Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Investor Presentation (December 2022)
87 slides from Au Small Finance Bank's investor presentation, Dec 7, 2022
Slide 1: Exchange submission letter
Ref. No.: AUSFB/SEC/2022-23/424 Date: 07th December, 2022 To, National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai 400051, Mumbai 400001, Maharashtra. Maharashtra. NSE Symbol: AUBANK Scrip
Slide 2: AU Insights: Secured Business Loans | Commercial Banking
AU INSIGHTS Secured Business Loans | Commercial Banking 7th December, 2022
Slide 3: In this Presentation
In this 1 SECURED BUSINESS LOANS Presentation 2 COMMERCIAL BANKING Here's what we'll cover: 3 Q&A
Slide 4: Building a robust foundation to execute our strategy
Building a robust foundation to execute our strategy 01 02 03 04 05 06 07 08 09 10 TREASURY, SECURED MERCHANT FINANCIAL & BRANCH HOUSING COMMERCIAL DIGITAL CREDIT DCM & WHEELS BUSINESS SOLUTION DIGITAL BANKING LOANS BANKING BANKING CARD WHOLESALE LOANS GROUP INCLUSION LIABILITY 10 Business Groups (S
Slide 5: Secured Business Loans
SECURED BUSINESS LOANS AU INSIGHTS
Slide 6: Secured Business Loans
Secured Business Loans Low operating Expenses - High Margins Business Model & Good Business Knowhow Lack Formal Documentation - Capacity to Pay Collateral - various types of Rural & Semi-urban In-house Local Manpower - Local Nuances Physical Interaction – Resi & Business Place MICRO Enterprises - Re
Slide 7: MSME - The Heartbeat of the Indian Economy
MSME - The Heartbeat of the Indian Economy Scale of Business Major Events 0.52% - Small 0.01% - Medium 2006 MSME Development Act GDP Exports 2016 Demonetisation Contribution of 50% share in the total about 30% in the exports of India 2016 UPI total GDP of India 99 o .4 7 r % - Mic 2016 Startup India
Slide 8: INDIA Story
INDIA Story Growth Drivers Big headroom for growth 215% 204% France China Young Financial 163% Population of Rapid literacy 150% UK India Urbanization USA 73% Government Formalization Entrepreneurship South Africa 56% Initiatives of MSMEs Culture India Total Credit to GDP Ratio India has one of the
Slide 9: Industry Outlook & Opportunity
Industry Outlook & Opportunity Existing States No. of Micro MSME Big Opportunity in MSME Lending State (in lakhs) Maharashtra 47.6 In India, ~20% of the loans required by MSMEs Gujarat 32.7 are met by the formal sector, 40% by the informal HP Rajasthan 26.7 sector and there is still a 40% credit gap
Slide 10: SBL Business Model - Based on First Principles
SBL Business Model - Based on First Principles WHO IS OUR CUSTOMER? Small Business Lack of Formal Limited Access Limited Limited banking Actual Set up Documentation to Credit Resources exposure Cashflow Assessment: Our Core Competence What we offer Productive End Use Loan Facility Business Expansion
Slide 11: SBU Architecture
SBU Architecture An Epitome of Excellent Teamwork! SBL Support Functions Building Blocks Human Resources Marketing Sales Sales& Credit Distribution Credit Legal Technical Operation Collection Risk IT Admin Business Analytics and Strategy Finance Product Management & Communication 10
Slide 12: SBL Sales & Product Structure
SBL Sales & Product Structure Average Vintage of Senior HEAD OF SBL Sales Team More than National Business National Business National Product National Business 6 Yrs Manager Manager 1 Manager 2 Manager Bancassurance Lead Alternative Regional Business Zonal Business Regional Business Product Business
Slide 13: AU SBL Snapshot
AU SBL Snapshot Presence In Average Average Team Low LTV India Tenure Ticket Size Strength 9 States 8.5 Years Rs. 9.92 Lac 6,600+ 46% 2 UTs Active Loan Average EMI NTB Self Occupied Gross NPA Count Amount Acquisition Properties 2,08,529 ₹ 16,870 75% 85% 2.69% 12
Slide 14: Book Highlights
Book Highlights CAGR - 28% 17,471 Cr 16,524 Cr SBL Book 14,357 Cr 11,289 Cr 7,868 Cr 5,171 Cr 3,301 Cr 2,214 Cr 1,373 Cr 265 Cr 561 Cr 908 Cr Mar '12 Mar '13 Mar '14 Mar '15 Mar '16 Mar '17 Mar '18 Mar '19 Mar '20 Mar '21 Mar '22 Sep '22 ROI Wise Distribution (Sept’22) Ticket Size Wise Distribution
Slide 15: Book Highlights
Book Highlights SBL PRESENCE 9 STATES + 2 UTs 450+ Branches 1.68 lakh Customers CORE 76% NTB 75% Chhattisgarh Haryana Punjab Haryana (2% - 397 Cr) (2% - 332 Cr) (0.9% - 30 Cr) (1% - 43 Cr) Punjab HP (1% - 98Cr) Chhattisgarh (4% - 707 Cr) Maharashtra (6% - 193 Cr) (0.1% - 9 Cr) Maharashtra (7% - 1,13
