Ujjivan Small Finance Bank Limited
8,210words
28turns
0analyst exchanges
0executives
Key numbers — 40 extracted
rs,
14%
1%
5%
15%
4%
11%
23%
7%
18%
27%
45%
Guidance — 8 items
Creating cost optimized operations
opening
“Assets 65%-70% 44% 27% 30% 27% 30% 5.5% 7.0% 0.1% 0.8% 2.4% 1.0%-1.5% 80% 70% 60% 50% 40% 30% 20% 10% 0% 6.8% 70% 6.3% 61% 6.3% 6.2% 6.3% 55% 54% 62% < 5.0% ~ 55% 7.5% 6.5% 5.5% 4.5% 3.5% 2.5% 1.5% 0.5% -0.5% FY21 FY22 FY23 FY24 FY25 FY30E FY21 FY22 FY23 FY24 FY25 FY30E Secured (%) Credit Cost to Avg.”
Creating cost optimized operations
opening
“Asset % • Secured portfolio at 44% in FY25, with a target of around 65% to 70% • Cost efficiencies and Operational leverage would bring the C/I to by FY30 • Continuous improvement in underwriting contained Credit Cost at 2.4% for FY25 around 55% and Opex/Avg.”
Diversified Offerings
opening
“Bullet Repayment FY24 FY25 Q1FY26 Branch Network • Mostly Urban/Semi-urban branches”
Diversified Offerings
opening
“• Total Book: ₹10,253 Cr 1 Wholesale Liabilities • Target Segment: NBFC, NBFC MFI, HFC, Capital Market etc.”
Diversified Offerings
opening
“• Total Book: ₹2,798 Cr • WC Products: 35% to 40% of book 2 FIG Assets Mid Corporate • To commence by FY27 3 • Target Segment will be services and manufacturing • Products: Existing products of Term Loan, WCDL, CP, NCD and BG • New Products: Purchase finance, LC, etc.”
Diversified Offerings
opening
“and capitalize it for remittances building up on AD1 license Investor & Analyst Meet 2025 I 47 FIG: DIVERSIFIED ASSET GROWTH Gross Loan Book (₹ in Cr) 30 00 25 00 20 00 15 00 10 00 50 0 0 4.3% 648 FY21 4.7% 855 FY22 4.7% 1,128 FY23 FIG (Gross Loan Book) % Gross Loan Book 5.8% 1,731 FY24 8.7% 2,785 FY25 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Lending only to credit-worthy NBFCs and MFIs (minimum BBB- Credit Rating) WCDL launched Oct ’24; now forms 40%+ of FIG asset book.”
Impacted
opening
“Investor & Analyst Meet 2025 I 59 FY26 GUIDANCE: STRONG EXECUTION AT PLAY Asset Growth ~20% Secured Book Growth ~35% Return on Asset 1.2%-1.4% • In FY25 GLB increased despite stress in Micro Banking • Thus, shift to Secured book in line with management long term vision • Cost-to-Income due to build out of asset products and retail deposit franchise • Credit Cost peaked in Q4FY25 and well on way to normalization in FY26 Return on Equity 10%-12% CASA Deposit ~27% Credit Cost to Avg.”
Impacted
opening
“GLB 54.0% 7.0% 37.0% 34.0% 35.0% 5.5% 7.0% 7.9% 15.0% 2.4% 2.3% - 2.4% 0.8% 0.1% FY21 FY22 FY23 FY24 FY25 FY26 FY21 FY22 FY23 FY24 FY25 FY26 FY21 FY22 FY23 FY24 FY25 FY26 GLB Growth Secured Book Growth (%) Credit Cost / Avg.”
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Risks & concerns — 3 flagged
• Asset quality remains well-contained in both segments reinforcing management’s strategy of calibrated growth with strong risk discipline • Yield from MM is high and consistent during the last two quarters at 19.4% Investor & Analyst Meet 2025 I 32
— Diversified Offerings
Investor & Analyst Meet 2025 I 59 FY26 GUIDANCE: STRONG EXECUTION AT PLAY Asset Growth ~20% Secured Book Growth ~35% Return on Asset 1.2%-1.4% • In FY25 GLB increased despite stress in Micro Banking • Thus, shift to Secured book in line with management long term vision • Cost-to-Income due to build out of asset products and retail deposit franchise • Credit Cost peaked in Q4FY25 and well on way to normalization in FY26 Return on Equity 10%-12% CASA Deposit ~27% Credit Cost to Avg.
— Impacted
Sc (Bangalore University), PGDM (Mount Carmel Institute) Experience: UFSL, ANZ Grindlays Bank and Bank Muscat Education: Associate Company Secretaryship (ACS, ICSI), Chartered Accountancy (CA, ICAI) Experience: Credit Access Grameen Ltd, Tata Group Ashish Goel Chief Credit Officer Brajesh Joseph Cherian Chief Risk Officer Education: PGDM in Marketing & Finance (XIM, Bhubaneshwar),B.
