Earnings Presentation Q1FY14 www.repcohome.com
Agenda Q1FY ’ 14 Performance Business summary…………………………………………….……..04 ► Financial performance for Q1 ’ FY14 ………………………..05 -10 ► Management ’ s comment…………..……………………..….….11 ► Business Overview Company overview………………………………………………..13 ► Geographic presence………………………………………….…14 ► Differentiated business model…..……………………………….15 ► Annexure Shareholding pattern……………………………………………...17 ► Q1 ’ FY14 financials……………………………………………...18 -19 ► Repco Home Finance Limited Earnings Presentation July 2013 2
Q1 FY ’ 14 Performance
Business summary Loans outstanding (June 30, 2013) Rs 37,467 million Cumulative disbursements (June 30, 2013) ~Rs 52,000 million Average loan per unit Rs 1 million Total number of employees 385 Capital adequacy ratio 24.83% Networth (June 30, 2013) Rs 6,422 million Cost to Income ratio 16.38% Gross NPA (%) (June 30, 2013) 2.22% Net NPA (%) (June 30, 2013) 1.52% Repco Home Finance Limited Earnings Presentation July 2013 4
Continues strong loan book growth in Q1FY14 Figures in Rs million Sanctions and disbursements Loan Book 4,000 3,575 40,000.0 3,338 37,467.1 3,500 35,000.0 3,000 28,970.0 30,000.0 2,500 1,889 25,000.0 1,852 2,000 20,000.0 1,500 15,000.0 1,000 10,000.0 500 5,000.0 - - Q1FY13 Q1FY14 Q1FY13 Q1FY14 Sanctions Disbursements Loan book composition Mix of loan portfolio 100% 100% 13.7% 90% 15.3% 90% No 80% 80% 52.8% 53.4% 70% exposure to 70% 60% 60% developer 50% 50% loans 86.3% 84.7% 40% 40% 30% 30% 47.2% 46.6% 20% 20% 10% 10% 0% 0% Q1FY13 Q1FY14 Q1FY13 Q1FY14 Salaried Non Salaried Individual home loans Loans against property Repco Home Finance Limited Earnings Presentation July 2013 5
Driving income and profit growth Figures in Rs million Income from operations Net interest income 1,400 424 450 1,143 400 1,200 350 1,000 874 300 268 800 250 600 200 150 400 100 200 50 - - Q1FY13 Q1FY14 Q1FY13 Q1FY14 Net profit Cost to income ratio 250 20.00% 223 18.00% 16.38% 16.28% 200 16.00% 14.00% 142 150 12.00% 10.00% 100 8.00% 6.00% 50 4.00% 2.00% 0.00% - Q1FY13 Q1FY14 Q1FY13 Q1FY14 Repco Home Finance Limited Earnings Presentation July 2013 6
Steady expansion in margins and returns Spread Net interest margins 3.5% 3.2% 4.7% 5.0% 4.5% 3.0% 2.7% 3.8% 4.0% 2.5% 3.5% 3.0% 2.0% 2.5% 1.5% 2.0% 1.5% 1.0% 1.0% 0.5% 0.5% 0.0% 0.0% Q1FY13 Q1FY14 Q1FY13 Q1FY14 Return on assets Return on average networth 25.0% 3.0% 2.7% 20.1% 18.8% 2.5% 20.0% 2.2% 2.0% 15.0% 1.5% 10.0% 1.0% 5.0% 0.5% 0.0% 0.0% Q1FY13 Q1FY14 Q1FY13 Q1FY14 Repco Home Finance Limited Earnings Presentation July 2013 7
Improving asset quality Figures in Rs million Net NPA Gross NPA 832 900 3.00% 571 2.50% 571 2.57% 800 745 2.50% 1.97% 571 2.00% 700 2.22% 600 2.00% 570 1.52% 1.50% 500 1.50% 569 400 570 1.00% 300 1.00% 200 569 0.50% 0.50% 100 - 0.00% 569 0.00% Q1FY13 Q1FY14 Q1FY13 Q1FY14 Gross NPA Gross NPA % Net NPA Net NPA % CRAR Provision Coverage 30.0% 35.0% 32.1% 24.8% 30.0% 25.0% 24.0% 25.0% 20.0% 16.4% 20.0% 15.0% 15.0% 10.0% 10.0% 5.0% 5.0% 0.0% 0.0% Q1FY13 Q1FY14 Q1FY13 Q1FY14 Repco Home Finance Limited Earnings Presentation July 2013 8
Business model lends itself to seasonal variation in NPA Quarter on quarter movement in NPA Q1 NPA movement 3.0% 3.5% 3.2% 2.8% 2.9% 2.8% 2.8% 2.8% 3.0% 2.6% 2.6% 2.6% 2.5% 2.2% 2.2% 2.4% 2.2% 2.1% 2.6% 2.2% 2.4% 2.4% 2.3% 1.9% 2.2% 2.0% 1.8% 2.2% 1.4% 2.0% 1.5% 2.0% 1.8% 1.5% 1.2% 2.0% 1.6% 1.8% 1.5% 1.4% 1.3% 1.8% 1.0% 1.6% 1.0% 1.0% 0.9% 1.4% 1.5% 0.5% 1.2% Q1FY11 Q1FY12 Q1FY13 Q1FY14 Gross NPA % Net NPA % 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 is representative of asset quality given conservative underwriting policies of the Company However, a comparison of the first quarter (Q1) NPAs for the last 4 years shows the same is trending down Repco Home Finance Limited Earnings Presentation July 2013 9
Borrowing profile Figures in Rs million Sources of borrowing Sources (as on 30 June ’ 13) Amount Banks 17,587 Repco Bank Ltd, 8% National Housing Bank 10,582 Repco Bank Ltd 2,401 Total 30,570 National Housing Bank, 35% Banks, 58% Repco Home Finance Limited Earnings Presentation July 2013 10
Management ’ s comment We are pleased with our performance in the quarter. We expanded our loan book by 29% during the quarter, on the back of strong 80% year on year growth in disbursements. Our net interest income grew by 58% with PAT growth of 57% YoY. We continue to focus on strong risk management policies. Our gross NPAs as on 30 th June, 2013, amounted to Rs 832 mn, 2.22% of total loans outstanding. However, write-offs on cumulative disbursements have been 0.07%. We have also improved our provision coverage to 32%. We are strongly focused on serving the underpenetrated markets of tier 2 and tier 3 cities and non salaried segments which offer long term growth opportunities. Our competitive strengths would help us deepen our presence in existing markets and expand to new geographies, with attractive returns to shareholders and investors. Mr. R. Varadarajan Managing Director Repco Home Finance Ltd Repco Home Finance Limited Earnings Presentation July 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 46.6% and 53.4% 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 ♦ 93 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 July 2013 13
Strong base in South India; expanding footprint 80 branches and 13 satellite centres Focus on under penetrated markets with two third branches in tier-II & tier-III cities Opened a new branch and converted 6 satellite centres into branches during the quarter Region-wise loan book (30th June ’ 13) Maharashtra, Others, 3% 4% Andhra Pradesh, 14% Kerela, 4% Karnataka, Tamil Nadu, 12% 63% Strong presence Significant presence State-wise retail network No. Tamil Nadu 48 Recent expansion Karnataka 15 Andhra Pradesh 14 Kerela 07 Maharastra 05 Gujarat 02 West Bangal 01 Odisha 01 Repco Home Finance Limited Earnings Presentation July 2013 14
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