Pnb Housing Finance Limited · NSE:PNBHOUSING
Pnb Housing Finance — Q3 FY19 Earnings Presentation
66 slides from Pnb Housing Finance's earnings presentation, Jan 24, 2019
Slide 1: Exchange cover letter for investor presentation
inan e L•m• ~h~r Ki B~~t- January 24, 2019 The SSE Limited, National Stock Exchange of India Limited, Listing Department, Listing Department Phiroze Jeejeebhoy Towers, "Exchange Plaza" Dalal Street, Sandra Kurla Complex, Mumbai - 400 001 Sandra (E), Mumbai- 400 051 Scrip Code: 540173 Symbol: PNSHOUS
Slide 2: Investor Presentation January 2019
Investor Presentation January 2019
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by PNB Housing Finance Ltd (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any secur
Slide 4: About PNB Housing Finance
About PNB Housing Finance Housing
Slide 5: Leading Housing Finance Company…
Leading Housing Finance Company… Disbursement: INR 27,518 Crore* (US$ 3,943 mn) Asset Under Management: INR 79,737 Crore (US$ 11,425 mn) Loan Assets: INR 70,717Crore (US$ 10,132 mn) GNPA: 0.45% on AUM / 0.47% on Loan Assets Average Cost of Borrowing: 7.97%* Average no. of employees: 1,425 ISO 9001:2
Slide 6: …incorporated in 1988
…incorporated in 1988 • IPO - Raised INR 3,000 2018 Crore • AUM crossed INR • Included in 2017 MSCI Global 25,000 Crore Small Cap • Introduced • DEPL, acquired Index new brand by QIH, the • Certified as a image • AUM crossed “Great Place • Destimoney • Robust and Carlyle Group (1) 2016 INR 50,000 En
Slide 7: HFC Sector well placed...
HFC Sector well placed... Housing
Slide 8: India's Mortgage Market
India’s Mortgage Market Under penetrated mortgage market, rising urbanization coupled with increase in housing demand is leading to mortgage market expansion Indian mortgage market is significantly under-penetrated Increasing urban population Mortgage to GDP Ratio (%) 40.00% 65% 63% 31.99% 32.37% 32
Slide 9: Mortgage Sector Growth: Limited Interest Rate Sensitivity
Mortgage Sector Growth: Limited Interest Rate Sensitivity Leading Bank Home Loan Rate Overall Housing Credit Growth Banks Growth HFC's Growth GNPA for HFCs 30.00% 9.00% 8.98% 8.95% 8.93% 8.90% 8.88% 8.85% 8.83% 8.80% 8.78% 8.75% 8.73% 8.70% 8.68% 8.65% 8.63% 8.60% 8.58% 8.55% 8.53% 8.50% 8.48% 8.45%
Slide 10: Sustainable Growth of HFCs
Sustainable Growth of HFCs Portfolio Growth of HFCs Total Loan of all HFCs: INR 10.3 trillion as on 30-Sep-18 30% 30% 26% 26% 24% Top 5 HFCs: 82% 22% 22% 21% 22% 13.5% 20% 19% 22% 20% 21% 1.0% 19% 19% 16% 18% 1.6% Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 1.6% 36.8% Other Loans Overall Portfolio Hom
Slide 11: Government Initiatives
Government Initiatives Housing
Slide 12: Growth Drivers
Growth Drivers Urbanization Improved Affordability Favourable Demographics Home Buyers Developers Financers • Incentives from PMAY subsidy • 100% tax exemption on • Infrastructure status for affordable and tax deductions affordable housing construction housing, enabling easier institutional for deve
Slide 13: PMAY-CLSS
PMAY-CLSS Changes / Inclusion in the scheme effective 1-Jan-17 • Existing scheme renamed as PMAY-CLSS for EWS/LIG • Maximum tenure changed from 15 to 20 years • Scheme extended to Middle Income Group (MIG) available upto March 2020 Category EWS LIG MIG I MIG II Household Income (INR Lakhs per annum)
Slide 14: Liquidity Position
Liquidity Position Housing
Slide 15: Projected Bond Market Liquidity
