IIFL Finance FY22 profits Rs1188 Cr up 56% YoY & Q4FY22 profits Rs 321 Cr up 30% YoY

Highlights of performance

Healthy rise in net profitfor FY22 at Rs 1,188 Cr, up 56% y-o-y; and for Q4FY22 at ₹321 Cr, up 30% y-o-y

Strong loan asset growth of 15% y-o-y to `51,210 Cr, despite Covid interruptions during the year, was contributed by core products of home loan, gold loan and microfinance loan.

Liquidity (free cash, equivalent and undrawn lines) at Rs 9,499 Cr, is adequate to meet near term obligations as well as planned growth in loan book.

Digital initiative gained impressive traction with DIY loan disbursement doubling QoQ for MSME loans to Rs 265 Cr and 100% of home loan processing becoming paperless.

RoE stood at 20.6% p.afor FY22, despite huge investment in expansion, driven by improved productivity of operating and financial assets.

IIFL Finance Limited Consolidated Results– FY22

IIFL Finance Limited Consolidated Results Quarterly – Q4FY22

*excluding Fair value changes

MrNirmal Jain, Managing Director, IIFL Finance Ltd., commented on the financial results: “FY22 was a watershed year for us as we made big strides in our physical branch network as well as in expansion of digital footprint. We are pleased to report sustained healthy profit growth. Our return on equity of above 20% p.a. is amongst the best in the industry. We are looking at major digital transformation with focus on digital DIY loans. We have invested aggressively in branch network, people and technology in FY22, paving the way for accelerated growth in next 2-3 years.”

Financial performance review

IIFL Finance had loan assets under management (loan AUM) of Rs 51,210 Cr as atMarch 31, 2022, with the home loans segment constituting 35%, gold loans 32%, business loans 15% and microfinance loans12% of the total AUM.

The company’s annualized ROEand ROA for Q4FY22 stood at 21.1% and 2.9% respectively.Core pre-provision operating profit stood at Rs.670.0Cr. during the quarter.Average borrowing costs for the quarterdeclined 14 bpsq-o-q and 28bps y-o-yto 8.6%.

94% of our loans are retail in nature and 69% of our retail loans (excluding gold loans which are not classified as PSL loans) are PSL compliant. The assigned loan book, currently at Rs14,298Cr, is 28% of AUM. Besides, there are securitized assets of Rs2,397 Cr. Apart from securitization and assignment, we have colending book of Rs 2,845 Cr. There exists significant opportunity for further assignment, securitization and colending, given our granular and retail book.

GNPA stood at3.2% and NNPA stood at 1.8%, as at March 31, 2022. This includes the impact of RBI notification dated 12^th November, 2021. With implementation of Expected Credit Loss under IndAS, provision coverage on NPAs stands at123%.

Total CAR stood at 23.9% including Tier I capital of 16.0% as at March 31, 2022, as against minimum regulatory requirement of 15% and 10% respectively

The total presence of branches stood at3,296 as at the end of quarter, spanning the length and breadth of the country.

Business segment review

Home Loans:At the end of the quarter, retail home loan assets grew by 23% y-o-y and 7% q-o-q to Rs 17,727Cr.The primary focus in this segment is on affordable and non-metro housing loans. Over55,700 customers were benefitted with a subsidy of more thanRs 1,300 Cr under the Pradhan MantriAwasYojana – Credit Linked Subsidy Scheme.

Gold Loans:As of March 31, 2022 the gold loans AUM grew to Rs. 16,228Cr, showing a strong growth of 23% y-o-y and 11% q-o-q.Gold loans are provided through our widespread presence in 1,260+ cities across 22 states to salaried, self-employed and MSME customer segments.

Microfinance:The microfinance loan AUM stood at Rs. 6,155Cr,up 30% y-o-y and22% q-o-q,as atMarch 31, 2022. The microfinance customer base stood at 17.5 lakhcustomers.

Business loans: Secured business loans grew by 4% y-o-y to Rs.5,675Cr. whereas unsecured business loans de-grewby7%y-o-y to Rs. 1,884Cr.

