the Served as a Major in the Indian Army Previously worked at BPL Mobile ICAI for 11 years Communi
Slide 40: Thank You
Classification: Public Thank You 40 Classification: Public
Slide 41: Annexure: Understanding Fino's Products
Classification: Public Annexure Understanding Fino’s Products Classification: Public
Slide 42: Current and Savings Account (1/2)
Classification: Public Current and Savings Account (1/2) Defining the problem statement, customer segment, potential and market size opportunity Use Case: A bank branch in tier 3 and below city is generally very crowded and is far away. It is also open during limited banking hours on weekdays. Throu
Slide 43: Current and Savings Account (2/2)
Classification: Public Current and Savings Account (2/2) Understanding the process flow of an account opening Fino Merchant Portal 2 Revenue source Subscription Fee Merchant charged to Customer 1 3 1 Customer approaches a merchant for account opening Customer 2 Merchant seeks various customer detail
Slide 44: Cash Management Services (1/2)
Classification: Public Cash Management Services (1/2) Defining the problem statement, customer segment, potential and Fino’s business value Use Case: Companies which collect cash from their customers need to deposit the same at a bank branch for money in the account. They do the same at a nearest Fi
Slide 45: Cash Management Services (2/2)
Classification: Public Cash Management Services (2/2) Understanding the process flow of a CMS transaction 3 Revenue source Merchant Account with 2 Fino Bank Fee Income from B2B partners Customer’s bank account Merchant 1 1 Delivery agent/ collection agent/ customer visits merchant point with cash th
Slide 46: Micro-ATM (1/2)
Classification: Public Micro-ATM (1/2) Defining problem statement, customer segment, potential and Fino’s business volume and value Use Case: Beyond the metro and tier 1 cities, ATM penetration is low. Customers have to travel a distance to withdraw cash. The genesis of micro-ATM is to facilitate co
Slide 47: Micro ATM (2/2)
Classification: Public Micro ATM (2/2) Understanding the process flow of an MATM transaction 3 Merchant Account with 2 Fino Bank Customer’s bank 4 account Merchant 1 1 Customer shares his debit card to the merchant 5 Merchant inserts the card in his/ her micro-ATM handheld device – 2 device is conne
Slide 48: AEPS (1/2)
Classification: Public AEPS (1/2) Defining problem statement, customer segment, potential, market size and Fino’s business value Use Case: Customers often don’t carry their ATM cards with them. Many at the bottom of the pyramid may not even have an ATM card. Most ATM kiosks will not be suitable for
Slide 49: AEPS (2/2)
Classification: Public AEPS (2/2) Understanding the process flow of an AEPS transaction 3 Merchant Account with 2 Fino Bank Customer’s bank 4 account Merchant 1 1 Customer gives his fingerprint on bio-authentication device of the merchant 5 2 The device is connected to network and also to the mercha
Slide 50: Remittance (1/2)
Classification: Public Remittance (1/2) Defining problem statement, customer segment, potential, market size and Fino’s business value Use Case: Customers having cash with them can visit a merchant point to transfer the same to a bank account on the beneficiary side. Remittance is essentially a cash
Slide 51: Remittance (2/2)
Classification: Public Remittance (2/2) Understanding the process flow of a remittance transaction 3 Merchant Credit in Account with beneficiary 2 Fino Bank bank account Merchant 1 Customer pays cash to the merchant for transfer to beneficiary account – separate charges for transaction is also paid
Slide 52: Open Banking Platform (1/2)
Classification: Public Open Banking Platform (1/2) Defining the problem statement, customer segment, potential and market size opportunity Use Case: Fintech players offering various payment products require a bank at the back-end to process a transaction. Being a bank, Fino can offer its technology
Slide 53: Open Banking Platform (2/2)
Classification: Public Open Banking Platform (2/2) Understanding the process flow of a remittance transaction 1 2 3 Customer of Merchant of Fino’s Open Banking Open Banking Open Banking Technology partner partner partner Platform 1 Customers visit the merchant points of the Open Banking partner (API