Corporate Presentation H1 FY20
Company Background Key Differentiators H1 FY 20 Financials Management Team CSR and Accolades
Company Background
FFH operates financial institutions in emerging markets Focused on SME and mass market customer segments CHINA Central CHINA 127 Community Banks 4 Provinces, 1800k Customers 40 Outlets 80k Cust INDIA MYANMAR 648 Branches DUBAI, UAE 32 Branches 3,600k Cust 12 outlets 200k Cust 53k Cust CAMBODIA POST BANK 50 Branches INDIA 122k Cust Digital MSME MALAYSIA 42K Cust 82 Branches 1,040 k Cust Fullerton Financial Holdings (FFH) has 8 operating financial services entities located across 6 countries. 4 *FFH is the wholly owned subsidiary of Temasek
Fullerton India Credit Company Corporate Evolution 2003 2010 2014 FFH, parent entity of Commercial Vehicle Accelerated secured business, FICCL is incorporated as a wholly- business launched. Rural network owned subsidiary of Temasek Network consolidated. Operations process revamp Holding (P) Ltd 2005 2011 2015-17 FICCL was acquired by FFH in Portfolio reshape and segmental Capital Infused for growth. Home Fin December 2005 shift to mass affluent. business launched. Digital LAP, SME business re-launched. deployment. Achieved operational breakeven Rural franchise expanded. . 2006-08 2012-13 2018-19 Commercial Launch of Capital infused for growth RoE of 24% delivered. INDAS NBFC operations. Rural network expanded. implemented. New products Pan-India presence established. Funding diversified. launched. Branches exceeded 626, AUM crossed INR 20bn. Early Mid Growth stage construction stage 5
Fullerton India Credit Company Ltd Quick statistics Reach Scale Momentum INR Bn INR Bn 648 15 Branches 44 Monthly business Net Worth writing Thousand accounts INR Bn 600 272 Towns opened every 241 Asset Under month Management Mn Thousand villages Thousand 58 14 3.6 covered employees Customers 6
Key Differentiators
Fullerton India has created significant competitive advantage… • Deep inter-linkages, strategic and operational 1 Strong Parentage and Governance oversight 💢 • Granular Pan India portfolio, addressing the under- 2 Unique Business Model in Retail Finance banked segment with limited access to formal channels • Prudent ALM practices, resilient credit and Conservative Liquidity and Risk management 3 operational risk mitigation • End to end process digitization Future ready through Investment in 4 • Best in class technology ,data infrastructure and Digitization , Technology and Analytics strong analytics ... Leading to strong and predictable outcomes
Fullerton India has created significant competitive advantage… • Deep inter-linkages, strategic and operational 1 Strong Parentage and Governance oversight 💢 • Granular Pan India portfolio, addressing the under- 2 Unique Business Model in Retail Finance banked segment with limited access to formal channels • Prudent ALM practices, resilient credit and Conservative Liquidity and Risk management 3 operational risk mitigation • End to end process digitization Future ready through Investment in 4 • Best in class technology ,data infrastructure and Digitization , Technology and Analytics strong analytics ... Leading to strong and predictable outcomes 9
Close and Continuous Engagement with Parent Strategic and operational guidance, in addition to oversight Strong oversight by Temasek owned Fullerton Financial Holdings(FFH), Singapore IT Strategy Risk Oversight Nomination & Corporate Social Audit Committee Committee Committee Remuneration Responsibility Committee Committee Oversees credit, Oversees Internal Oversees key Oversees strategy on Recommends CSR market and controls appointments and IT, implementation policy, budgets, operational risk framework compensation matters and outsourcing projects, etc. FFH is deeply involved in the strategy development, financial planning and oversees business execution Joint agreement on business strategy and annual targets including investment slates and compensation ALCO is represented by two FFH executives who provide regular inputs, similarly for Finance and Risk Assistance from FFH received in negotiating MNC Banking relationships and for multilateral agencies (IFC, ADB) 10
