Highlights:

The company follows "One ABC One P&L" approach, while continuing to focus on quality and profitable growth, in order to maximise share of opportunities in the financial services space.

The company has a strong presence across Protecting, Investing, Financing and Advising with a customer centric approach

Strong parentage and extended ABG and ABCL ecosystem provide multiple opportunities to accelerate growth.

The company follows an omni channel approach towards distribution. The company believes in giving complete flexibility to customers to choose the channel through which they wish to interact.

Customer franchise continues to grow well and the company acquired 1.4 million customers in Q3 taking active customer base to about 43 million end December 2022.

The company added 62 branches during the quarter and total branch count now stands at 1,220. The branch expansion is targeted at driving penetration into tier 3 and tier 4 towns.

Board approved the formation of a wholly owned subsidiary to develop an omni-channel D2C platform with various touchpoints such as, app, web, branch and virtual engagement.

The company has launched B2B platform for MSME ecosystem in a closed user group and it will go live in the next 20-30 days.

The company has more than 2 lakh channel partners and in the next nine months the company will also be rolling out a B2D digital integrated platform for channel partners which will provide them opportunities to grow their business volumes and enable them to fulfill the life cycle needs of customers.

Digital First approach is at the core of business strategy for product innovation, direct acquisition, seamless onboarding and best in class service delivery.

About 79% of digital lending business happens using Machine Learning scorecards.

In life insurance cross sell & upsell now contributes 35% of individual first-year premium.

In health insurance business, 24% of retail fresh premium originates from cross sell.

About 78% of life insurance renewals happen digitally and 88% of Life Insurance customer requests are serviced digitally.

NBFC

NBFC business continued with a strong momentum of disbursements and granularization of book. Disbursements grew by 98% yoy to Rs 13099 crore Rupees, boosting loan book growth to 47% yoy and 12% sequentially to 72,994 crore Rupees.

Loans to Retail, MSME, SME and HNI segments now constitute 66% of portfolio.

NIM increased by 41 bps sequentially and 77 bps yoy to 7.00% in Q3 of FY23.

The company continues to maintain strong focus on asset quality, with gross stage 2 and 3 assets reducing by 156 bps sequentially and 491 bps yoy to 6.49%. The provision coverage ratio on stage 3 assets was 49.3%.

Overall collection efficiency is at 99.6%.

NBFC continue to expand physical footprint and added 51 new branches in Q3 taking footprint to 272 and the targets 325 branches by March 2023.

About 99.8% of the restructured is already banked end December 2022. Further, collection efficiency on the restructured pool is healthier than last quarter.

The company sees a good growth momentum going forward as well.

As the company goes more into the retail and the MSME, the credit cost will go up in line with the margins. In the near term, credit costs should be in the range of 1.5-1.6% level.

One-time ECL impact is 42 bps on Stage 1 in Q3FY2023.

Housing finance

In Health Insurance business, all distributors are now onboarded digitally and 85% of business is delivered by auto-underwriting.

In Housing Finance Business, disbursements increased 12% sequentially and 25% yoy to Rs 1387 crore Rupees in Q3 of FY23.

The loan portfolio grew by 3% sequentially and 11% yoy to Rs 12874 crore.

NIM of the housing finance business increased by 22 bps sequentially and 106 bps yoy to 5.35% in Q3 of FY23.

Portfolio health has improved where the gross stage 3 loans have reduced to 3.50% end December 2022. Stage 2 and 3 loans have reduced by 60 bps qoq and 158 bps yoy.

The company is rated AAA by ICRA and India Ratings and continue to focus on diversified long-term borrowings.

The contribution of NHB borrowing has increased to 17% in Q3FY23 from 8% in Q3FY22.

The company has a 25% liability book at fixed rate which helps to mitigate the cost in an increasing rate cycle.

The company is confident of maintaining competitive borrowing mix considering growth trajectory and improving asset quality.

The company has been able to sustain NIM at 5.35%. Going forward, NIM will be range bound between 4.7% to 4.9% considering the lagged impact in borrowing cost and competitive intensity.

Mutual Fund

Overall quarterly Average AuM for the quarter ending December 2022 stood at Rs 2.93 lakh crore.

Mutual Fund quarterly average AUM was at Rs 2.82 lakh crore with market share of 7.9% excluding ETF.

Equity Mutual Fund AUM mix was at 42.6%.

The company continued focus on building retail customer franchise with addition of about 0.5 mn folios in the 9MFY23. The total active folios now stand at 8.0 mn.

Monthly SIP book increased from Rs 892 crore in December 2021 to Rs 942 crore in December 2022 from around 32.6 lakhs live SIP account.

Passive AUM grew by 28% sequentially and was about Rs 21620 crore end December 2022.

Life Insurance

The growth momentum in life insurance business continues with Individual FYP growth at 25% against the private industry at 19%.

The individual business has come with a very healthy product mix. Traditional business share was at 77% and the ULIP business at an all-time low of 21% which augured well for the gross margins.

Renewal premium grew 14% yoy, to reach Rs 4870 crore in 9MFY23.

About 29% of business comes from upsell to existing customers and has helped productivity growth in both the proprietary as well as the partnership channels.

The company continues focus on Credit life business which is growing at more than 100% over last year.

Asset under management is close to Rs 68000 crore with a growth of 15%.

VNB margin was 15.5% in 9MFY23 and the company is well on track to deliver over 18% net VNB margin in FY2023.

Health insurance

The company is the fastest growing health insurer in the country, well ahead of industry growth at 20% and SAHI growth at 26%.

Health insurance business delivered industry leading growth of over 59% yoy in 9MFY23 and expanded its market share by 220 bps yoy to 10.4% in 9MFY23.

The growth was powered by retail franchise which grew at 30%.

Corporate business continues to do very well and grew at a staggering 151% powered by a huge focus on cross sell and upsell and also opening up new category like Corporate OPD. The company believes it has set up one of the most profitable corporate business in the industry.

The combined ratio has come down to 114% for 9MFY23. The loss has reduced to Rs 217 crore in 9MFY23 from Rs 283 crore in same period last year.

Overall, a higher scale will continue to create operating efficiencies as the company move ahead.

Total bank partnerships increased to 18 and strongly supplements growth aspirations.

The company continues to grow agency franchise with more than 80,000 advisors across 200 plus branches leveraging the One ABC branch strategy completely.

The company is now confident on surpassing guidance of the 40% growth aspiration for FY23.