Slide 16: Book Highlights
Book Highlights Manufacturer & Apparels & Top 10 Segments Service Providers Accessories Manufacturer / Service Provider 13% Food & Agro Processing Readymade Garments Building & Civil Suiting, Shirting & FMCG Retail 11% Contractors Textiles Industrial & Medical Saree Shops Equipments Fancy Stores App
Slide 17: Sourcing Mix (H1 FY 2022-23)
Sourcing Mix (H1 FY 2022-23) Along with strong direct sourcing we are expanding our sourcing funnel with focus on digital means 1% BO/BC 100% Lead Referral 1.50% Fulfilment by In- Digital Channel Multiple channels for house team lead referral 3.50% Cross Sell 21% AU Connect | Value 100% 7562 Connect
Slide 18: SBL Credit, Legal & Technical Structure
SBL Credit, Legal & Technical Structure NATIONAL CREDIT MANAGER Zonal Credit Credit National Legal National Legal National Technical National Technical Lead LeadDigital Digital Managers Managers Manager Manager Manager BusinessSolution Business Solution Regional Credit Regional Legal Regional Techni
Slide 19: Key Enablers
Key Enablers To have a sustainable business model, it is important to have a deep understanding of the business & to assess Risk Customer each factor in detail. Management Assessment “Attention to Details” It is also one of our most prominent Dharma. Collateral Collection Assessment Management 18
Slide 20: Credit Risk Management
Credit Risk Management “Understanding the Customer” over “Knowing the Customer” has been the key Differentiator in our journey. Extensive Detailing through In-House Physical Interaction with the borrower Legal & technical check Deep understanding of Business Robust Reference Check Model & Income str
Slide 21: Customer Assessment
Customer Assessment Most of our customers don’t have formal documents to verify Income. That is where our expertise lies. HOW WE EVALUATE OUR CUSTOMERS Customer Profile based underwriting CIBIL Score Family Structure Income & Expenses Experience Business FMCG Retail Footfall Sales & Margins Vintage
Slide 22: Customer Assessment
Customer Assessment TransUnion CIBIL® Score Wise Customer Spread CIBIL Score Bucket Customers SBL Book (FY 2022-23 Business) New to Credit (NTC) 23% 16% 700 & Above 62% 68% Existing to 650 to 699 11% 12% Credit (ETC) 600 to 649 3% 3% Less than 600 1% 1% Score Card Implementation To enhance risk moni
Slide 23: Collateral Assessment
Collateral Assessment Self Occupied Self Occupied Mix Use Self Occupied Rented Residential Property Commercial Property Property Industrial Property Commercial Property 85% 75% 98% 100% 46% 100% Self Occupied Residential Constructed In-house Technical Average LTV Dual Legal Check Properties Collater
Slide 24: Collection Management
Collection Management Over the decade, we have nurtured and built a robust team of highly-motivated individuals who take the full ownership of collection Dialogue with the Customer Real-time Tracking Support from Sales & Credit team Analytics & Strategy Around 70% of legally initiated Dedicated MIS
Slide 25: Pandemic Period - Impact
Pandemic Period - Impact Due to the revenue impact during the pandemic & restricted growth post-pandemic, it is expected that some of the profiles might take a comparatively longer recovery period. Considering this, we had cautiously monitored exposure over certain such profiles, such as Hospitality
Slide 26: Post Pandemic - Strategy
Post Pandemic - Strategy In the last 3 qtrs., as the economy has been moving towards stability, the small businesses with a requirement of working capital of up to ₹ 15 lacs were still in the recovery phase & are expected to have an incline in the new fiscal year. We continue to have a bullish outlo
Slide 27: Way Forward
Way Forward We intend to penetrate deeper into the existing geographies with go-to- Penetration market in low to mid-ticket segments. Around 15,000 local city based connectors Enhance Distribution Focus on Digital business models to enhance the business from these Digital Channels sources. Initializ
Slide 28: Summary
Summary Evolving MSME Industry resulting in growing opportunities Analysis of Purpose of loan & End Use Verification Deep understanding of Rural & Semi- Urban Businesses Collection management - Engagement, Counselling, Resolution Deep understanding of City & State Collateral Digital & Branch Banking