Fullerton India has created significant competitive advantage… • Deep inter-linkages, strategic and operational 1 Strong Parentage and Governance oversight 💢 • Granular Pan India portfolio, addressing the under- 2 Unique Business Model in Retail Finance banked segment with limited access to formal channels • Prudent ALM practices, resilient credit and Conservative Liquidity and Risk management 3 operational risk mitigation • End to end process digitization Future ready through Investment in 4 • Best in class technology ,data infrastructure and Digitization , Technology and Analytics strong analytics ... Leading to strong and predictable outcomes 11
Strong Pan-India distribution network 648 branches cover 23 states/UT in the county Geographically diversified.. 11% 34% 648 34% 21% East West North South Branch Coverage 40 72% 225 170 127 3 117 9 Metro Tier 1 Tier 2 Tier 3 Tier 4 + 12 UT-refers to union territory
Focused on a bankable, underserved segment Serving customers with limited access to formal banking channels Customer Segment Annual Household Income No. of Households Serviced By Affluent Foreign & 17 mio (7%) > INR 1,100K Private Banks Aspirers Servicing the segment 40 mio (16%) below the Foreign and INR 500K – 1,100K FICC Private banks Positioning Addressable market of 140 Next Billion mio households by 2025 – 121 mio (45%) INR 150K – 500K 50% is underserved Strugglers MFI Lenders 82 mio ( 31%) < INR 150K Microfinance FICC targets underserved segment not covered by large banks and MFIs 3.6 mio live customers provide a large cross sell and upsell opportunity Source : Euro Monitor and BCG 13
A Well-diversified asset portfolio Multiple product, customer and geographic segments create durability Geographically diversified.. ..across multiple asset classes Rural Business Others - Urban East, 5% Loans, 22% Secured*, 1% West, 28% Loans against Property, 18% Rural Loans, 17% South, 42% Business Loan, 13% Digital , 5% Commercial North, 25% Vehicle Loans, Personal Loans 7% - Salaried, 18% Figures as of 30th Sept, 2019 14
Lines of business addressing a wide spectrum of customers, across needs and Affluence Neighborhood financer generating employment & income and partnering growth Urban Serving the underserved largely in Digital under penetrated geographies Rural Direct to customer, faster Providing customized, large and convenient suite of financial solutions Tapping expanded (newer & in affluent markets wider) segment of customer Catering to consumer, retail directly or through businesses and MSME/SME partnership led model, by across customer value chain straight through process 15
Urban Business Wide network, resilient business model addressing Individuals and Small business Wide spread network 236 Retail focus Distribution channels branches and leveraging largely present in tier 2 Tapping all customer Commercial existing cross business downwards, focus on low touchpoints – direct, vehicles, 12% infrastructure ticket, high yield business channel based, lead based and ability to upsell/ cross- Salaried and channels and alternate Consumer sell channels Business loans, 33% Loans 54% Loan against property, 32% Broad customer segment Digital focus Serving wide variety of Product suite customers across Business loans, Digitizing each step of Customized offering across consumer,retail business 22% customer loan life cycle to value chain with clearly and SME/MSMEs for all process efficiencies defined product strategies kinds of personal and and geographical presence business end use 16
Rural Business Multiproduct proposition across customer lifecycle ‘Gramshakti’ - Registered Brand Name of Fullerton India’s Rural Business Comprehensive product suite with insurance throughout the life cycle of customers • Loan against • Business Loans Property • Two Wheeler • Rural Loans Loans • Merchandise • High ticket size Loans loans • Woman’s Hand mnemonic Symbolizing elements • Offered to Small of rural business operations enterprises or • Offered to small rural self • Empowering women small scale entrepreneurs • Sell & collect and medium scale employed • Available in enterprise • Close proximity & deep understanding • Offered to different ticket of the customers • End use may vary Women’s sizes • Last mile door step service • Diverse end use from Capital Livelihood group ranging from expenses to • Widely spread network with 397 capital expenses, branches in 15 states working capital local transportation or needs working capital needs Life Insurance Livelihood Micro Enterprise Aspirations 17
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