Earnings Presentation H1FY14 www.repcohome.com Agenda H1FY 14 - PowerPoint PPT Presentation

Earnings Presentation H1FY14 www.repcohome.com

Agenda H1FY ’ 14 Performance  Business summary…………………………………………….……..04 ► Financial performance for H1 ’ FY14 ……….………………..05 -09 ► ICRA upgrades long term rating to AA- ………………………..10 ► Management ’ s comment…………..……………………..….….11 ► Business Overview  Company overview………………………………………………..13 ► Geographic presence………………………………………….…14 ► Differentiated business model…..……………………………….15 ► Annexure  Shareholding pattern……………………………………………...17 ► H1 ’ FY14 and Q2’FY14 financials……………………………..18 -20 ► Repco Home Finance Limited  Earnings Presentation  October 2013 2

H1 FY ’ 14 Performance

Business summary  Loans outstanding (Sept 30, 2013) Rs 40,356 million  Cumulative disbursements (Sept 30, 2013) Rs 56,000 million  Average loan per unit Rs 1 million  Number of live accounts 45,409  Total number of employees 398  Capital adequacy ratio (CAR) 25.6%  Networth (Sept 30, 2013) Rs 6,696 million  Cost to Income ratio 15.7%  Gross NPA (%) (Sept 30, 2013) 1.67%  Net NPA (%) (Sept 30, 2013) 0.92% Repco Home Finance Limited  Earnings Presentation  October 2013 4

Strong growth in loan book continues – 30% YoY Figures in Rs million Sanctions and disbursements Loan Book 8,437 45,000 9,000 40,356 7,597 8,000 40,000 7,000 35,000 30,978 5,669 6,000 30,000 4,959 5,000 25,000 4,000 20,000 3,000 15,000 2,000 10,000 1,000 5,000 - - H1FY13 H1FY14 Sanctions Disbursements Sept'12 Sept'13 Loan book composition Mix of loan portfolio 100% 100% 90% 14.0% 16.3% 90% No 80% 80% exposure to 52.8% 54.0% 70% 70% developer 60% 60% loans 50% 50% 86.0% 40% 83.7% 40% 30% 30% 47.2% 46.0% 20% 20% 10% 10% 0% 0% Sept'12 Sept'13 Sept'12 Sept'13 Salaried Non Salaried Individual home loans Loans against property Repco Home Finance Limited  Earnings Presentation  October 2013 5

With robust growth in income and profits Figures in Rs million Income from operations Net interest income 3,000 1,000 898 2,486 900 2,500 800 1,888 700 2,000 571 600 1,500 500 400 1,000 300 200 500 100 - - H1FY13 H1FY14 H1FY13 H1FY14 Net profit Cost to income ratio 20.0% 600 515 18.0% 15.7% 15.4% 500 16.0% 14.0% 400 356 12.0% 10.0% 300 8.0% 200 6.0% 4.0% 100 2.0% 0.0% - H1FY13 H1FY14 H1FY13 H1FY14 Repco Home Finance Limited  Earnings Presentation  October 2013 6

Steadily expanding margins and returns Spread Net interest margins 3.3% 3.5% 4.7% 5.0% 2.8% 3.0% 3.9% 4.0% 2.5% 2.0% 3.0% 1.5% 2.0% 1.0% 1.0% 0.5% 0.0% 0.0% Sept'12 Sept'13 Sept'12 Sept'13 Return on assets Return on average networth 25.0% 22.8% 3.0% 2.7% 20.6% 2.4% 2.5% 20.0% 2.0% 15.0% 1.5% 10.0% 1.0% 5.0% 0.5% 0.0% 0.0% Sept'12 Sept'13 Sept'12 Sept'13 Repco Home Finance Limited  Earnings Presentation  October 2013 7

Continuous improvement in asset quality Figures in Rs million Net NPA Gross NPA 600 1.80% 800 2.50% 672 490 656 1.60% 1.59% 700 2.12% 500 2.00% 1.40% 600 368 400 1.20% 1.67% 500 1.50% 1.00% 0.92% 300 400 0.80% 1.00% 300 200 0.60% 200 0.40% 0.50% 100 100 0.20% - 0.00% - 0.00% Sept'12 Sept'13 Sept'12 Sept'13 Gross NPA Gross NPA % Net NPA Net NPA % CRAR Provision Coverage 30.0% 50.0% 45.3% 25.3% 45.0% 25.0% 40.0% 35.0% 20.0% 15.9% 30.0% 25.3% 15.0% 25.0% 20.0% 10.0% 15.0% 5.0% 10.0% 5.0% 0.0% 0.0% Sept'12 Sept'13 Sept'12 Sept'13 Repco Home Finance Limited  Earnings Presentation  October 2013 8

