Investor Presentation - fincarebank.com€¦ · Completed (senior leadership team of over 18 people with over 500 man years of experience and senior teams of 50 people with over 600

CONFIDENTIAL © Fincare SFB 2019

Investor PresentationFY20 / Q4 FY20

CONFIDENTIAL


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Performance Highlights & Key updates

Other updates – Q4 FY20/ FY20

Profitability, P&L and Balance Sheet

Governance and Management

Executive Summary

01


FY20 Highlights

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Overall Assets Liabilities Technology• Liabilities not a

constraint for

growth. Transformed

bulk into retail.

• Deposits growth of

128% and healthy

retail share of 77% vs

57%

• WhatsApp Banking

– a new benchmark

in conversational

banking

• Leveraged Kaizala

and Progressive

Web Apps as a

game changer

• Built solid in-house

team

• Overall Growth of

51% for Gross Loan

Advances and 74%

for On-book

Advances

• Strong Deposit

growth of 128% in

FY20 along-with

CASA growth of

148%

• Healthy PAT of ₹143

Cr in FY20 vs. ₹102

Cr in FY19. Growth of

41%

• Growth of MF,LAG

GLA of 51%,107%

respectively

• Reduced GNPA to

0.9% in FY20 from

1.3% in FY19.

• MF GNPA of 0.6% vs

1.3%.

Others|• Renewed Brand Association with Viswanath Anand• Developed Fincare SFB Brand Proposition – Wish More, Get More

• Significant talent build up for control function, digital and IT• ESOP Structure closure• India Banking Reforms Conclave & BFSI


Key Highlights Q4FY20|FY20

4

Total Income

366 | 1216 (204|675) (79% |80%)

P&L Highlights (In ₹ Crore)

Business Highlights (In ₹ Crore)

Gross Loan Portfolio

5,342

(3,530) (51%)

Deposits

4,654(2,043) (128%)

Net-worth^

904

(666) (36%)

Operational Highlights

# States/UTs & Districts

19 &177

(13 &144) (32% & 23%)

# Banking Outlets*

711(569) (25%)

Legend 1: for Q4/FY20

Q4 FY20 | FY20

(Q4FY19 | FY19) (YoY Growth)

In ₹ Crore

In ₹ Crore

Net Interest Income

177 | 620(111|377) (60%|64%)

# Employees

7,363(5,498) (34%)

# Customers

25 lakh+(15.5 lakh+) (61%)

PPOP

111 | 338(49|155) (125%|118%)

Disbursements

1,481 | 4963

(1,252|3,238) (18%|53%)

^ after a voluntary/non-regulatory COVID-19 provision of ₹ 85 crore

* including asset focused branches, BC banking outlets & excluding

administrative offices, processing centers, call centers etc.

Profit After Tax^

8 | 143(33|102) (-77%|141%)

Legend 2: as at FY20

FY20

(FY19) (YoY Growth)

Growth story of around 80%

Strong Balance Sheet, Liabilities & Capital

Driving diversification, Scale and depth


Key Ratios Q4FY20 | FY20

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ROA^

0.4% | 2.4%

3.3% | 2.9%

Other Income

25.9% | 18.9%

19.7% | 15.4%

PCR

91.1%

94.4%

Opex/Assets

7.6% | 7.9%

10.1% | 9.7%

GNPA / NNPA*

0.9% / 0.4%

1.3% / 0.3%

ROE^

3.3% | 18.4%

22.8% | 22.4%

Cost to Income

53.3% | 55.8%

64.1% | 65.2%

Credit to Deposit Ratio

104%

136%

Cost of Funds

8.8% | 9.0%

9.0% | 9.3%

NIM

10.2% | 10.2%

10.8% | 10.8%

Deposits / Net-Advances

97%

74%

CRAR^

29.3%

23.6%

Tier I CRAR^

23.5%

21.5%

CASA

11.9%

11.0%

Retail Share of Deposits

76.9%

56.5%

Legend:

Q4FY20|FY20

Q4FY19|FY19

Balance Sheet RatiosProfit & Loss Ratios

Secured Book

19.8%

19.6%

Yield

22.2% |22.4 %

20.8% | 20.2%

Credit cost

1.0% | 1.0%

0.8% | 1.0%

Legend:

FY20

FY19

^ after a voluntary/non-regulatory COVID-19 provision of ₹ 85 crore * Without considering a voluntary/non-regulatory COVID-19 provision of ₹ 85 crore


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Completed Transformation – Say FY17,Do FY20

Bank Goals at the time of launch & status (FY17-20)

Introduce new secured asset products to existing customer segments. Completed (TWL, RLAP & RLAG target

MF customers).