Slide 29: Commercial Banking
COMMERCIAL BANKING AU INSIGHTS
Slide 30: Commercial Banking – Business Segments
Commercial Banking – Business Segments Commercial Banking Business Banking Agri Banking NBFC Lending Real Estate Group TG: MSMEs engaged in TG: MSMEs engaged in TG: Small and Mid Size TG: Small and Mid Size Manufacturing, Trading, EPC Agri Value Chain NBFCs and HFCs Developers in select T1 and Servi
Slide 31: Commercial Banking – SBU Structure
Commercial Banking – SBU Structure Commercial Banking Human Head of Commercial Business Resources Head of Credit Solutions Banking F&A Insurance Head of National Business Business National Credit National Credit Banking (BB) Manager REG Manager BB Manager REG Legal & Product & Collections Communicat
Slide 32: Commercial Banking – Growth Commenced at Bank Platform
Commercial Banking – Growth Commenced at Bank Platform Rs. in Crs 10,000 9,704 9.00% CAGR - 53% 8.00% 7,986 3,859 7,500 7.00% Working Capital 2,900 6.00% 55% Term Loan 4,957 5.00% 5,000 45% 4,346 4,289 3,012 4.00% 730 1,771 2,259 1,023 245 3.00% 2,673 637 302 2,500 1,139 33 2,513 2.00% 2,036 1,880 1
Slide 33: Commercial Banking – Trade a Bigger Opportunity
Commercial Banking – Trade a Bigger Opportunity Non-Fund Book Rs. in Crs Utilization Limit 5,000 4,119 4,000 3,360 3,000 2,686 2,239 1,931 2,000 1,169 1,015 1,000 687 365 16 33 159 0 Mar'18 Mar'19 Mar'20 Mar'21 Mar'22 Sep'22 32
Slide 34: Increasingly Self Funded Book - Scaling Up Liability Relationship
Increasingly Self Funded Book - Scaling Up Liability Relationship Deepening : Complete Banking and Investment Needs of Enterprise & Promoters Salary Mandates POS QR 256 470 4144 Balances Build up : Current Accounts Acquisition & CMS Solutioning Rs. in Crs CMS Customer Activations ACCOUNT EOP Active
Slide 35: Commercial Banking – Relationship Based Transactional Lending
Commercial Banking – Relationship Based Transactional Lending 360° Opportunities Growing Target Market Segment Aligned to Diversified Insurance Current Account Salary Mandate Corporate Credit Card Liability and Granular Franchise Loan Book Larger Pool of Holistic and Fee Income Complete Banking Tran
Slide 36: Commercial Banking – Profitable and Sustainable Book
Commercial Banking – Profitable and Sustainable Book Low Cost Of Acquisition Net Interest Margin (NIM) More Sourcing from Branch Banking + Working Capital Book Grows Organically with Enhancements Low Opex – Cost to Income ~35% Lower Credit Cost – GNPA of 0.48% Stress Tested During COVID Period Diver
Slide 37: India: Poised for Accelerated Growth
India: Poised for Accelerated Growth Policy Reforms Driving Growth PLI Schemes (Outlay in Rs.) Gati Shakti Yojana: - Rs. 100 Lakh Crs on Infrastructure in Drone 0.12k Cr next 8 years Aviation 0.12k Cr 100 PM Gati Shakti Cargo Terminals in next 3 years White Goods 6.28k Cr Logistics Cost/GDP % for In
Slide 38: Commercial Banking Opportunity – Size and scope
Commercial Banking Opportunity – Size and scope Gross Bank Credit in Rs.Lakh Cr as on Sept 2022 Constant Shift in Credit from PSB’s to Pvt Sector Banks Source: RBI 75% 14.84 3.72 50% 16.01 25% 74.2% 65.8% 54.8% 77.04 0% Mar '12 Mar '17 Mar '22 11.72 2.98 Year-on-Year Credit Growth Bank Credit 16.4%
Slide 39: Commercial Banking - Credit Framework
Commercial Banking - Credit Framework National Credit Managers Credit Operations Monitoring Central Regional Cluster Team Team Team Technical Legal Feedback Based Culture Localized Technical & Legal Support Retail Franchise - Ears on Ground 38
Slide 40: 360° Credit Assessment: On-Boarding Framework
360° Credit Assessment: On-Boarding Framework Promoters Vintage + Industry Experience Adherence to Regulatory Guidelines Committee Based Approval Adoption of Technology for Data Mechanism Management Business Analytics Analysis Profiling Customer Interaction through Approval Business Digital Platform
Slide 41: Commercial Banking - Housekeeping & Monitoring
Commercial Banking - Housekeeping & Monitoring Cluster Based Feedback Mechanism Identification of EWS Periodic Review Timely Exit of Weak Accounts OBJECTIVE Calendar Based Sectoral Analysis Enhanced Productivity Review Trust Building Knowledge Enhancement Relationship Deepening Regular Client Intera
Slide 42: Business Banking
Business Banking
Slide 43: What Is Business Banking?