Projected Bond Market Liquidity Expected Demand for Corporate Bonds (Issuer) (INR trillion) 3-4 55-60 13-15 1.5-2 2.5-3.5 8-9 27.4 FY18* Infrastructure Corporates NBFCs/HFCs Banks Regulatory Push Total Projected Demand FY23 Enough liquidity for Expected Supply for Corporate Bonds (Investor) future g
Slide 16: Long Term Resource Mobilisation
Long Term Resource Mobilisation ECB NHB Refinance • Raised US$ 465 mn • Received refinance sanction of (INR 3,324 Crore) INR 3,500 Crore from NHB • Fully hedged for 5 year ECB NHB Drawdown of INR 2,000 Crore tenure during Q3 FY18-19 Resource Commercial Paper (CP) Mobilisation • Rolled over INR 9,0
Slide 17: Deposit Mobilisation
Deposit Mobilisation Count INR Crore 10,000 600 537 9,000 523 492 464 470 457 500 8,000 438 7,000 400 6,000 306 5,000 300 4,000 212 200 3,000 7,185 8,464 8,859 9,207 2,000 5,118 6,327 7,185 3,505 4,762 100 1,000 0 0 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Application Count Amo
Slide 18: Asset Liability Maturity profile
Asset Liability Maturity profile (INR Crore) 24,949 23,925 20,107 16,914 14,941 12,615 10,048 7,265 5,736 5,286 4,738 4,485 3,776 3,586 upto 1 month 1-3 month >3-6 months >6-12 months 1-3 years 3-5 years >5 years Total Assets Total Liabilities Particulars upto 1 month 1-3 months >3-6 months >6-12 mo
Slide 19: Rating Action by India Ratings
Rating Action by India Ratings Rating/Outlook Rating/Outlook Date of Change Instrument Type Size of Issue (Previous) (Current) 9th January, 2019 NCDs INR 280 bn INDAAA/RWN IND AA+/Stable Rationale Change in Ind-Ra’s rating approach Change in the rating approach is in light of the Credit assessment i
Slide 20: Financial Performance of the Company
Financial Performance of the Company 19
Slide 21: Highlights – Q3FY19 vs Q3FY18
Highlights – Q3FY19 vs Q3FY18 Disbursement (INR Crore) AUM (INR Crore) Loan Assets (INR Crore) +1% +38% +28% 9,276 9,345 79,737 70,717 55,296 57,668 Q3FY18 Q3FY19 31-Dec-17 31-Dec-18 31-Dec-17 31-Dec-18 GNPA* NII (INR Crore) Opex to ATA PAT (INR Crore) +5 bps + 35% +13 bps +32% 0.47% 558 0.73% 303 0
Slide 22: Highlights – Q3FY19 vs Q3FY18
Highlights – Q3FY19 vs Q3FY18 Average Yield Average Cost of Borrowing Spread +72 bps +72 bps 10.77% 8.21% 2.56% 2.56% 10.05% 7.49% Q3FY18 Q3FY19 Q3FY18 Q3FY19 Q3FY18 Q3FY19 NIM Gross Margin ROE +4 bps +5 bps +250 bps 3.02% 3.06% 3.34% 3.39% 17.61% 15.11% Q3FY18 Q3FY19 Q3FY18 Q3FY19 Q3FY18 Q3FY19 Rat
Slide 23: Ind AS Transition @ pnb Housing Finance Limited
Ind AS Transition 22 @ pnb Housing Finance Limited
Slide 24: PAT Reconciliation for Previous Financial Year
PAT Reconciliation for Previous Financial Year 9M FY18 Q3 FY18 Particulars (INR Crore) (INR Crore) Net Profit as per IGAAP 610.20 217.46 Add / (Less) : Adjustments as per Ind AS on account of: Reclassification of net Actuarial Valuation of Employee Benefits obligation to Other comprehensive income (
Slide 25: Expected Credit Loss (ECL) Provisions
Expected Credit Loss (ECL) Provisions Classification of the Assets based on the ECL computation under Ind AS: Particulars (INR Crore) 31-Dec-18 31-Dec-17 Gross Stage 3 (GNPA) 335.36 230.45 % portfolio in Stage 3 (GNPA%) 0.47% 0.42% ECL Provision Stage 3* 76.19 61.36 Net Stage 3 259.17 169.09 Coverag
Slide 26: Expansion Led Growth and Robust TOM
Expansion Led Growth and Robust TOM 25
Slide 27: Expanding Footprints…