Successfully manage the transition of the balance sheet from MFI to the SFB. Completed (CD ratio –104%).

Assets

Build and stabilize the liabilities franchise among existing customer and new customer

segments. Completed (Shakti, Smart Saver Accounts availed by all MF/TWL/RLAP and LAP/AHF customers respectively).

Build sufficient wholesale liability options to fund asset growth. Completed (Bank has full range of options from

Bulk FD/ Refinance/ IBPC/ CD/ Securitisation).

Liabilities

Rollout and stabilize the branch infrastructure, BC points and rapidly grow our digital banking

channels. Completed (711 bank branches, Transitioned all MFI centres to banking outlets, operationalised 202 BC outlets, assisted digital

banking & self-service digital penetration >95% across all retail assets & liabilities).

Digital & Channel

Technology

Build and stabilize the organization with addition of liabilities, compliance and treasury teams. Completed (senior leadership team of over 18 people with over 500 man years of experience and senior teams of 50 people with over 600

man years experience, all across banking, lending, finance, treasury, compliance, risk and technology).

Talent

Stabilize technology and processes. Completed (99% uptime across 50+ systems including completely integrated core

banking, currently handling 50 million+ transactions).


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Executive Summary

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Business Metrics, Key Performance Highlights(1/2)

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3,530 3,853 4,347 4,746

5,342

2,154

3,530

5,342

Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY18 FY19 FY20

Gross Loan Advances (₹ Cr.)

CAGR

57%

4,172 4,995

5,929 6,628 7,116

2,274

4,172

7,116


Total Assets (₹ Cr.)

CAGR

77%

2,043 2,699

3,681 4,076

4,654

727

2,043

4,654 61%

68%73% 74% 77%

40%

61%

77%


Total Deposits (₹ Cr.) Deposits % of Liabilities

YoY

51%

YoY

71%

CAGR

153%YoY

128%

224 231 346

439 555

37

224

555

11.0%

8.6%9.4%

10.8%11.9%

5.1%

11.0%11.9%


CASA (₹ Cr.) CASA %

930 1,163 1,635

2,217

3,016

132

930

3,016

56.5%51.7% 53.8%

65.3%

76.9%

23.2%

56.5%

76.9%


Retail Deposits (₹ Cr.) Retail % of Total Deposits

YoY

224%

CAGR

378%

CAGR

289%

YoY

148%

Deposits growing stupendously Granular Deposits, share of Retail increasing CASA improving over the years

Gross Loan Advances growing over years Steady expansion of Total Assets over the years


Business Metrics, Key Performance Highlights(2/2)

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1,252 981

1,255 1,246 1,481 2,072

3,238

4,963


YoY

18%

CAGR

55%

16 17 21

23 25

10

16

25


Continuously expanding Customer Base over the years

Fincare spreading its footprint pan-India

5,498 5,956

6,468 7,025 7,363

4,357

5,498

7,363


Increasing Strength with growing employee base

Growing Disbursements over the years

YoY

64%

CAGR

59%

569 626

673 693 711

360

569

711


YoY

34% CAGR

30%

YoY

25% CAGR

41%

Disbursements (₹ Cr.) Number of Branches

Customers (‘Lakhs) Number of Employees


10

10.1%

8.4% 8.5%7.2% 7.6%

14.7%

9.7%

7.9%


Optimizing Opex. as a proportion of Total Assets

49 65 66 96 111

54

155

338


Asset Quality maintained with PCR

Improving Cost to Income Ratio despite jittery times

64.1%58.2% 61.6%

52.1% 53.3%

76.6%

65.2%

55.8%


Cost to Income Ratio (%) Opex to Average Total Assets (%)

1.3% 1.3%1.2% 1.3%

0.9%

0.3%0.5% 0.4% 0.5% 0.4%

94.4%

91.3% 91.5%90.3% 91.1%

Mar'19 Jun'19 Sep'19 Dec'19 Mar'20

GNPA(%) NNPA(%) PCR(%)

Improving Pre-Provision Operating Profit (₹ Cr.)