What Is Business Banking? Raw Materials TL REQUEST CC/OD Capital Expenditure LC FUNDS Day to Day BG Expenses Borrower Business Banking PROVIDING CUSTOMIZED FACILITIES FOR EVERY NEED OF THE CUSTOMER Our Customers Manufacturers Service Providers EPC Traders 42
Slide 44: Business Banking - Organisation Structure
Business Banking - Organisation Structure BUSINESS BANKING Head of Business Product Management & National Credit Manager Banking Communications Operations Risk & Compliance National Business Regional Business Regional Credit Manager Manager Manager - Bancassurance Legal Technical Cluster Business Cl
Slide 45: Business Banking - Portfolio Details
Business Banking - Portfolio Details Gross Total Deposits Presence Avg. Ticket Working WIRR* Non-Fund GNPA Trade Income Advances Size Capital Book Book & Other Fee 13 States & Rs. 3,859 Crs ~Rs.3100 Crs Rs. 0.85 Cr. 70% 10.15% Rs. 2,355 Cr. 0.17% 1.7% 2 UTs Geographical Distribution Coverage of 275
Slide 46: Business Banking - Journey
Business Banking - Journey Gross Advances (Rs. in Crs) Non-Fund Based Book (Rs. in Crs) 4,000 3,859 2,500 2,355 1,996 2,900 2,000 3,000 1,500 2,000 1,771 1,000 847 1,023 1,000 557 730 500 302 159 16 0 0 Mar'18 Mar'19 Mar'20 Mar'21 Mar'22 Sep'22 Mar'18 Mar'19 Mar'20 Mar'21 Mar'22 Sep'22 Floating Rate
Slide 47: Business Banking - Portfolio Distribution
Business Banking - Portfolio Distribution Top Industries Granular Fund Based Portfolio % of Gross Advances Ticket Size Distribution EPC 14.62% Agri & Food Processing 10.37% 22% Food & Beverages 6.66% 26% Mining 4.82% Textiles 4.67% 15% Education 4.51% Metals 4.41% 37% Building Materials 4.4% 0% 5% 1
Slide 48: Business Banking – Strengths
Business Banking – Strengths Ability to source right from multiple channels and create a strong funnel A stable team, with 95% of the National & Regional leadership intact since inception Originator is the Collector - Satisfactory Portfolio Performance which got tested during COVID Ability to deepen
Slide 49: Business Banking – Credit Underwriting: Key Differentiators
Business Banking – Credit Underwriting: Key Differentiators STRONG TEAM BUILDING UNDERWRITING APPROACH Qualified Professionals Localised Decisioning – Faster Turnaround Credit on Ground – Decentralised Approach Comprehensive 360 Evaluation: Local Hiring – Avoiding Geographical & Cashflow & Sensitivi
Slide 50: Business Banking – Portfolio Quality and Monitoring
Business Banking – Portfolio Quality and Monitoring Asset Quality 100.00% 100% 6.00% End-Use 99.20% 99% 98.92% 5.00% Monitoring 98.48% 98.20% Continuous 98% 4.00% Cashflow Policy Routing Evolution 96.95% 3.00% 97% Portfolio 2.00% Monitoring 96% 3rd Party 1.00% High Value BG 95% 0.74% Audits & 0.75%
Slide 51: Agri Banking
Agri Banking
Slide 52: Agri Banking – Organisational Structure
Agri Banking – Organisational Structure Agri Banking Head of Agri Banking National Credit Manager Operations Risk & Compliance Regional Business Product Management & Regional Credit Manager Communications Manager Legal Technical National Business Cluster Business Cluster Credit Manager Manager Manag
Slide 53: Agri Banking – Product Offerings: Agri Value Chain
Agri Banking – Product Offerings: Agri Value Chain Aggregators, Input Producers/ Service Processors Distributors Suppliers Farmers Providers, Traders Seeds & Wholesalers, Traders & Manufacturing MEMBERS: Fertilizer Farmers Importers & FPO Units Dealers Exporters DEMAND: Working Capital | Term Loan (
