Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Q1 FY22 Earnings Presentation
54 slides from Edelweiss Financial Services's earnings presentation, Aug 5, 2021
Slide 1: Exchange filing cover letter
EW/Sec/2021/143 August 5, 2021 BSE Limited National Stock Exchange of India Limited P J Towers, Exchange Plaza, Dalal Street, Fort, Bandra Kurla Complex, Bandra (E), Mumbai - 400 001. Mumbai - 400 051. Scrip Code:- 532922 Symbol:- EDELWEISS Dear Sir/ Madam, Sub: Investor Presentation • Please find e
Slide 2: Edelweiss Financial Services Limited Q1FY22 Earnings Update
US $ version Edelweiss Financial Services Limited Q1FY22 Earnings Update
Slide 3: Contents
Contents 1 Q1FY22 Overview & Highlights 3 2 Update on Key Priorities 11 3 Balance Sheet Update 18 4 Business Update 25 5 Governance and Sustainability 47 2
Slide 4: Q1FY22 Overview & Highlights
Q1FY22 Overview & Highlights
Slide 5: Edelweiss at a Glance – Q1FY22
Edelweiss at a Glance – Q1FY22 Net Worth Ex-Insurance PAT $1,145 Mn $8 Mn Liquidity Customer Assets BVPS $740 Mn $40,661 Mn $1 (FV $0.01) 4
Slide 6: We Are A Diversified Company Across Nine Businesses
We Are A Diversified Company Across Nine Businesses Edelweiss Financial Services Ltd (EFSL) Housing Mutual Life General Insurance NBFC Alternatives ARC Wealth Mgt Finance Fund Insurance Insurance Broking • ECL • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edelweiss • Edel
Slide 7: Earnings Across Businesses
Earnings Across Businesses Business wise PAT ($ Mn) Q1FY22 NBFC (1) Housing Finance (2) Mutual Fund 1 Alternatives Asset Management 1 Asset Reconstruction 7 Insurance Broking - Wealth Management 7 BMU & Corporate 2 Life Insurance (4) General Insurance (3) Total Business PAT 8 Less : External shareho
Slide 8: Strong Customer Franchise Growth Despite Challenging Times
Strong Customer Franchise Growth Despite Challenging Times Total No of Customers (in Mn) Customer Assets ($ Mn) 2.2 40,661 30,022 1.5 25,610 1.3 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 Expect to add another ~1-1.5 Mn customers in FY22 7
Slide 9: Strategic Stake Sale in Insurance Broking Business
Strategic Stake Sale in Insurance Broking Business • Edelweiss set up the Insurance broking business in 2005 and over the years it has grown to be one of the leading composite insurance brokers in the country • In line with our stated strategy of creating and unlocking value for our stakeholders and
Slide 10: Q1FY22 Business Highlights (1)
Q1FY22 Business Highlights (1) • Signed co-lending agreement with Central Bank of India in MSME segment NBFC • Retail Collection efficiency increased to 91% in June’21 from market revival after Covid wave 2 • Forged co-lending partnership with a leading private sector bank Housing Finance • Focused
Slide 11: Q1FY22 Business Highlights (2)
Q1FY22 Business Highlights (2) • Robust recoveries of ~$100 Mn in Q1FY22 from 74 borrowers; ~22% of these were Asset from Retail ARC portfolio Reconstruction • Acquired assets worth ~$282 Mn with EARC’s deployment at ~$51 Mn • Gross premium grew at 31% YoY Life Insurance • Active client base has inc
Slide 12: Update on Key Priorities
Update on Key Priorities oO Edelweiss Ideas create, values protect
Slide 13: Key Priorities For Next 18 Months
Key Priorities For Next 18 Months 1 Demerger and listing of Edelweiss Wealth Management 2 Reduce wholesale credit assets 3 Scale up our Asset Management and Insurance businesses 12
Slide 14: Demerger And Listing of Edelweiss Wealth Management
1 Demerger And Listing of Edelweiss Wealth Management Phase I • PAG’s strategic investment in EWM Phase II • Segregation of EWM business after regulatory approvals Oct-Dec’21 • Filing of regulatory applications for demerger and listing Phase III • Approval from NCLT Sep-Dec’22 • EWM listing 13
Slide 15: Reduce Wholesale Credit Assets