Business model lends itself to seasonal variation in NPA Quarter on quarter movement in NPA Q2 NPA movement 2.1% 3.2% 3.5% 2.2% 2.9% 2.8% 3.0% 2.0% 2.6% 1.9% 1.8% 2.2% 2.2% 2.5% 2.1% 1.7% 1.8% 1.7% 2.6% 1.9% 1.8% 2.0% 2.3% 1.7% 2.2% 1.6% 1.5% 1.4% 2.0% 1.5% 1.2% 1.6% 1.8% 1.4% 1.6% 1.5% 1.4% 1.4% 1.0% 1.3% 1.2% 1.3% 1.0% 1.0% 0.9% 0.9% 0.5% 1.2% 1.0% 0.9% 0.0% 0.8% Q1FY10 Q2FY11 Q2FY12 Q2FY13 Q2FY14 Series1 Series2 Gross NPA % Net NPA %  Significant variability in NPA profile quarter to quarter due to lumpy income profile of the non-salaried segment, so NPAs look high in some quarters. Variability in NPA profile not representative of asset quality given conservative underwriting policies of the Company  However, a comparison of the second quarter (Q2) NPAs for the last 5 years shows the same is trending down Repco Home Finance Limited  Earnings Presentation  October 2013 9

ICRA upgrades long term rating to AA- Figures in Rs million Sources of borrowing Sources (as on 30 Sept ’ 13) Amount Banks 20,830 Repco Bank Ltd, National Housing Bank 9,970 7% Repco Bank Ltd 2,400 Total 33,190 National Housing Bank, 30% Banks, 63% During the quarter, ICRA upgraded the rating  Category ICRA Rating CARE Rating assigned to RHFL ’ s term loans from banks from A+ to Term loans from banks AA- AA- AA- with stable outlook. Non convertible debenture AA- AA- CARE assigned AA- to long term loans.  Commercial paper A1+ A1+ The non convertible debenture (NCD) programme  of the company has been assigned a rating of AA- and commercial paper has been rated A1+ by ICRA and CARE. Repco Home Finance Limited  Earnings Presentation  October 2013 10

Management ’ s comment We are happy to report yet another good quarter driven by high growth in disbursements and improvement in margins. In the first half of the current year, our net interest income has grown by 57% and PAT by 45%. The robust 53% year on year growth in disbursements has driven our loan book growth to 30%. We have also been able to steadily improve asset quality – our gross NPA as on 30 th September, 2013, stood at 1.67% as compared to 2.12% as on 30 th September, 2012. Our provision coverage ratio also improved to 45.3% with net NPA of 0.92%. During the quarter, ICRA upgraded and CARE assigned AA- rating to our long term loans. They also assigned ratings to NCDs and commercial paper. This will help diversify our liability profile. We are confident of maintaining the growth momentum on the back of our unique and strong position in the non salaried home loan market. We endeavor to deepen our retail presence in existing and new states while generating steady and superior returns to all stakeholders. Mr. R. Varadarajan Managing Director Repco Home Finance Ltd Repco Home Finance Limited  Earnings Presentation  October 2013 11

Business Overview

Niche housing finance company ♦ Significant focus on providing loans to segments underserved by larger HFCs & banks Focus on under ► Target segment comprises of self employed professionals and self employed non-professionals penetrated markets ► Loans to salaried and non-salaried borrowers constitute 46% and 54% of loan book & segments ► Tap customers in tier 2 & 3 cities and peripheries of tier 1 cities ♦ Promoter, Repco Bank, is operating in Southern India since 1969 Strong base and ♦ 102 branches and satellite centres, with ~90% located in Southern India brand in Southern ♦ Expanding footprint by selectively setting-up new branches in the states of Maharashtra, Gujarat, India Odisha and West Bengal ♦ Direct marketing and customer contact ensuring greater transparency, ownership and efficiency Robust business ♦ Low cost of operations: lean branch model, centralized loan process, no DSA sourcing model with control ♦ Robust risk management processes and checks at every step of loan process ensuring good asset on cost and risk quality ♦ T S Krishna Murthy, Chairman: Over 50 years ’ experience, served as Chief Election Commissioner of Experienced India, Chief Commissioner of Income Tax, sits on the boards of Shriram Life, Edelweiss ARC, DSP board and Blackrock Trustee and RRB Energy management team ♦ R Varadarajan, Managing Director: Over 35 years ’ experience in banking & financial services Repco Home Finance Limited  Earnings Presentation  October 2013 13

Strong base in South India; expanding footprint 82 branches and 20 satellite centres  Focus on under penetrated markets with two third  branches in tier-II & tier-III cities Converted 8 satellite centers into branches and opened 1  new branch and 9 satellite centers during H1FY14 Region-wise loan book (30 th Sept ’ 13) Maharashtra Others, 3.3% , 4.4% Andhra Pradesh, 13.1% Kerela, 3.7% Tamil Nadu, 63.5% Karnataka, 11.9% Strong presence State-wise retail network June ’ 13 Sept ’ 13 Significant presence Tamil Nadu 48 52 Karnataka 15 16 Recent expansion Andhra Pradesh 14 15 Kerela 7 7 Maharastra 5 8 Gujarat 2 2 West Bangal 1 1 Odisha 1 1 Total 93 102 Repco Home Finance Limited  Earnings Presentation  October 2013 14