Slide 54: Agri Banking - Portfolio Detail
Agri Banking - Portfolio Detail Gross Total Presence Avg. Ticket Working WIRR* Non-Fund GNPA Advances Deposits Size Capital Book Book 13 States & Rs. 3,012 Crs ~Rs. 475 Crs Rs. 0.98 Crs 60% 10.11% Rs. 291 Crs 0.74% 2 UT Geographical Distribution Ticket Size Distribution – Fund Based Coverage of 220
Slide 55: Agri Banking Journey
Agri Banking Journey Gross Advances (Rs. in Crs) 4,000 3,012 3,000 2,259 2,000 1,139 1,000 637 245 33 0 Mar '18 Mar '19 Mar '20 Mar '21 Mar '22 Sept '22 Floating Rate Book Linked to Repo FB Exposure - Rs. 3,515 Crs (78% utilized), NFB Limits – Rs. 530 Crs (55% utilized) Note: Data has been regrouped
Slide 56: Agri Banking Portfolio – Diversification in Agri & Allied Sectors
Agri Banking Portfolio – Diversification in Agri & Allied Sectors 1% 2% 3% 3% Food Processing Cold Storage 3% 17% 4% Agro Processing Oil Mill 5% Crop Cultivation Food Product Packaging Food & Vegetable 5% 14% Flour Mill Processing Dry Fruit Dairy Mfg 5% Processing Dal Mill Cattle Feed Mfg 6% 13% Ric
Slide 57: Agri Banking – Key Takeaways
Agri Banking – Key Takeaways Why Agri Banking? Agriculture Sector - 18.8% GVA Growth in Agri Allied sectors - Major Growth Drivers Globally 4th in Agriculture Production Government Schemes Driving CAPEX in Food Processing/Agri Infra Projects Opportunities across Value Chain – Farm to Fork Regulatory
Slide 58: Agri Banking – Credit Underwriting & Philosophy
Agri Banking – Credit Underwriting & Philosophy Team Strength & Expertise Localized and Seasoned Team Spread across Customer Agri-Clusters Vintage Agri Domain Expertise & Non- Hierarchical Approach Creditworthiness Assessment Commodity End-use Seasonality Monitoring & & Detailing Cyclical Risk Portf
Slide 59: Agri Banking – Portfolio Quality and Monitoring
Agri Banking – Portfolio Quality and Monitoring Asset Quality Portfolio Monitoring 100% 99.88% 5.00% 99% 98.96% 98.34% Dealing Seasonality Through Product 97.97% 98% 4.00% Offering (Peak/Lean Seasons) 97% 96.63% Monitoring of Agri Commodity Prices & 96% 95.72% 3.00% Climatic Conditions 95% 94% Macro
Slide 60: NBFC Lending
NBFC Lending eH i Se ee _. C)
Slide 61: NBFC Lending - Organisational Structure
NBFC Lending - Organisational Structure NBFC Lending Operations Risk & Compliance National Business National Credit Manager Manager Legal Product Relationship Sales Support Credit Managers Credit Support Managers CMS Team Internal Audit Flat Hierarchy Structure Enables Higher Productivity Per Person
Slide 62: NBFC Lending - Know How Methodology
NBFC Lending - Know How Methodology WHY HOW KEY TAKE AWAYS Transitioning from being NBFC Vast and Varied experience of the Early Lenders for many NBFCs Understood issues team Never the largest lender, exposure Field assessment along with cap on conservative levels Understanding and reach made it Fin
Slide 63: NBFC Lending - Portfolio Detail
NBFC Lending - Portfolio Detail 78% Exposure to Granular Book 90% of Book is Avg Ticket Size Average Residual NBFC in Secured #146 NBFCs Investment Grade ~Rs.13 Crs Tenure - ~21 months Lending Segmental Book OthersOthers Gross Advances Gold Loan 4% 4% Credit Rating Percentage Fintech 2% (Rs. in Crs)
Slide 64: NBFC Lending - Portfolio Journey
NBFC Lending - Portfolio Journey Gross Advances (Rs. in Crs) 2,513 2,500 2,036 2,000 1,857 1,880 1,530 1,500 1,426 1,000 500 0 Mar '18 Mar '19 Mar '20 Mar '21 Mar '22 Sep '22 Portfolio IRR at 10.8%, Increased Floating Rate Book Linked to Repo 90 New Customers Added since Sep’18 by 110 bps over Mar’2