— For Investor Queries
Speaking time
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Opening remarks
Strategic Vision
Transformation at Play Deposits & Liability Strength 04 05 Diversified Asset Build Out 03 Technology Enabled Growth FY30: Bridge to Future Investor & Analyst Meet 2025 I 3
Strategic Vision
Transformation at Play STRATEGIC VISION: TO BE THE TRUSTED BANK FOR ASPIRING INDIA Differentiated Business Model • Focus on Mass, Aspiring and Emerging Affluent customer segments • Creating Cost Efficient Scalable Model Well Geographically Diversified SFB • Presence in 26 states & UTs through 752 branches as of Q1FY26 • Diversified Gross Loan Book with no single state contributing >14% Transformation at Play • Multiple Products Incubated • Upfront investments made in branches, teams, technology, human resource over FY21 – FY25 • Built granular retail deposit franchise with increase in CASA and retail TD • Launched Secured lending products to deepen engagement and service life cycle needs of customers Strong Financial Performance • Delivery in Tough Times : FY25 performance delivered through growth in GLB & CASA and sustained Asset Quality • Continued Diversification: FY25 asset mix change supported by product expansion Front ended Capex, strong foundation built over the last 5 years Cu
Note
# Includes IBPC and Securitization Investor & Analyst Meet 2025 I 5 FOCUS ON “MASS”, “ASPIRING” AND “EMERGING AFFLUENT” CUSTOMER SEGMENTS Annual gross HH income (₹ Lac p.a.) Affluent >20 Emerging Affluent 10 - 20 Aspiring 5 - 10 Mass 1.5 - 5 Low Income <1.5 Number of HHs (in Mn) 2010 2023 2030 Number (Mn) and % of Households in different income brackets 3 (1%) 13 (5%) 35 (15%) 13 (4%) 34 (11%) 70(23%) 27 (7%) 64 (18%) 99 (27%) 108 (45%) 134 (44%) 139 (38%) 79 (33%) 54 (18%) 238 307 35 (10%) 364 Ujjivan Focus Customer Investor & Analyst Meet 2025 I 6 OPERATIONAL MOAT AND ROBUST PILLARS Operational Moat & Business Model Retail-Focused Lending Model • FY25: 91% of loans to retail customers • Predominantly informal and semiformal Professional Leadership & Governance: • Experienced Board and domain-led Management • Strong risk, audit and compliance frameworks Robust Portfolio Quality • FY25: GNPA: 2.2%, NNPA: 0.5%, PCR: 78% • One of the best portfolio performance in Micro Banking segment du
Creating cost optimized operations
• • • Integrated Tech Stack Right sized Employee Count Prudent Branch and Physical Infrastructure Outlook 5 Years Leading to higher sustained profitability • • • Liability repricing and increased CASA% Growing portfolio of higher yielding secured products NIM to be around 6% to 7% for FY30 • • • Enhanced underwriting and data analytics Credit cost to trend lower as secured book expands Credit cost in FY30 to be around 1.0% to 1.5% of Avg. GLB • • • Branch count addition by around 400 FY30 Cost to Income of ~55% FY30 Opex to Avg Asset below 5.0% • • FY30: ROA around 1.8% to 2.0% and ROE around 16% to 18% Sufficient capital buffer with CRAR around 17% to 20% Investor & Analyst Meet 2025 I 11 IMPROVING ASSET MIX WITH MARGIN DISCIPLINE GOING AHEAD Secured Share and Credit Cost to Avg. GLB Cost to Income and Opex to Avg. Assets 65%-70% 44% 27% 30% 27% 30% 5.5% 7.0% 0.1% 0.8% 2.4% 1.0%-1.5% 80% 70% 60% 50% 40% 30% 20% 10% 0% 6.8% 70% 6.3% 61% 6.3% 6.2% 6.3% 55% 54% 62% < 5.0% ~ 55% 7.5% 6.5%
Branch level and Agile Credit Policy
Branch / Area /Customer Figures as per Q1F26 Investor & Analyst Meet 2025 I 27 MICROBANKING – CONSISTENTLY BEST IN THE INDUSTRY Straight through processing : 42%-45% in Group loans Responsible Lending : No lending to delinquent clients Loans to customers with 30 + DPD in previous 6 • months is < 0.5% Cross Sell: SA and TD : ~₹2,200 Cr book 38% digital collection in Q1 FY 26 MFIN Guardrails implemented in Letter & Spirit Business Productivity FY25 (per FOS) : Industry# at around ~₹6 - ₹7 Lac Ujjivan ~₹12 - ₹13 Lac Source: #-Micro meter Investor & Analyst Meet 2025 I 28 MICROBANKING - CONSISTENTLY BEST IN THE INDUSTRY Group Loan (₹ in Cr) Individual Loan (₹ in Cr) 8,961 10,271 14,225 16,009 13,090 1,686 1,898 3,141 4,799 5,182 FY21 FY22 FY23 FY24 FY25 FY21 FY22 FY23 FY24 FY25 Group Loan (PAR 30 & PAR 90) Individual Loan (PAR 30 & PAR 90) 4.4% 4.5% 5.0% 5.4% 2.8% 3.6% 2.9% 3.7% 3.5% 2.5% 2.5% 1.7% 3.2% 3.5% 3.4% 2.0% 2.0% 1.7% 3.9% 2.2% Q1FY25 Q2FY25 Q3FY25 Q4FY25 Q1FY26 Q1FY25 Q2FY25 Q3F
Diversified Offerings
Affordable Housing AFFORDABLE HOUSING AND MICRO-MORTGAGES Affordable Housing (AHL) Total Market Potential : ₹44.6 Lac Cr by 2030 Market Actual Outstanding as of Dec’24: ₹13 Lac Cr Potential to grow 3.5x by 2030 Source: CII & Knight Frank – Confederation of Indian Industry Micro Mortgage (MM) Total Market Potential: ₹ 22 Lac Cr Market Actual Outstanding as of Mar’23: ₹ 1.8 Lac Cr Potential to grow:12x by 2030 Source: ICICI Securities (Mar’23) & CareEdge Report Salient Features Offered across Tier 2/3 towns and peri-urban areas with dedicated sales team Customer Segment: Focus on first-time homebuyers, self-employed informal segment with loans upto ₹20 Lac Localized Credit, Legal and Technical policy to assess customers income and property supports in TAT reduction Salient Features Major Focus is on end use driven product Focus is in sourcing self employed informal profiles with ticket size more than ₹5 Lac to avoid marginal proposal Multiple product relationship to customers aids in ena
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