Fino Payments Bank Ltd. · NSE:FINOPB
Fino Payments Bank — Q2 FY22 Earnings Presentation
55 slides from Fino Payments Bank's earnings presentation, Nov 16, 2021
Slide 1: Regulation 30 intimation of investor presentation
November 16, 2021 *Fino Payments Bank fQ,;it 44'.e1<1 ffi National Stock Exchange of India Limited BSE Limited Exchange Plaza, 5th Floor, Corporate Relationship Department, Plot No. C/1, G Block, 2nd Floor, New Trading Wing, Bandra - Kurla Complex, Rotunda Building, P.J. Towers, Bandra (E), Mumbai -
Slide 2: Q2FY22 Investor Presentation
Classification: Public Q2FY22 Investor Presentation 16th November 2021 Classification: Public
Slide 3: 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 4: Table of Contents
Classification: Public Table of Contents Introduction to Fino Payments Bank Understanding Fino’s products Evolution of Payments Ecosystem in India H1FY22 Highlights Q2FY22 Highlights Q2FY22 Financial Performance Product Performance Trends Core Technology and Digital Strategy ESG, Board and Managemen
Slide 5: Introduction to Fino Payments Bank
Classification: Public Introduction to Fino Payments Bank Classification: Public
Slide 6: Introduction to Fino Payments Bank
Classification: Public Introduction to Fino Payments Bank Growth Focused – Profitable – FINTECH! What is Fino Payments Bank? Fino Payments Bank offers banking What is the model of Fino Payments Bank? and payments services across the 01 02 03 country like any regular bank However, Fino offers banking
Slide 7: Model of Fino Payments Bank
Classification: Public Model of Fino Payments Bank Phygital – assisted digital model Merchants as Digital as banking 4 1 bankers platforms Customers walk into merchant points 1 Customers can directly download These merchant points are banking Fino’s mobile app – BPAY points – much like a small
Slide 8: Multi Product Offerings
Classification: Public Multi Product Offerings Resilience in revenue model is fortified through a diversified product base Fino Payments Bank is more than a 1 CASA payments fintech Fino facilitates savings and current accounts Cash Management 2 on its own accord – in other words, owning the cust
Slide 9: Omni-Channel Banking Access
Classification: Public Omni-Channel Banking Access A unique phygital revolution in making in the fintech space Fino Payments Bank Branch Fino Payments Bank Merchant Point Fino Payments Bank Mobile Application 8 Classification: Public
Slide 10: Product Evolution Journey
Classification: Public Product Evolution Journey Growth in Fino’s business has always been a function of new products (in ₹ cr) 791 Products launched in H1FY22 691 Subscription Current Accounts 371 AEPS Cash Deposit 230 Aadhaar Pay 171 PPI Cards FY17 FY18 FY19 FY20 FY21 New products launched
Slide 11: Understanding Fino's Products
Classification: Public Understanding Fino’s Products Classification: Public
Slide 12: 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 13: 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 14: 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 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 21: 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 22: 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 23: 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
Slide 24: Evolution of Payments Ecosystem in India
Classification: Public Evolution of Payments Ecosystem in India Classification: Public
Slide 25: Capturing Best of Both Ecosystems
Classification: Public Capturing Best of Both Ecosystems With growth in both cash and digital usage, Fino Payments Bank is well poised best to reap benefits of both the ecosystems Cash In Circulation – Industry UPI Payments – Industry (in ₹ lac cr) (in ₹ lac cr) 2.3x 4.7x 41.0 28.6 29.4 34.3 24.5 21
Slide 26: H1FY22 Highlights
Classification: Public H1FY22 Highlights Classification: Public
Slide 27: Key Business Highlights
Classification: Public Key Business Highlights Month-wise progression through yet another COVID wave – strong recovery demonstrating healthy business fundamentals Apr & May 21 Jun & Jul 21 Aug & Sep 21 Adverse impact of 45 days due to Recovery in business momentum Strong revival in business CO
Slide 28: H1FY22 comparison over H1FY21
Classification: Public H1FY22 comparison over H1FY21 Financial performance and operating parameters Total Throughput (incl. UPI) Total Revenue EBITDA PAT (in ₹ cr) (in ₹ cr) (in ₹ cr) (in ₹ cr) 51% 36% 23% 73% 448.39 11.02 29.03 84,875 23.54 330.53 6.37 56,354 H1FY21 H1FY22 H1FY21 H1FY22 H1FY21 H1FY
Slide 29: Exit Run Rates in Sep-21 and Q2FY22
Classification: Public Exit Run Rates in Sep-21 and Q2FY22 Exit run rates for Q2FY22 and Sep-21 demonstrate growth over Q4FY21 run rates Sep-21 Sep-21 Sep-21 Annualized Throughput Annualized Revenue PAT Margins ₹ 1.75 lac cr + ₹ 1,000 cr + 4% Revenue PAT Classification: Public Q2FY22 > Q4FY21 Q2FY22
Slide 30: Q2FY22 Highlights
Classification: Public Q2FY22 Highlights Classification: Public
Slide 31: Industry Leading Performance Highlights
Classification: Public Industry Leading Performance Highlights Demonstrating strong growth in business volumes, revenue and profitability 14 Cr+ ₹43,386 Cr * 8.1 lacs ₹864K Transactions on Fino platforms Total Throughput in Q2FY22 Registered merchants on Fino Revenue per employee in Q2FY22 41% 38% 6
Slide 32: 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 Revenue in Q2FY22 ₹107.07 Cr 32% Transaction Revenue ₹77.23 Cr ₹242.15 Cr Transaction Revenue 35%
Slide 33: Revenue Growth Momentum is Back in Q2FY22
Classification: Public Revenue Growth Momentum is Back in Q2FY22 Strong sequential and annual growth in revenue during Q2FY22 (in ₹ cr) 35% 17% Revenue in Q2FY22 242.15 228.65 231.84 ₹242.15 Cr 206.24 179.20 151.32 35% growth over Q2FY21 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 YOY Growth Sequentia
Slide 34: Revenue Trajectory Mirroring Historic Trends
Classification: Public Revenue Trajectory Mirroring Historic Trends Revenue levels in FY22 is much higher than FY20 and FY21 levels, but mirroring similar sequential trends Q1FY21 started 12.1% higher over Q1FY20 Revenue (in ₹ cr) and then growth momentum picked up 242.2 As compared to that, Q1F
Slide 35: Highest ever quarterly PAT in Fino Bank History!