Slide 65: NBFC Lending - Cross Sell Opportunity: Strong & Steady
NBFC Lending - Cross Sell Opportunity: Strong & Steady CMS Mandates Self Funded Book Product Nos. Product EOP (In Crs) + CMS Mandates 88 Current Account (CA)* ~300 Saving Account (SA) ~35 Term Deposit (TD) ~1240 Salary Accounts Total ~1575 Product Nos. Salary Mandates 65 * Including CCOD accounts cr
Slide 66: NBFC Lending - Way Forward
NBFC Lending - Way Forward Sufficient Head Room for Growth – Internal and External factors Focus on Segmental Approach Deeper Penetration through Transaction Banking – Payment and Collection Solution Cross Sell – Insurance, TD, Salary Mandate, Corporate Cards, Personal Banking Co-lending and BC Arra
Slide 67: Key Pillars of NBFC Lending Credit Underwriting
Key Pillars of NBFC Lending Credit Underwriting Capital Adequacy Leverage Analysis Liquidity Assessment Portfolio Study Credibility of Promoters Profitability Breakdown Promoter’s Ability to Raise Runds Accounting Policies Financial Strength of Board Decoding B-Plan Performance Quality of Senior Man
Slide 68: NBFC Lending - Asset Quality
NBFC Lending - Asset Quality 100.00% 100.00% 99.87% 99.99% 100% 99.37% 98.74% 4% 99% 98% 97% 3% 96% 95% 2% 94% 93% 1% 92% 0.66% 5 0.49% 5 91% 5 0.13% 0.00% 0.00% 0.01% 0% 0 90% Mar '18 Mar '19 Mar '20 Mar '21 Mar '22 Sep '22 Current Book % GNPA Negligible Credit Cost in Proportion to Cumulative Disb
Slide 69: Real Estate Group
Real Estate Group
Slide 70: Real Estate Contribution and Outlook
Real Estate Contribution and Outlook Employment Generator Contribution to GDP FDI Inflow Direct & Indirect Impact nd rd 2 After agriculture 7% In 2021 3 $50.8 Bn in 2000-2021 270 Allied industries Source: Real Estate Industry report – Aug 2022 by IBEF Source: MoHUA Secretary Durga Shanker Mishra at
Slide 71: Real Estate Group - Organisational Structure
Real Estate Group - Organisational Structure SALES CREDIT National Business National Credit Manager Manager Centralized Localised Regional Business Zonal Credit Lead Project Manager Manager Monitoring Operations Monitoring Technical Legal Relationship Regional Credit Unit Manager Manager Manager Rel
Slide 72: REG - Portfolio Trend
REG - Portfolio Trend Gross Advances Movement (Rs. in Crs) 1,000 953 830 808 801 791 750 661 620 621 CF 492 LAP 500 250 180 0 Mar '14 Mar '15 Mar '16 Mar '17 Mar '18 Mar '19 Mar '20 Mar '21 Mar '22 Sep '22 Portfolio Builder LAP CF Note: Data has been regrouped and re-classified as per current report
Slide 73: REG - Portfolio Movement
REG - Portfolio Movement Opening Book Closing Book 1,000 750 500 Closing Book Movement (in Rs. Crs) 620 808 808 801 801 830 830 621 621 791 791 953 250 0 March '18 March '19 March '20 March '21 March '22 Sept '22 Disbursement (D) 481 439 406 294 852 632 Repayments (R) 294 447 377 503 683 470 R/D 61%
Slide 74: REG - Geographical Distribution
REG - Geographical Distribution March 2018 Septemeber 2022 Delhi NCR 1% Others 2% Bengaluru 1% Delhi NCR 2% Pune 3% Mumbai 8% Surat 8% Hyderabad 9% Ahmedabad 5% Surat Mumbai 35% 11% Ahmedabad 11% Rajasthan 75% Rajasthan 29% Rajasthan’s concentration reduced from 75% to 29% Penetration in Tier-1 citi
Slide 75: REG - Portfolio Features
