Jana Small Finance Bank Earnings Call Summary (Q1 2024)
Compliance and Call Overview
• Earnings call held on July 22, 2024, for the quarter ending June 30, 2024.
• Transcript submitted to National Stock Exchange of India and BSE Limited.
• Key executives, including MD & CEO Ajay Kanwal, participated.
• Forward-looking statements included, with risks and uncertainties noted.
• Transcript available on the bank's website.
Financial Performance Highlights
• Deposit Growth:
• 41% year-on-year increase.
• 5% quarter-on-quarter growth.
• CASA Ratio: Increased from 19.7% to 20.4%.
• Advances Growth: 25% year-on-year.
• Asset Growth:
• Secured assets up 8% quarter-on-quarter.
• Unsecured assets down 1%.
• Capital Adequacy: 19.3%, projected to rise to 20.2% with interim profits.
• ROA and ROE: 2.1% and 18.8%, respectively.
• GNPA: Slight increase due to seasonal factors.
Risk Management and Strategy
• Strong risk management practices maintained.
• Introduction of a new scorecard for enhanced analytics.
• Focus on secured lending, comprising 62% of the portfolio.
• Reduction in unbanked rural branches noted.
Retail Financial Services Insights
• Growth Decline: 1.2% decline in the Business Correspondent (BC) portfolio due to rural distress.
• Home 360 Strategy: Housing loans as anchor products to enhance customer relationships.
Digital Initiatives and Deposit Composition
• Significant growth in mobile app usage and digital transactions.
• Retail deposits now make up 65% of total deposits.
• Loan-to-deposit ratio reduced from 109% to 102%.
Challenges and Future Outlook
• Q1 identified as challenging for NPAs due to external factors.
• Confidence expressed in managing and resolving issues in upcoming quarters.
• Growth guidance set for 30%-40% profit after tax and 20% growth in assets and deposits.
Provisioning and Credit Costs
• Surplus provisions reserved for unsecured loans.
• Current credit cost of 2.5% acknowledged, with expectations for improvement.
• Proactive measures in place for ECL risks.
Asset Quality and Lending Practices
• Individual loans have a gross NPA of 4.4%, higher than group loans.
• Strict lending criteria maintained to avoid over-leveraging in microfinance.
Brand and Royalty Payments
• Renegotiation of branding contract with Jana Urban Foundation effective November 1, 2024.
• Annual cost reduced from Rs. 12.2 crore to Rs. 4.5 crore.
Conclusion
• Overall positive trends in secured assets and CASA growth.
• Optimism about improving collections and financial health in upcoming quarters.

Jana Small Finance Bank Limited Investor/Analyst Meeting Summary
Meeting Overview
• Date: April 30, 2024
• Transcript submission to stock exchanges on May 8, 2024.
• Key executives present: Managing Director, CEO, department heads.
• Transcript available on the bank's website.
Key Highlights
• Performance Metrics:
• PAT: INR 514 crores (INR 670 crores with deferred tax assets).
• AUM growth: 24.9%.
• Deposit growth: 38.2%.
• Gross NPA: 2.0%, Net NPA: 0.5%.
• Capital Adequacy Ratio: 20.3%.
• Strategic Focus:
• Shift to secured loan portfolio (60% of total assets).
• Emphasis on microfinance and rural expansion.
• Digital transformation: 23% of payments made digitally.
Risk Management and Credit Operations
• De-risking Strategy:
• Geographical diversification.
• Best practices in underwriting and credit operations.
• Development of sophisticated loan assessment scorecards.
Microfinance and Affordable Housing
• Microfinance Strategy:
• Portfolio growth: nearly INR 10,000 crores (14.1% growth).
• Shift from urban to rural microfinance.
• Partnerships with Business Correspondents for rural expansion.
• Home360 Strategy:
• Comprehensive financial products beyond housing loans.
• Focus on customer relationships and cross-selling.
Digital Transformation and Customer Engagement
• Digital Offerings:
• High app rating (4.6) and increased digital transactions.
• Successful cross-selling of debit cards and mobile banking services.
Financial Performance and Projections
• Financial Growth:
• ROA: 2.4% (1.8% excluding deferred tax assets).
• ROE: 26.9% (20.7% excluding deferred tax assets).
• Strong deposit growth and geographical diversification.
• Future Projections:
• Increase in secured loans from 60% to 80% over three years.
• Anticipated NIM compression but improved cost-income ratios.
Governance and Operational Resilience
• Governance Measures:
• Strict governance in technology implementation.
• Incident reporting and customer service management via CRM systems.
• Operational Efficiency:
• Focus on stability and efficiency amid external challenges.
• Preparedness for disruptions in eKYC processes.
Conclusion
• Optimistic outlook on future performance with a focus on sustainable growth, customer-centric strategies, and digital transformation.
