Healthy numbers from Home First through all financial metrics, PAT up 213% Y-o-Y | Q2 FY22 Conference Call Highlights

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Business Highlights:

Very strong Q2 FY22 performance, with disbursals crossing 500 Crores for the first time. Disbursals grew by 14% YoY.

Bank is seeing improving trends in collection efficiency and bounce rates. Bounce rate reduced to 15.0% which has been the lowest since the start of the pandemic in April last year.

Q2 FY22 PAT is at 45 Cr, a sequential growth of 27.8%. Bank AUM stands at Rs 4,617 Crores, up 23.8% YoY and 7.5% QoQ.

Cost to income was 35.2% in Q2FY22 compared to Q1FY22 level of 31.9%.

Our Gross Stage 3 at 1.7% has declined by 20 bps in-line with expectation. Bank net stage 3 stands at 1.2% with 0.3% restructuring in Q2.

In Q2, 106 customers were restructured. Total restructuring across Q1 and Q2 is only 0.8% of AUM.

ROE has touched 12.5% in Q2 on an annualized basis.

Bank commenced business in 14 potential branch locations with digital presence in 10 more locations. Total touchpoints currently stand at 161.

As of today, Bank have 74 branches operational and 3 more leases have been signed. Bank is targeting 80+ physical branches by end of FY22.

Digital Banking:

Bank has launched electronic stamp paper, e-signatures and e-NACH across all branches earlier. Bank customer app continues to enjoy high usage with more than 72% of customers registered on the app compared to 67% in Q1 FY22.

Payments and service requests made via the app in Q2 FY22 have gone up by 118% on a yoy basis. 48-hour turn-around-time for loan approval sustained at 88%.

Digital alliances got a boost with a formal agreement with Paytm for originating affordable housing loans.

Financial Highlights:

Bank continued to stay focus on NIM, Opex, PPOP and Credit cost.

NIM has expanded from 4.9% in Q1FY22 to 5.2% in Q2FY22; coming from further improvement in cost of borrowing and optimization of cash on the balance sheet. Net Interest Income has gone up by 47.6% on YoY basis and 8.5% on QoQ basis.

Operating expense has increased this quarter, on expected lines. Opex to Assets stands at 2.8% for the quarter, higher by 30bps on qoq basis. Bank expect this ratio to remain around 3% for FY22.

PPOP stands at Rs 60 Crs, coming from expanding NIM base as well as continued focus on Opex. Credit cost of 0.3% is within the long-term acceptable range.

ECL provision continues to be at 1.3% of the total POS. Bank continued to be prudent with the provisions and has provided for the restructured loans on the highest Stage 2 ECL %age basis.

Bank Ratings:

Bank liquidity and borrowings are rated A+ with a stable outlook for long-term credit from CARE and ICRA and A1+ plus for short term credit from ICRA and India Ratings.

The Company has access to diversified & cost-effective long-term financing, with 19 lenders. Total borrowings including debt securities are at Rs. 3,075 Crs as on Sept’21 from Rs.3,084 Crs as on June’21.


Bank have a healthy borrowing mix with 44% of our borrowings from Banks (Public sector 24%, Private sector 21%), 24% from NHB Refinance and 23% from Direct Assignment.

Bank continue to have zero borrowings through Commercial Paper. Bank cost of borrowing has been trending downwards. Bank’s Q2 FY22 Cost of borrowings stood at 7.1%; reduced further from 7.2% in Q1 FY22. Bank’s marginal Cost Of Borrowings for Q2 FY22 was at 7.9%.

Balance Sheet and Return Ratios:

Bank’s capital adequacy is at 56.4% with tier 1 at 55.2%. Bank Sep’21 Networth stands at Rs 1463 Crores vis-à-vis Rs 1381 Crores as on Mar’21.

Bank Q2 ROA stood at 3.9%, higher from 3.1% witnessed in Q1 FY22. Bank annualized ROE now stands at 12.5% on Q2 numbers.

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