Liquidity position

Cash and cash equivalents and committed credit lines from banks and institutions of Rs 9,499 Cr were available as on March 31, 2022. During the quarter, we raised Rs5,954 Cr through term loans, bonds and refinance. Loans of Rs4,284Cr were securitized and assigned during the quarter. Additionally,during the quarter, IIFL Finance successfully raised Rs. 1,464Cr via refinancing, out of which Rs. 1,200 Crwas from NABARD.

IIFL Finance bought back US$50 million overseas bonds

During the quarter, the company bought back US$50 million worth of bonds. The Company had raised US$400 million through its maiden overseas bonds issue in February 2020 at an effective issue price of $998.75 per $1000 of face value, to fund its business growth. Bonds of $376 million were outstanding as on March 31, 2021. During FY22 the Company had bought back bonds of US$52.3 million including $50 million at par through an open tender offer in March 21, 2022. The buyback was funded by corresponding ECB loan of maturity not less than the maturity of the bonds bought back, in line with RBI regulations. This will reduce cost of funds by approximately 225 basis points on this transaction.After these buybacks, bonds of US$323.7 million remain outstanding as on March 31, 2022.

Raised US$ 68 Million from Asian Development Bank

IIFL Home Finance Limited has raised US$68 million by issue of NCDs to Asian Development Bank (ADB) to improve funding to affordable green housing for lower-income groups in India. 80% will be earmarked for women borrowers and 20% for green-certified homes.

Awards and Accolades:

·       IIFL Finance received‘The Most Preferred Brand Award for Sustained Brilliance in Brand Building’ at Marksmen Daily Awards.

·       IIFL Finance’s ‘Gold Loan at Home’ product received ‘Customer Services Excellence Award’ at the World BFSI Congress

·       IIFL Finance’s ‘WhatsApp Loan’ product received ‘Best Use of Mobile Technology in Financial Services’ award at the World BFSI Congress

·       IIFL Finance was certified as ‘Great Place to Work’ for the fourth year in a row

About IIFL

IIFL Group is one of the leading players in the Indian financial services space. Prior to the Composite Scheme of Arrangement (effective May 2019), IIFL Finance Limited (Erstwhile “IIFL Holdings Limited”) (Bloomberg Code: IIFL IN, NSE: IIFL, BSE: IIFL) was engaged in the business of financing, asset and wealth management, retail and institutional broking, financial products distribution and investment banking through its various subsidiaries.

IIFL Finance Ltd is one of the leading retail focused diversified NBFC in India, engaged in the business of loans and mortgages along with its subsidiaries - IIFL Home Finance Limited and IIFL Samasta Finance Limited. IIFL Finance, through its subsidiaries, offers a wide spectrum of products such as Home loan, Gold loan, Business loan, Microfinance, Capital Market finance and Developer & Construction finance to a vast customer base of over 8 million customers. IIFL Finance has widened its pan-India reach through extensive network of branches spread across the country and various digital channels.

IIFL Securities Limited is one of the largest independent full-service retail and institutional broking house along with being a leading investment advisory firm in India providing diversified financial services and products to corporate, institutional investors, foreign portfolio investors, mutual funds, insurance companies, alternative investment funds, trusts, high net worth individuals and retail clients.

IIFL Wealth is one of the fastest growing private wealth management firms in India with an AUM greater than USD 30 billion (as on December 2021). They serve the highly specialized and sophisticated needs of high net worth and ultra-high net worth individuals, affluent families, family offices and institutional clients through a comprehensive range of tailored wealth management solutions.

This document may contain certain forward looking statements based on management expectations. Actual results may vary significantly from these forward looking statements. This document does not constitute an offer to buy or sell IIFL products, services or securities. The press release, results and presentation for analysts/press for the quarterand year ended March 31, 2022, are available under the ‘Financials’ section on our website www.iifl.com.

IIFL Group refers to IIFL Finance Ltd and its group companies.