YoY

125%

CAGR

151%

Key Ratios – Financial Metrics(1/3)

*Without considering additional voluntary/non-regulatory COVID-19 provision

*

PPOP (₹ Cr.)


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28 22 29 33 62

33

70

145 19.7%

14.0%16.6% 16.3%

25.9%

14.4% 15.4%

18.9%


Other Income (₹ Cr.)

As a % of Contributed Value

204 244 282 324 366 351

675

1,216


Total Income (₹ Cr.) Other Income (₹ Cr.)

Average CoF (%)

9.0% 9.2% 9.0% 9.0% 8.8%10.1%

9.3% 9.0%



YoY

79%

CAGR

86%

YoY

60%

CAGR

78%

111 133 143 167 177 196 377

620

10.8% 10.6%9.7% 10.2% 10.2% 9.9%

10.8% 10.2%


Net Interest Income (₹ Cr.)

Net Interest Margin (%)

Net Interest Income (₹ Cr.)

YoY

111%CAGR

109%


3.3%3.1%

2.5%

3.6%

0.4%NA

2.9%

2.4%


33 39 37 60

8 NA

102

143


68*

203*

22.8% 22.6%20.6%

30.1%

3.3%NA

22.4%

18.4%


666 705 740 896 904

338

666 904


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Networth (₹ Cr.)

YoY

36%CAGR

64%

PAT (₹ Cr.)

YoY

41%


964*

3.3%* 26.0%*

RoE (%) RoA (%)

*Without considering a voluntary/non-regulatory COVID-19 provision

964*

3.9%*

29.2%*


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Executive Summary

01


14

711 Banking Outlets

17 States, 2 UTs

177* Districts

Well Diversified Geographical presence reaching 25 lakh+ customers

Banking Network Mar’19 Mar’20

Bank Branches 417 509

Rural 39 49

Urban 94 114

Semi-Urban 246 293

Metro 38 53

URC Outlets 152 202

Total 569 711

*exclusive of Asset BCs states

states in which Asset BCs are present

7.9 6.8 6.2 4.8 3.5 7.9

3.5

7.0 9.4 13.6 16.5 19.5 7.0

19.5

0.6 0.9 1.3 1.8

2.5

0.6

2.5

Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY19 FY20

Asset only Asset & Liability Liability only Customers (in lakhs)

15.5

17.1 21.023.0

25.4

15.5

25.4


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Instrument Rating Rating Agency Type

Term Loans From Bank

CARE A; Stable(Single A; Outlook: Stable)

CARE Ratings

Long Term[ICRA A] (Stable)

(Single A; Outlook: Stable)ICRA

Unsecured Sub-ordinated Debt/ Non-Convertible Debentures

CARE A; Stable(Single A; Outlook: Stable)

CARE Ratings Long Term

Ind A-/ Positive(Single A Minus; Outlook: Positive)

India Ratings Long Term

Fixed Deposit Programme[MA+] (Stable)

(MA+; Outlook: Stable)ICRA Medium Term

Certificate of Deposits Crisil A1+ CRISIL Short Term

FY15 FY16 FY17 FY18 FY19

BBB-/ Stable BBB-/ Positive A-/ Stable A-/ Stable A/ Stable

Long term Credit Rating evolution

Rating of Financial Instruments

Credit Rating


Fincare response to COVID-19

Business Continuity

• More than 70% banking outlets during Lockdown 1.0, ~ 80-90% banking

outlets in Lockdown 2.0 & post Lockdown 2.0, ~100% banking outlets

were opened with COVID-19 precautionary measures in place

• Zero downtime on Internet Banking, Mobile Banking and Corporate

Internet Banking.