2 Reduce Wholesale Credit Assets ECLF Wholesale Loan Assets ($ Mn) 2,148 1,599 1,468 Q1FY20 Q1FY21 Q1FY22 Wholesale loan assets to reduce to ~$800 Mn by March’23 14
Slide 16: Successful Workouts of Over $250 Mn In Last 15 Months
2 Successful Workouts of Over $250 Mn In Last 15 Months Change of Developer Strengthening the Developer group through addition or replacement of Developers Projects Ensuring project progress by way of last mile financing and sales support for renewed Streamlining buyer interest Cash flow Improved ca
Slide 17: Scale Up Our Asset Management and Insurance Businesses
3 Scale Up Our Asset Management and Insurance Businesses Mutual Fund AUM ($ Mn) Alternatives AUM ($ Mn) 4,035 8,339 3,147 2,596 3,955 2,287 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 LI – Gross Premium ($ Mn) GI – Gross Premium ($ Mn) 29 8 22 22 5 3 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 16
Slide 18: Enabled By Digital Platform
3 Enabled By Digital Platform Asset Management Edelweissmf.com - New and transformed mutual fund website providing industry’s shortest account creation flow, rich product information and valued insights to investors Continued digital efforts have led to digital transactions in MF at 96% in Q1FY22 SW
Slide 19: Balance Sheet Update
Balance Sheet Update oO Edelweiss Ideas create, values protect
Slide 20: Strong Capitalization Across Businesses And Robust Liquidity
Strong Capitalization Across Businesses And Robust Liquidity % of Borrowings Available Liquidity ($ Mn) Businesses Metric Value 22% 21% NBFC Capital Adequacy 25.4% 15% Housing Finance Capital Adequacy 25.5% Asset Reconstruction Capital Adequacy 36.0% Life Insurance Solvency Ratio 184% Q1FY20 Q1FY21
Slide 21: Continue to Reduce Our Borrowings
Continue to Reduce Our Borrowings Borrowings ($ Mn) D/E (Excl Treasury Assets) 5,496 3.7 3.2 4,088 3,485 2.2 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 20
Slide 22: Borrowing Profile
Borrowing Profile Borrowing Profile by Instruments Borrowing Profile by Source 2% 20% 31% 9% 40% 67% 31% Loans & OD NCDs CPs Banks Retail MF PF, Insurance & FIs $3,485 Mn $ 3,485 Mn 21
Slide 23: Assets in each Tenor Range Adequately Cover Liabilities
Assets in each Tenor Range Adequately Cover Liabilities ($ Mn) Assets Liabilities Gap Upto 1 year 2,233 2,038 195 1-3 years 1,836 1,399 437 3 years+ 1,782 1,675 108 22
Slide 24: Credit Assets Remain Conservatively Provided
Credit Assets Remain Conservatively Provided Balance Sheet Provisions IRAC Provisions IndAS Provisions ($ Mn) 89 91 75 59 20 22 Q1FY20 Q1FY21 Q1FY22 We have consistently provided higher than IRAC norms 23
Slide 25: Cash Flow Plan
Cash Flow Plan Particulars ($ Mn) Jul’21-Dec’21 Jan’22-Jun’22 Opening Available Liquidity (A) 740 807 Inflows Expected Inflows 713 699 Fresh Borrowings 471 404 Total Inflows (B) 1,184 1,103 Outflows Repayments 847 847 Disbursements 269 336 Total Outflows (C) 1,116 1,184 Closing Available Liquidity (
Slide 26: Business Update
Business Update oO Edelweiss Ideas create, values protect
Slide 27: NBFC: Business Performance Snapshot
NBFC NBFC: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Signed co-lending agreement in MSME book with Equity ($ Mn) 515 Central Bank of India • Active discussions ongoing with 2 other banks for partnerships Credit Assets ($ Mn) 1,985 • Retail Collection efficiency at 91% in Jun
Slide 28: NBFC: Financial Performance Snapshot
NBFC NBFC: Financial Performance Snapshot $ Mn Q1FY22 AUM 1,292 Loan book 1,213 Equity 515 Gross Revenue 59 Net Revenue 3 Opex 12 Credit Costs (2) Profit After Tax (1) Gross Stage 3 Loans 49 Net Stage 3 Loans 41 Total Provision Cover 134.9% Capital Adequacy 25.4% 27
Slide 29: Housing Finance: Business Performance Snapshot