Expanding Footprints… Branches – Point of Sales & Services No. of Branches Processing Hubs – Fountain head for Decision Making No. of Branches Zonal Hubs - Guides, Supervises & Monitors the HUB 16 100 Unique Cities* 21 13 Geography Hub Branches North 8 33 16 8 South 8 34 9 5 West 7 33 6 7 60 32 New
Slide 28: …driven by Scalable Hub & Spoke Model
…driven by Scalable Hub & Spoke Model Spokes Regional Hub Central Operations Customer acquisition / Underwriting Post Disbursement Operations servicing CPC Field Investigation DSA DST Fraud Control Fountain head Unit for decision Underwriter reviews making the reports, does the financial assessment
Slide 29: …and Robust Risk Buying Processes
…and Robust Risk Buying Processes Underwriting to Collections Specialization Customer profiling Other mitigating measures 3C Approach Professionally qualified Selective approach to Mark to Market policies 3C approach: Counsel, with vast mortgage customer profiling and with tailor made offeri
Slide 30: …leading to Strong Business growth
…leading to Strong Business growth (INR Crore) Disbursement 33,195 CAGR +52% 27,518 20,639 14,456 FY16 FY17 FY18 9MFY19 Asset 79,737 CAGR +50% 62,252 41,492 27,555 70,717 57,014 38,531 27,177 31-Mar-16 31-Mar-17 31-Mar-18 31-Dec-18 AUM Loan Assets 1 Crore = 10 mn 29
Slide 31: …with Lower NPAs and Adequate Credit Cost
…with Lower NPAs and Adequate Credit Cost (INR Crore) Non-Performing Assets Credit Cost (ECL Provision) 0.47% 0.42% 186 0.37% 0.37% 0.35% 160 0.31% 0.27% 0.21% 149 149 37 11 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 9MFY18 9MFY19 GNPA NNPA Total Provisions 2-years lagged NPA* 450 177% 181% 180% 179% 1
Slide 32: Sustainable Portfolio Mix
Sustainable Portfolio Mix 31
Slide 33: Asset Under Management
Asset Under Management Product-wise Break-up Consistent Product Mix (As on 31-Dec-18) (% of AUM) Individual Housing 13% Construction Finance 16% Loan Against Property 30% Lease Rental Discounting 29% 30% 29% 30% 5% 57% 4% Non-residential Premises 5% Loans Corporate Term Loan Non-Housing Segment-wise
Slide 34: Well Balanced Growth Across Products
Well Balanced Growth Across Products Individual (INR Crore) Housing Loans 45,746 1% Home Purchase 57% of AUM 36,549 4% Residential Plot 82% 24,868 7% Residential Plot cum Constn 17,029 6% Self Construction Housing Loans Home Improvement/Extn 31-Mar-16 31-Mar-17 31-Mar-18 31-Dec-18 Construction Finan
Slide 35: Loan Assets Walk
Loan Assets Walk Asset Bridge (INR Crore) 79,736 9,019 70,717 AUM Sell Down through Loan Assets Direct Assignment 34
Slide 36: Key Loan Profile
Key Loan Profile Individual Housing Loan Against Construction Finance Loans Property INR 79 Core INR 31 Lakh INR 47 Lakh Average Ticket Size (US$ 11.3 mn) Average Ticket Size (US$ 44.4 k) (US$ 67.3 k) Security Coverage > 1.5x of specific security Weighted Average Loan to Value (at 70.4% 49.5% Debt S
Slide 37: Wholesale Book – 22% of AUM
Wholesale Book — 22% of AUM Housing
Slide 38: Distinct Stages of Real Estate Project
Distinct Stages of Real Estate Project Real Estate Project Lifecycle Risk / Pricing Usage, Conversion and Approvals from Land aggregation Land registration competent authorities Post Launch Apartment Inventory Stage I Stage II Stage III Stage IV Stage V PNB Housing Construction Finance Book 15% Comp
Slide 39: Risk Buying and Review Mechanism