REG - Portfolio Features Affordable Top 10 Customer Synergy with Liability: Housing Projects Account EOP in Crs 22% Exposure Current Accounts including RERA A/cs* ~75 42% (18 Projects) Saving Accounts ~5 Term Deposits ~35 Total Liability Book ~115 Active RERA Average Loan (*Includes credit balance i
Slide 76: REG - Way Forward
REG - Way Forward Cashflow Controlled Lending Locations Focus - Tier 1 Cities Average Ticket Size <15 Crs (RERA Projects) Priority - Affordable Housing Projects 75
Slide 77: REG - Underwriting Practices and Philosophy
REG - Underwriting Practices and Philosophy Philosophy Control over No Dependency Towards Asset Concentration of Significant Lender Financial Closure Project on Funding Creation Borrower to Borrower of Project Cashflows Practices Credit Based Pro Active & Continuous Direct Liaising with Construction
Slide 78: REG - Credit Monitoring
REG - Credit Monitoring Project Monitoring 1 2 3 4 5 Construction DCCO RERA A/Cs Early Annual Monitoring Monitoring Monitoring Warning Review Track Check Track RERA Track Risk Construction Portfolio Timelines Cashflows Identification Progress Health 01 77
Slide 79: REG - Portfolio Health & Asset Quality
REG - Portfolio Health & Asset Quality Asset Quality CURRENT BOOK % GNPA 100% 96.77% 97.02% 96.92% 11% 93.53% 90.15% 83.41% 9% 75% 7% 50% 4.87% 5% 2.14% 2.48% 2.24% 1.27% 1.85% 3% 25% 1% 0% Mar '18 Mar '19 Mar '20 Mar '21 Mar '22 Sep '22 96.92% Book – Current 100% Gross NPAs – Provided for 90+ DPD –
Slide 80: Transaction Banking
Transaction Banking eee
Slide 81: Transaction Banking – Enabling Holistic Banking
Transaction Banking – Enabling Holistic Banking Synergy with Asset Maximizing wallet Higher RoA Businesses share Leverage Lending Relationships for Cross- Capture More Banking Business Wallet Maximize Income & Improve ROA sell Share – CASA Balances, Trade & Fx Low-cost Balances & NFB Fee Income Sole
Slide 82: Transaction Banking – Product Verticals
Transaction Banking – Product Verticals I. Cash Management Services Holistic Integrated Collection and Payment Solutions (4X increase in CMS customers since Mar 2021) CMS Cross Sell through Sales Channels and Continuous Product Additions and Upgrades Advanced Cash Management Solutions capability – A
Slide 83: Transaction Banking – Key Priorities
Transaction Banking – Key Priorities 1 BUSINESS SCALE UP CASA Scale up – Operative accounts through CMS Cross-Sell Leverage branch network DIGITAL APPLICATIONS Superior Digital Channels Upgraded Corp Net Banking Merchant App for SMEs 3 Specialist CMS Sales Digital Trade Portal Build & Scale Up New B
Slide 84: Commercial Banking – Digitization & Digital Adoption
Commercial Banking – Digitization & Digital Adoption Digitalization Of Internal Process Digital Channels For Superior Customer Experience Advanced Corporate Mobile app for Digital Trade Portal Loan Origination Digital Documents Transaction Process Net Banking with merchants and for facilitating Syst
Slide 85: Key Takeaways for Commercial Banking
Key Takeaways for Commercial Banking High Synergy with Branch Banking Franchise & Lower Cost of Customer Acquisition Continued Focus on Opex, Asset Quality, Holistic Banking & Fee Based Income for ROA Accretion Significant Opportunities to Grow Each Business with Growth in Economy Balance Sheet-base
Slide 86: 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 87: Thank You!
BADLAAV HUMSE HAI For Investor queries contact (details in QR Code): Prince Tiwari | Aseem Pant Thank You! Email: investorrelations@aubank.in
AU Small Finance Bank — Investor Presentation (December 2022) on 6ix