• ~90% of Ahmedabad corporate office employees and ~95% of

Bangalore corporate office employees worked from home in April.

• VPN solution for secure connectivity was provided to 330 employees

across corporate offices

• Employee communication and Business meetings carried out

effectively on Blue Jeans

Customers

• Reached out to ~98% MF ,~98% Mortgage customers & ~100% LAG

customers through telecalls to ensure their well-being

• 100% MF customers were provided moratorium. Out of which, 3.35

lakhs MF customers opted out for Moratorium.

• Sent out COVID-19 advisory to 20.45 lakh(~98%) MF clients

• Put up COVID-19 awareness posters in the residences of 57,269 MF

customers

• Assisted 4,719 MF customers on digital payment methods to fulfil

their basic needs.

• Rapidly launched AEPS & DBT enrolment in two weeks

• Conducted 65+ webinars in association with professionals like

Doctors, Bankers, Chartered Accountants, Economists with 800+

participants

Employees

• Distributed Groceries to 3000+ families

• Distributed 3,133 hygiene kits to Corona Warriors (police &

sanitation staff)

• Fincare employees donated ~ ₹ 19 lakh to COVID-19 PM

Cares Fund from their one-day salary

Society

• Extended insurance coverage to 7346 employees to

include COVID-19 and full reimbursement for treatment of

COVID-19

• Weekly communication with employees by CEO & MD via

platforms like Coffee with CEO, Chat with CEO, and

fortnightly e-Townhall with 300+ employees.

• Video based training to 3,777 field employees of MF on

digital payments and other relevant topics.

• Adequate COVID-19 precautionary measures at Corporate offices, Branches and back offices for employees

Business

Continuity

Customers

Employees

Society

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Awards & Recognition (1/2)


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Awards & Recognition (2/2)


Fincare in the media: Q4 FY20

19


Asset Products – Evolution over the years

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GLA by segment (₹ Cr.) CAGR

Mic

rolo

an

1,227 1,817 2,839 4,285

Mar'17 Mar'18 Mar'19 Mar'20

LA

P

87 136 335

569


IF

- 20 89 184


LA

G

-160 257 255


Oth

ers

-21

10

49


To

tal

1,314 2,154 3,530 5,342


Se

cure

d

Bo

ok

87 337 691 1,057


52%

87%

27%

202%

53%

60%

130%

Product Wise Loan Book - Fincare

6%

84%

7%

0.9% 1.0%

11%

80%

5%

3% 1%

Mar’18 Mar’19

9%

80%

7%

3% 0.3%

LAP Micro Loans IF LAG Others

Mar’20

GLA ₹ 3,530 Cr.₹ 2,154 Cr. ₹ 5,342 Cr.

Break-up of Gross Loan Portfolio; Loans moving more towards

Secured/ Non-MF portfolio

76% 79% 91%

24% 21% 9%

16%

20% 20%

Mar'18 Mar'19 Mar'20

On-Book Off-Book Secured Portfolio (%)

₹ 2,154 Cr. ₹ 3,530 Cr. ₹ 5,342 Cr.


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Executive Summary

01


Profit & Loss Statement

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In ₹ Crore Q4FY20 Q3FY20QoQ

GrowthQ4FY19

YoY Growth

FY20 FY19YoY

Growth

Audited Unaudited Audited Audited Audited

Income

Interest Earned 304 292 4% 177 72% 1,071 607 76%

Interest Expended 128 125 2% 68 88% 451 233 94%

Net Interest Income 177 167 6% 109 62% 620 375 66%

Other Income 62 33 89% 27 128% 145 69 111%

Total Net Income 238 200 19% 136 75% 765 443 73%

Expenses

Employee Expenses 76 64 18% 52 47% 263 180 46%

Other Costs 51 40 29% 35 45% 164 107 53%

Provisions & Write-offs 100 11 789% 9 977% 135 45 200%

Total Expenses 227 115 97% 96 136% 562 333 69%

Profit Before Tax 11 84 -87% 40 -72% 203 110 84%

Tax Expenses 3 25 -86% 7 -50% 59 8 607%

Profit After Tax 8 60 -87% 33 -77% 143 102 41%


Balance sheet : Total Assets grew 71% YoY

23

In ₹ Crore 31st March 2020 31st December 2019 QoQ Growth 31st March 2019 YoY Growth