Summary of Conference Call with Ajay Kanwal
Universal Banking License
• Plans to apply for a universal banking license around May-June next year.
• Emphasis on thorough preparation before application.
Exposure to Non-Banking Financial Companies (NBFCs)
• Cautious approach with small exposures to about 40 customers.
• Slowed lending to NBFCs to focus on MSME sector growth.
Gold Loan Segment
• Decline in gold loan segment due to COVID-19.
• Optimism for future growth with a new gold loan vertical.
Loan Offerings Expansion
• Focus on expanding two-wheeler loans and considering four-wheeler loans.
• Cautious approach to manage risks.
Branch Relocation Strategy
• Relocation of underperforming branches to better growth areas.
• Adaptation as an urban microfinance institution.
Operating Expenses Management
• Projected 20% balance sheet growth with operating expenses growth of 8% to 10%.
Return on Assets (ROA)
• Improved credit costs and cost-income ratio expected to support ROA growth.
Operational Risks and Vigilance
• Importance of vigilance in banking operations emphasized.
• Key risks include technology, operational risk, and fraud management.
Advance-to-Deposit (AD) Ratio Strategy
• Conservative liquidity position maintained with long-term refinancing options.
• Achieved 38% growth in a challenging year.
Collection Trends and Special Resolutions (SRs)
• 60% collection rate on older SRs reported.
• Management promised additional financial details and future growth guidance.
Profit After Tax (PAT) and Return on Equity (ROE)
• Projected 30% to 40% growth in PAT and expected ROE of 19% to 21%.
• Focus on maintaining a secured business proportion for consistent performance.

Jana Small Finance Bank Limited Investor/Analyst Meet Summary
Meeting Overview
• Date: March 1, 2024
• Compliance: Transcript submitted to stock exchanges
• Key Executives: MD & CEO Ajay Kanwal and department heads
• Document Availability: Will be posted on the bank's website
• Signed by: Lakshmi R. N., Company Secretary & Compliance Officer
Bank Transformation and Growth
• Transitioned to a diversified, secured bank
• Secured business: 59% of portfolio
• Liability growth outpacing asset growth
• Improved net interest margin
• Strong asset quality with net NPAs at pre-COVID levels
• 781 outlets across 24 states, focus on unbanked rural areas
Customer Base and Product Diversity
• Customer base increased from 4.6 million to 5.21 million
• Diverse asset products: micro loans, affordable housing, MSME loans, two-wheeler financing
• Low loan-to-value (LTV) ratios at 34.2%
• Resilience in secured advances, especially property-backed loans
• 38% business in top three cities
Risk Management and Operational Strategies
• Focus on credit risk management and digitization
• Unique scorecard system for lending
• Investment in advanced portfolio analytics
• Sudhir Madhavan appointed as new Business Head for Retail Financial Services
Microfinance Strategy
• Shift from group to individual loans post-demonetization and COVID-19
• Rigorous credit underwriting with 20-25% rejection rate
• Expanded rural presence from 25% to 35%
• Paperless onboarding and increased digital payment adoption
Affordable Housing Business
• "HOME 360" strategy for comprehensive financial products
• Competitive advantage with 100% LTV on two-wheeler loans
• Strong customer relationships and high CASA penetration
Financial Metrics and Growth
• 36% year-over-year increase in deposits
• Improved loan-to-deposit ratio (LDR) from 108.5 to 104.5
• Digital infrastructure supports 99% onboarding and 98% transactions
• Record high ROE exceeding 20% and ROA of 1.7%
• PAT grew by 99% post-IPO
Strategic Insights and Future Outlook
• Aim to maintain ROE in 15-20% range
• Cautious growth strategy prioritizing risk quality
• Anticipated lower credit costs due to secured loan growth
• Recovery efforts for written-off loans estimated at INR 3,000 to 4,000 crores
Analyst Inquiries and Management Responses
• Discussion on loan cross-collateralization and risk management
• Insights on deposit growth strategies and branch relocation
• Emphasis on sustainable growth and cautious regional approach
• Confidence in growth potential and operational efficiency
Conference Call Summary
Cashless Collection Methods
• Nearly 99% of collections are digital
• Only 8-10% require physical visits
Other Income Components
• Includes processing fees, liabilities income, recoveries, and PSL income
• Shift from unsecured to secured loans may impact income
• Decline in recoveries compared to previous year, but sizable recovery expected
Individual Loan Book
• Average ticket sizes: INR 45,000 to INR 60,000
• Maximum loan for home improvement: INR 1.25 lakhs
• Cost of deposits at 7.6%
• PCR at 67.9%, covering secured loans
• Stable NPA outlook
Branch Relocation Costs
• Costs for relocating 29 branches discussed
• Primary cost factor: change in rental expenses
• Marginal increase in rental costs expected
• Relocation of 215 branches to take at least two years
Conclusion
• Ajay Kanwal thanked participants and invited further questions.