Classification: Public Highest ever quarterly PAT in Fino Bank History! Profit momentum back in Q2FY22 (in ₹ cr) PAT for Q2FY22 at 7.89 7.58 ₹7.89 Cr 6.52 4.52 3.13 74% growth over Q2FY21 1.85 Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22 Q2FY22 20.66% 20.03% 18.67% Annualized ROE of Q2FY22 13.48% 20.03% 5.65%
Slide 36: Q2FY22 Financial Performance
Classification: Public Q2FY22 Financial Performance Classification: Public
Slide 37: Bank Level Profit & Loss
Classification: Public Bank Level Profit & Loss Revenue growth of 35% in Q2FY22 leading to a PAT growth of 74% Particulars Q2FY22/ Q2FY22 Q1FY22 Q2FY21 H1FY22 H1FY21 YoY Growth (in ₹ cr) Q2FY21 Revenue 242.15 206.24 179.20 35% 448.39 330.53 36% Product Cost 160.77 135.48 112.04 43% 296.25 204.72 45%
Slide 38: Revenue Mix Across Parameters in Q2FY22
Classification: Public Revenue Mix Across Parameters in Q2FY22 Business continues to be driven by Transaction Income and Own Banking Channel Income Breakup: Transaction & Subscription Income Breakup: Own and Open Banking Channel 32% 26% 74% 68% Transaction Income Subscription, On-boarding & Other In
Slide 39: 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 Q2FY22 35% Total Bank Level Revenues (in ₹ cr) 179.2 242.2 2.2% 4.1% 17.4% CMS & CASA occupy 16.8% of 18.1% the revenue pie in Q2FY22
Slide 40: Key Ratios at Bank Level
Classification: Public Key Ratios at Bank Level Take Rates and Margins both improving northwards despite all competitive forces Take Rate (ex. UPI throughput) Blended Gross Margins 0.73% 33.97% 0.60% 0.61% 33.61% 32.38% FY20 FY21 Q2FY22 FY20 FY21 Q2FY22 PAT Margins 3.3% 2.6% FY20 FY21 Q2FY22 -4.6% 3
Slide 41: Operating Leverage
Classification: Public Operating Leverage Strong operating leverage playing out despite rapid addition in teams to support exponential future business growth Revenue per Employee & Total Employee count Growth in revenue per employee by 8.5% for Q2FY22 32.0 annualized for full year over FY21 29.5 2
Slide 42: Product Performance Trends
Classification: Public Product Performance Trends Classification: Public
Slide 43: CASA and Debit Cards
Classification: Public CASA and Debit Cards A super-high margin and super-high growth product Total Accounts Opened Subscription Revenue (in ₹ cr) (in lacs) 11.3 15.0 8.33 lacs accounts opened in 12.1 11.1 5.9 H1FY22 – implying 74% of 8.4 8.4 7.7 accounts opened in FY21 have 6.2 already been opened
Slide 44: Cash Management Services
Classification: Public Cash Management Services A unique product largely on own banking channel where incremental business comes at no marginal cost Throughput (in ₹ cr) Revenue (in ₹ cr) Take Rate 5,389 12.9 13.0 4,510 4,558 11.4 0.29% 3,830 10.3 0.27% 0.28% 0.24% 0.25% 0.24% 2,622 6.3 866 2.5 Q1FY
Slide 45: 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 Transaction Revenue Onboarding Revenue (in ₹ cr) (in ₹ cr) (in ₹ cr) 15,203 14,308 14,655 47.8 46.2 22.8 24.0 13,753 45.5 21.7 12,923 13,068 44.4 43.3 4
Slide 46: 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) 84.3 86.0 81.9 0.89% 0.88% 0.87% 9,426 9,826 9,449 0.86% 0.86% 0.85% 7,412 63.9 6,391 54.9 3,543 30.2 Q1FY21 Q2FY21 Q3FY21 Q4FY21
Slide 47: Core Technology and Digital Strategy
Classification: Public Core Technology and Digital Strategy Classification: Public
Slide 48: 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 49: Customer Engagement Initiatives
Classification: Public Customer Engagement Initiatives Campaign strategy that is focused more on the value proposition than freebies 48 Classification: Public
Slide 50: 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 51: ESG, Board and Management Team
Classification: Public ESG, Board and Management Team Classification: Public
Slide 52: ESG – Environmental, Social and Governance
Classification: Public ESG – Environmental, Social and Governance With Financial Inclusion at the core, ESG is well embedded in the business model ENVIRONMENT SOCIAL GOVERNANCE Carbon neutral due to low branch presence Onboarding and training women merchants Independently governed board with the Boa
Slide 53: 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 54: 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 55: Thank You
Classification: Public Thank You Classification: Public