Risk Buying and Review Mechanism Risk Buying Credit Covenants Monitoring • Over 85% loans approved by • Over 90% developers are • Monitoring fund Credit Committee of the rated by external rating utilization, sales velocity, Board agencies collection efficiency and • External valuation and legal escr
Slide 40: Robust Loan Approval Process
Robust Loan Approval Process Credit Committee of the Board (Includes 2 independent Board members) Management Committee (Includes management, Managing Director & 1 independent Board member) Committee of Management (Managing Director, Executive Directors and CFO) Managing Director Executive Directors
Slide 41: Wholesale Book Summary
Wholesale Book Summary % of ATS No. of Unique No. of Loan Weight Avg. Product Segment Wholesale % of AUM INR Cr Corporate Accounts Tenure* Book (US$ mn) houses 79.1 Construction Finance 60% 13% 202 4.0 (11.3) Lease Rental 159.8 18% 4% 177 23 13.6 Discounting (22.9) 80.2 Corporate Term Loan 22% 5% 76
Slide 42: Corporate Term Loans and Lease Rental Discounting
Corporate Term Loans and Lease Rental Discounting Corporate Term Loans Lease Rental Discounting • Constitutes 4% of AUM • Constitutes 5% of AUM • Spread across 17 reputed • Spread across 56 reputed developers developers • Presence in 9 large cities • Tier I cities contributes over 80% • 100% of LRD
Slide 43: Operational and Financial Performance
Operational and Financial Performance 42
Slide 44: Well Diversified Resource Profile
Well Diversified Resource Profile (INR Crore) Access to a Diverse Base of Funding Relationships with multiple lending partners 7.83% 7.12% 6.54% 7.22% 31 Banks 32 Pension Funds 7.32% 6.39% 7.73% 2.30% 3.92% 2.47% 17.32% 19.47% 6.11% 26.83% 25.86% 580 Provident 2 Multilateral 16.74% Funds Agencies 17
Slide 45: Margin Analysis
Margin Analysis Average Yield Average Cost of Borrowings 11.25% 10.76% 9.07% 8.55% 10.07% 10.24% 7.97% 7.71% FY16 FY17 FY18 9MFY19 FY16 FY17 FY18 9MFY19 Spread Gross Margin 2.36% 2.27% 3.31% 3.45% 2.18% 2.21% 3.27% 3.26% FY16 FY17 FY18 9MFY19 FY16 FY17 FY18 9MFY19 Ratios are calculated on Monthly Av
Slide 46: CRAR and Gearing
CRAR and Gearing Capital to Risk Asset Ratio 21.62% 5.14% 16.67% 14.49% 12.70% 3.92% 3.12% 3.66% 16.48% 12.75% 11.37% 9.04% 31-Mar-16 31-Mar-17 31-Mar-18 31-Dec-18 Tier 2 Tier 1 Average Gearing (x) 10.77 8.72 9.19 7.60 31-Mar-16 31-Mar-17 31-Mar-18 31-Dec-18* Ratio is calculated on Monthly Average B
Slide 47: Operating Leverage playing out with Better Return Profile
Operating Leverage playing out with Better Return Profile Opex to ATA Ratio Cost to Income Ratio 0.83% 25.15% 0.73% 22.43% 21.09% 0.68% 0.69% 19.54% FY16 FY17 FY18 9MFY19* FY16 FY17 FY18 9MFY19* Return on Asset Return on Equity 1.54% 1.51% 17.12% 1.46% 16.22% 1.37% 14.92% 14.00% FY16 FY17 FY18 9MFY1
Slide 48: Shareholding
Shareholding Housing
Slide 49: Shareholding
Shareholding Shareholding as on 31-Dec-18 4.3% 0.9% 1.9% 8.7% Top Shareholders 32.8% General Atlantic Singapore Fund, Birla 19.2% Sunlife MF, Motilal Oswal MF, Reliance MF, SBI MF, Malabar Investments, Invesco, Vanguard, BNP Paribas, Wasatch 32.4% Promoters (PNB) Quality Investment Holdings (The Car
Slide 50: Detailed Financials
Detailed Financials ©) Housing |
Slide 51: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Particulars (INR Crore) Q3 FY19 Q3 FY18 YoY Q2 FY19 QoQ 9M FY19 9M FY18 YoY Revenue from Operations Interest Income 1,764.1 1,335.6 32.1% 1,612.1 9.4% 4,900.0 3,622.6 35.3% Fees and commission Income 109.5 78.5 116.4 341.4 220.6 Net gain on fair value changes 51.