Housing Finance Housing Finance: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Forged co-lending partnership with a leading private bank Equity ($ Mn) 101 • Launched in house Digital Lending Platform for improved customer experience and efficiency Credit Assets ($ Mn) 572 • Caut
Slide 30: Housing Finance: Financial Performance Snapshot
Housing Finance Housing Finance: Financial Performance Snapshot $ Mn Q1FY22 AUM 547 Loan Book 461 Equity 101 Gross Revenue 16 Net Revenue 4 Opex 4 Credit Costs 3 Profit After Tax (2) Gross Stage 3 Loans 17 Net Stage 3 Loans 15 Total Provision Cover 48.7% Capital Adequacy 25.5% 29
Slide 31: Mutual Fund: Business Performance Snapshot
Mutual Fund Mutual Fund: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Amongst fastest growing MF with ranking in the top 15 in Equity ($ Mn) 22 Q1FY22 • Net equity inflows of ~$242 Mn and net total MF inflows AUM ($ Mn) ~8,339 more than ~$673 Mn in Q1FY22 Net New Money ~740 • E
Slide 32: Mutual Fund: Financial Performance Snapshot
Mutual Fund Mutual Fund: Financial Performance Snapshot $ Mn Q1FY22 AUM 8,339 Equity 22 Net Revenues 5 Operating costs 4 Profit before tax 1 Profit after tax 1 31
Slide 33: Consistent Expansion of Investor and Partner Reach
Mutual Fund Consistent Expansion of Investor and Partner Reach Mutual Fund Equity Gross Sales ($ Mn) Mutual Fund SIP AUM ($ Mn) 18 354 8 8 94 79 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 Active Folios (in 000’s) Active Quarterly MFDs (#) 700 4,529 360 2,387 2,338 240 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY
Slide 34: Alternatives: Business Performance Snapshot
Alternatives Alternatives: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Ranked no. 3 in Asia in terms of AUM raised in last 5 years by Preqin Equity ($ Mn) 22 • Strong deployment momentum with $108 Mn deployed in Q1FY22 AUM ($ Mn) ~4,035 • Adopting Sustainable Finance Disclosur
Slide 35: Alternatives: Financial Performance Snapshot
Alternatives Alternatives: Financial Performance Snapshot $ Mn Q1FY22 AUM 4,035 Equity 22 Net Revenues 8 Operating costs 7 Profit before tax 1 Profit after tax 1 34
Slide 36: Robust Growth In Alternative Assets
Alternatives Robust Growth In Alternative Assets Alternatives AUM ($ Mn) Alternatives AUM – Strategy wise 4,035 11% 3,147 38% 19% 2,596 $4,035 Mn 32% Distressed Credit Fund Structured Debt Fund Real Estate Credit Fund Infrastructure Fund Q1FY20 Q1FY21 Q1FY22 35
Slide 37: Asset Reconstruction: Business Performance Snapshot
ARC Asset Reconstruction: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Robust recoveries of ~$100 Mn in Q1FY22 from 74 Equity ($ Mn) 306 borrowers; ~22% of these were from Retail ARC portfolio AUM ($ Mn) ~5,690 • Acquired assets worth ~$282 Mn with EARC’s deployment at $51 Mn R
Slide 38: Asset Reconstruction: Financial Performance Snapshot
ARC Asset Reconstruction: Financial Performance Snapshot $ Mn Q1FY22 AUM 5,690 Capital Employed 713 Equity 306 Gross Revenue 27 Net Revenue 12 Operating costs 2 Profit before tax 9 Profit after tax 7 Edelweiss’ share in PAT 4 37
Slide 39: Life Insurance: Business Performance Snapshot
Life Insurance Life Insurance: Business Performance Snapshot Q1FY22 Key Metrics Business Update Equity ($ Mn) 59 • Active client base has increased by ~10% YoY • Individual APE CAGR of 25% since FY17 against Individual APE ($ Mn) 8 industry growth at 8% #Policies Issued • Launched a new product – ‘S
Slide 40: Life Insurance: Financial Performance Snapshot
Life Insurance Life Insurance: Financial Performance Snapshot $ Mn Q1FY22 Net Premium Income 28 Investment Income & Other Income 20 Total Income 48 Total expenses 52 Profit After Tax (4) Edelweiss’ share in PAT (2) 39
Slide 41: Our Customer Base & Gross Premium Continue To Grow
Life Insurance Our Customer Base & Gross Premium Continue To Grow No of Active Unique Clients (#) Gross Premium ($ Mn) 333,914 304,187 29 22 22 249,137 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 40