Liabilities

Capital 64 64 0% 56 14%

Reserves & Surplus 840 832 1% 610 38%

Deposits 4,654 4,076 14% 2,043 128%

Borrowings 1,368 1,445 -5% 1,283 7%

Others 190 211 -10% 179 6%

Total Liabilities 7,116 6,628 7% 4,171 71%

Assets

Cash and Cash equivalent 1,083 1,168 -7% 521 108%

Investments 1,007 799 26% 701 44%

Advances 4,816 4,481 7% 2,765 74%

Fixed Assets 40 39 4% 33 22%

Other Assets 170 141 21% 152 12%

Total Assets 7,116 6,628 7% 4,171 71%


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Executive Summary

01


25

Sameer NanavatiDirector

Pramod KabraChairman

Rajeev YadavManaging Director

Susan ThomasIndependent Director

Vinay BaijalIndependent Director

Varun SabhlokIndependent Director

Sunil GulatiIndependent Director

Alok PrasadIndependent Director

Partner, True North MD & CEO, Fincare SFB Founder, Disha Microfin

Former CEO, MFIN Former CRO, RBL Bank,

Yes Bank

Faculty at IGIDR; Economist

Formerly, Citibank, PayPal Sr. Advisor, KPMGFormer CGM, RBI

SFB Board composed of industry stalwarts and veterans with rich experience in banking, financial inclusion, rural economy and regulatory matters

Ravindran A. L.Nominee Director

General Manager, SIDBI

Fincare SFB – Board of Directors


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Rajeev YadavManaging Director &

Chief Executive Officer

Last Org: GE MoneyExperience: 25 years

Ashish MisraChief Operating

Officer,

Retail Banking

Last Org: IndusInd BankExperience: 22 years

Soham ShuklaChief Operating Officer,

Rural Banking

Co-Founder: Disha Microfin

Last Org: MoneyMitraExperience: 26 years

Deepabh JainChief Operating Officer,

Mortgages & IF

Last Org: IFCExperience: 27 years

Kishore MangalvedheChief Operating Officer,

Rural Banking – South

Last Org: L&T FinanceExperience: 33 years

Suresh KrishnamurthyChief Operating Officer,

Retail Banking - South

Last Org: HDFC BankExp: 26 years

Ravish ChandraChief Operating Officer,

Rural Banking - West

Last Org: Kotak Mahindra BankExp: 19 years

Dr. Ashish ChhabraChief Operating Officer,

Retail Banking - West

Last Org: Indusind bankExp: 21 years

Virender SharmaHead – Alternate Channels,

Rural Banking

Last Org: Swadhaar FinserveExp: 20 years

Fincare SFB – Business Management Team

Nilesh SangoiChief Digital Officer & Head –

Data Analytics

Last Org: MerucabsExperience: 22 years


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Chandar RaoChief Technology Officer

Last Org: FINOExperience: 24 years

Keyur DoshiChief Financial Officer,

Co-Founder – Disha Microfin


Pankaj GulatiChief People Officer

Last Org: MetlifeExperience: 24 years

Devika Praveen Head - Compliance

Last Org: Kotak

Mahindra Bank LtdExperience: 25 years

Rakesh DasHead – Credit

Last Org: IFMR CapitalExperience: 18 years

Venkata JayaramanChief Risk Officer

Last Org: ING-Kotak Bank

Experience: 33 years

Rajeev YadavManaging Director &

Chief Executive Officer

Last Org: GE MoneyExperience: 25 years

Mahender ChawlaChief Operating Officer,

Operations & Gold Loans


Shashi Kumar R.Head – IT Projects

Last Org: Samhita MicrofinanceExperience: 19 years

Fincare SFB – Functional Management Team

Prakash SundaramChief Strategy Officer

Last Org: CommonwealthExperience: 25 years


28

In case of any queries, please contact:-

Mr. Keyur Doshi, CFO

Board Line: 080 4250 4444

E-mail Id: [email protected]

Thank You!


