Key Business Parameters and Business Highlights:
Disbursements were at 1,287 Crores in Q4 FY22 growth of 27% YoY, Highest Quarterly disbursements in Banks history
Bank continuously to have a cautious approach going forward regarding any uncertainty of any further wave of the pandemic.
The average Portfolio yield was reduced by 51bps from 13.16% as of March 2021 to 12.65% as of March 2022.
The Average Borrowing Cost was also reduced by 52bps from 7.40% as of March 2021 to 6.88% as of March 2022.
Spread on the loan book was maintained at the same level and stands at ~5.76% as of the end of March 2022.
Exposure to 90+ DPD has come down from 0.83% in Dec 2021 to 0.68% As of the end of March 2022.
The company will take all the required measures and strive to control the 1+ DPD below 5 percent.
The total number of live accounts at 1,50,837 as of March 2022, registering a YoY growth of 20%.
Assets Under Management grew 20% YoY to Rs. 11,350 Crores as of 31 March 2022.
During Q4 FY21, there was a tax benefit on share-based payment of 12.6 Crores adjusted in the Profit & Loss Account. Whereas for Q4 FY22, such tax benefit of 21.4 Crores was directly transferred to Retained Earnings (Equity).
The housing penetration is at a very low level in India, which gives a large opportunity to the company and a huge runway for growth.
The company is confident of achieving a 20-25% growth in the overall business going forward. And the overall spread will be maintained in the range of 5%.
Cash flows level for the company are now matching the pre-covid levels for the company.
The company maintains a high-quality liquidity position of 2,090 crores as of March 2022 and a total cash & Cash equivalents of 1,569 crores as of March 2022.
The company has a total surplus of 3,849 crores as at the end of March 2022 quarter.
The company made incremental borrowings of 4,384 Crores during the years 2021-22 at 6.04%
The average cost of debt is at 6.86% for the Financial Year 2021-22.
The Bank holds very strong relations with development financial institutions, which helps the company to have control over the overall cost of funds.
The Long-term credit ratings continue to maintain at AA+ with a positive outlook from both the rating agency: ICRA and CARE.
The company has zero exposure to commercial paper as a prudent borrowing practice.
Branches and Employees:
The total number of Branches at 314.
34 new Branches were added in the last 12 months.
5,222 Employee count during the financial year 2022, a growth of 20% YoY.
Rise in Expenses:
2020 due to the global pandemic, no salary hikes, and bonuses were given. But in the current fiscal year, due to the high attrition rates across the industries, salary hikes and bonuses were given to the employees in order to retain the employees, which resulted in higher operating expenses.
The company is into the expansion phase. Every year the company is opening ~30 branches during the year. This is resulting in higher expenditure. Also, digital growth will require higher investments.
The company will be scaling its digital and technical infrastructure which will result in higher investments. This transformational journey will be completed in the next 12-15 months according to the company’s guidance.
The company was able to reduce the opex by 30-35 bps during the pre-pandemic period. But due to the covid and the lockdowns the company was not able to take advantage of the operating leverage.
In this fiscal year, the company to get a 30-35bps cost-efficiency improvement in the overall OPEX ratio.
Gross Stage 3 is at 0.68% and Net Stage 3 is at 0.52% as of the end of the March 2022 quarter.
Home Loan Gross stage 3 is at 0.96% and other mortgage Loan gross stage 3 is at 1.11% as of the end of March 2022.
Geographical Branch wise growth:
Whenever a company opens a new branch, it takes some time to the newly opened branch to mature and show growth. That is the reason why some branches show a single-digit AUM growth in the initial phases. It takes approx. 3-years for the branch to operate at 100% efficiency after it is opened.
The bank does not have any pre-decided number in mind regarding the branch count. All of the branches turn Return on Equity Positive within 12 months of the new opening.
On average, the company expects 20-25% YOY growth on the overall basis from all the branches put together. Some branches will be functioning at 100% efficiency, while some might be working at a lower efficiency. So seeing at branches on an individual basis would not be the fair aspect.
Floating and Fixed Rate products portfolio:
Between the Fixed and Floating rate portfolios, there is a difference of 275 bps in terms of yields.
Whenever the company borrows at a floating rate, the company lends the same at floating rates to the customers, whereas when the company borrows at a fixed rate, the company lends the same at a fixed rate of borrowings to its customers.
Investment In the Subsidiary:
Aavas Finserv: The company has invested 15 Crores in the subsidiary. The company has applied for an NBFC license In Aavas Finserv. And as per the regulatory requirement the minimum capital required to float a NBFC has been put into the company. The company wishes to do Secured MSME products financing and other consumer lifestyle products financing business into this subsidiary.