Slide 42: General Insurance: Business Performance Snapshot
General Insurance General Insurance: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Registered GDPI YoY growth of 67% while industry grew at 14% in Q1FY22 Equity ($ Mn) 17 • Strong performance in motor line with YoY GDPI growth at 63% compared to industry at 8% GWP ($ Mn) 8 • Exp
Slide 43: General Insurance: Financial Performance Snapshot
General Insurance General Insurance: Financial Performance Snapshot $ Mn Q1FY22 Net Premium Income 7 Other Income 2 Total Income 8 Total expenses 12 Profit After Tax (3) 42
Slide 44: Strong Growth Enabled By Digital Platform
General Strong Growth Enabled By Digital Platform Insurance No of Unique Clients (#) Gross Premium ($ Mn) 191,857 8 109,089 5 3 44,985 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 43
Slide 45: Wealth Management: Business Performance Snapshot
Wealth Mgt Wealth Management: Business Performance Snapshot Q1FY22 Key Metrics Business Update • Robust business metrices for the quarter despite peak AUA ($ Mn) ~22,597 Covid second wave Net New Money • AuA grew ~8% QoQ with net new money for the ~323 quarter over $323 Mn ($ Mn) • Raised more than
Slide 46: Wealth Management: Financial Performance Snapshot
Wealth Mgt Wealth Management: Financial Performance Snapshot $ Mn Q1FY22 AUA 22,597 Equity 218 Gross Revenue 46 Net Revenue 39 Operating costs 29 Profit before tax 11 Profit after tax 7 Edelweiss’ share in PAT 3 45
Slide 47: Wealth Assets Continue To Maintain Robust Growth
Wealth Mgt Wealth Assets Continue To Maintain Robust Growth Wealth Management AUA ($ Mn) No of Clients (#) 22,597 730,900 17,123 612,400 14,338 503,800 Q1FY20 Q1FY21 Q1FY22 Q1FY20 Q1FY21 Q1FY22 46
Slide 48: Governance and Sustainability
Governance and Sustainability
Slide 49: 12 Member Board Comprises Majority of Independent Directors
12 Member Board Comprises Majority of Independent Directors Mr. P N Venkatachalam Dr. Ashima Goyal Independent Director Independent Director • Banking sector expert and former member of the • Professor at Indira Gandhi Institute of Development Research Interim Pension Fund Regulatory Authority of In
Slide 50: Significant Institutional Ownership
Significant Institutional Ownership Shareholding Pattern as on 30th June,2021 Key Shareholders above 1% Percent 1 Pabrai Investment Funds 6.2% Employee Trust 2 BIH SA 5.2% DIIs, Non 4.8% Promoter Group Institutions 3 TIAA CREF funds 5.0% & Others 32.9% 4 Baron Asset Management 3.4% 24.8% 5 LIC 2.6%
Slide 51: Our Sustainability Efforts
Our Sustainability Efforts EdelGive Foundation’s commitment to Achieving the SDGs (Cumulative till Q1FY22) 123 Districts Sustainable Women across 14 States Quality Education Livelihoods Empowerment $1 Mn* $1.2 Mn* $0.5 Mn* $6.3 Mn * 1.9 Mn Children supported 1,741 hectares of irrigated More than 1,7
Slide 52: EdelGive Funding Partners & Networks
EdelGive Funding Partners & Networks We have partnered with some of the largest Foundations, Corporates and HNIs through our innovative models focused on collaboration 51
Slide 53: Safe Harbour
Safe Harbour DISCLAIMER : This presentation and the discussion may contain certain words or phrases that are forward - looking statements, which are tentative, based on current expectations of the management of Edelweiss Financial Services Ltd. or any of its subsidiaries and associate companies (“Ed
Slide 54: Safe Harbour
Safe Harbour Slide 4: Net worth is including MI, investment in CCD by CDPQ of $116 Mn and excluding EWM equity Slide 4: Ex -Insurance PAT is excluding MI Slide 4: BVPS has been computed by taking into account potential stake dilution from convertible instruments in NBFC Slide 4,19,24 : Available Liq
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