Slide 52: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (INR Crore) 30-Sep-18 Particulars (INR Crore) 30-Sep-18 LIABILITIES ASSETS 1 Financial Liabilities 1 Financial Assets (a) Payables (a) Cash and cash equivalents 4,071.2 (I) Trade Payables (b) Bank Balance other than (a) above 0.0 (i) total outstanding dues of m
Slide 53: Saksham – Contributing to the Society
Saksham – Contributing to the Society 52
Slide 54: Glimpses of Social Interventions
Glimpses of Social Interventions Enhancing Human Potential • Partnered with The Confederation of Real Estate Developers Association of India (CREDAI) to conduct Onsite & Offsite skill enhancement training programmes for construction workers Reaching Out, Reaching Far • Collaborated with various NGOs
Slide 55: Winning Awards & Accolades
Winning Awards & Accolades Mr. Sanjaya Gupta Conferred bronze Winner at The Bagged award at Jointly received the The Penguin TV recognised as One award at the SKOCH Economic Times Trescon BIG 50 BFSI ‘Best Stand-out IR’ Commercial has of the ‘Most Awards 2018. The Innovation Tribe Leaders Awards. Th
Slide 56: Management Team...
Management Team... Housing
Slide 57: …with Extensive Industry Experience
…with Extensive Industry Experience Age : 56 Years No. of Years with PNBHF : 8 Years Sanjaya Gupta Managing Director Prior Engagements : AIG, ABN Amro Bank N.V. and HDFC Limited Age : 46 Years Age : 53 Years Age : 56 Years No. of Years with No. of Years with No. of Years with PNBHF : 6 Years PNBHF :
Slide 58: …under the Aegis of a Highly Experienced Board
…under the Aegis of a Highly Experienced Board Sunil Mehta Sh. Lingam Venkata Prabhakar Sunil Kaul Shital Kumar Jain Gourav Vallabh Chairman – Non Executive Non Executive Director Non Executive Director Independent Director Independent Director Age: Age: Age: Age: Age: 59 Years 56 Years 58 Years 79
Slide 59: Corporate Governance
Corporate Governance Board of Directors It has 10 members, 3 are non-executive directors, 6 are independent directors and Managing Director Audit Committee (ACB) It has 3 members, all are independent directors Nomination and Remuneration Committee (NRC) It has 4 members, 2 are independent directors
Slide 60: Key Takeaways
Key Takeaways Strong Distribution Growth in One of the Lowest Efficient Improving Cost to Network and Robust Loan Book NPA’s amongst Borrowing Mix Income Ratio TOM HFC’s Strong distribution 5th largest by Loan Assets Robust Asset Quality Diverse and cost Operating leverage network with pan India (1)
Slide 61: Annexure
Annexure 60 @ pnb Housing Finance Limited
Slide 62: Employee Efficiency
Employee Efficiency (INR Crore) Disbursement / Employee Loans Outstanding / Employee 28.99 49.79 45.28 24.25 39.91 21.23 FY16 FY17 FY18 31-Mar-16 31-Mar-17 31-Mar-18 Total Revenue / Employee Profitability / Employee 4.59 4.82 0.72 3.96 0.62 0.48 FY16 FY17 FY18 FY16 FY17 FY18 Calculated on average nu
Slide 63: Return to Shareholders
Return to Shareholders Earnings Per Share (INR) Dividend Per Share (INR) 49.8 9.0 36.7 6.0 27.5 3.4 FY16 FY17 FY18 FY16 FY17 FY18 Book Value Per Share (INR) 378.5 336.7 169.1 31-Mar-16 31-Mar-17 31-Mar-18 62
Slide 64: Glossary
Glossary ATA Average Total Assets GNPA Gross Non-Performing Asset ATS Average Ticket Size HFCs Housing Finance Companies AUM Asset Under Management LAP Loan against Property BVPS Book Value per Share LRD Lease Rental Discounting C/I Cost to Income NCDs Non-Convertible Debentures CRAR Capital to Risk
Slide 65: Formulas
Formulas Ratios Formulas Used Average Borrowings (%) Interest Expense / Average Borrowings Average Gearing Ratio (x) Average Borrowings / Average Net worth Average Yield (%) Interest Income on Loans / Average Loan Assets Operating Expenditure(Employee Cost + Other Expenses + Depreciation - Acquisiti
Slide 66: Thank You
Thank You Company: PNB Housing Finance Limited CIN: L65922DL1988PLC033856 Ms. Deepika Gupta Padhi (Head-Investor Relations) Phone: +91 11 23445214 Investor.relations@pnbhousing.com www.pnbhousing.com