Disclaimer

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This presentation has been prepared by Fincare Small Finance Bank Ltd. (the “Bank”) solely for information purposes, without regard of any specific objectives, financial situations informational needs of any particular person. All information contained has been prepared solely by the Bank. No information contained herein has been independently verified by anyone else. This presentation may not be copied, distributed, redistributed disseminated, directly indirectly, in any manner.

This presentation does not constitute offer or invitation, directly or indirectly, to purchase or subscribe for any securities of the Bank by any person in any jurisdiction, including India and the United States. No part of it should form the basis of be relied upon in connection with any investment decision any contract commitment to purchase or subscribe for any securities. Any person placing reliance on the information contained in this presentation or any other communication by the Bank does so at his or her own risk and the Bank shall not be liable for any loss or damage caused pursuant to any act or omission based on fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Further, past performance is not necessarily indicative of future results.

This presentation is not a complete description of the Bank. This presentation may contain statements that constitute forward-looking statements. All forward-looking statements are subject to risk, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially include, among others, future changes or developments in the Bank’s business, its competitive environment and political, economic, legal and social conditions. Given these risks, uncertainties and other factors, viewers of this presentation are contained not to place undue reliance on these forward-looking statements. The Bank disclaims any obligation to update these forward-looking statements to reflect future events or developments.

Except as otherwise noted, all of the information contained herein is indicative and is based on management information, current plans and estimates in the form as it has been disclosed in this presentation. Any opinion, estimate or projection herein constitutes a judgment as of the date of this presentation and there can be no assurance that future results or events will be consistent with any such opinion, estimate or projection. The Bank may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. The accuracy of this presentation is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the Bank.

This presentation is not intended to be an offer document or a prospectus, a statement in lieu of a prospectus, an offering circular or an advertisement under the Companies Act, 2013 and Rules made thereafter, as amended, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended by any other applicable law.

Figures for the previous period/ year have been regrouped wherever necessary to confirm to the current period’s/ year’s presentation. Total in some columns/ rows may not agree due to rounding off.

Note: All financial numbers in the presentation are from Audited Financials or Limited Reviewed financials or based Management estimates.


Key Definitions

30

Yield As a % of Average Gross Loan Advances

Net Interest Margin As a % of Average Interest Earning Assets

Non-Interest/Other Income Includes Processing Fees and Other Income

Opex/Assets As a % of Average Total Assets

Cost to Income Opex/ (Net Interest Income + Other Income)

RoA Computed on monthly average of Interest earning Assets

RoE Computed on monthly average of Net worth

Credit Cost As a % of Average Gross Loan Advances

Secured Book Computed on Total Gross Loan Advances

PCR As per RBI norms (including technical write-offs)

Credit to Deposit Ratio On-Book Advances/Total Deposits


Glossary

31

AEPS Aadhaar-enabled Payment System MFI Micro Finance Institution

AHF Affordable Housing Finance NIM Net Interest Margin

BC Business Correspondent NPA Non Performing Asset

CAGR Compounded Annual Growth Rate Opex Operating Expenses

CASA Current Account and Savings Account PAT Profit After Tax

CD Certificate of Deposit PPOP Pre-Provisioning Operating Profit

CoF Cost of Fund PCR Provision Coverage Ratio

CRAR Capital Adequacy Ratio Q-o-Q Quarter on Quarter

DBT Direct Benefit Transfer RLAP/RLAG Rural LAP/ Rural LAG

FY Financial Year RoA Return on Assets

GLA Gross Loan Advances RoE Return on Equity

IBPC Inter Bank Participation Certificate SFB Small Finance Bank

LAG Loan Against Gold TWL Two-Wheeler Loan

LAP Loan Against Property URC Unbanked Rural Centre

IF Institutional Finance UT Union Territory

MF Micro Finance Y-o-Y Year on Year

Documents

Investor Presentation - fincarebank.com€¦ · Completed (senior leadership team of over 18 people with over 500 man years of experience and senior teams of 50 people with over 600