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Dewan Housing Finance is a 25 Year Old Company which has continually striven to reach out the vast majority of Indians to provide them Financial Access to make a home of their own.
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Problems affecting the largest number of people has the least attention paid to it
-Aristotle
It has been exactly the same
in the Indian housing context
The Housing Requirement
The total housing requirement of the country is 200-225 million units • Current status: Available 170 million
house, a shortage of approx 30-55 million.
• In next 15-20 years, additional 70 millions houses would be required
Year 2020 - 100 million additional houses required.
FactsReturns from realty in India are at an average of 14% annually. Merrill Lynch forecast India real estate sector to grow from $12 billion in 2005 to $90 billion in 2015. Housing is expected to account for nearly 90% of real estate sector.
% share of urban population has up from 10.8% in 1901 to 27.8% in 2001 and it is expected to grow faster than rural. In 2001 more than 5000 centers identified as urban centers – 2001 census.
By 2015, 20% (222 million) of total population will reach the 22 early 30 age bracket. Keeping 0.89% mortality rate and average size of household equal to 3, 68 million household will require independent housing—age demographic effect. Taking 30-49 age group, total demand will be much more.
Housing shortage in India: Total housing shortage for period 2007-12, 73.96 million out of which rural housing shortage 47.43 million.
Source: NHB
Segmentation of Indian Households
Figures in brackets indicate annual household incomeSource: Business world, NCAER
1 US$ = Rs 44
Source: National Council of Applied Economic Research, 2005
DHFL’S Prime Customer
Factors affecting housing demand
Population GrowthPopulation > 1 billion people, 191 million households in 2001.Population growth has been 1.5% in 2000-2010.
Nuclearisation Primarily due to employment related
migrationIt reduces the area per household but
increases the overall household formation
AffordabilityIncome growth: With increasing incomes
the per capita floor space area increasesAvailability of finance: Increasing housing
finance penetration with low interest rates drives the boom in house purchase
Tax benefits: Principal & Interest repayment attracts customers for housing finance.
UrbanizationShare of urban population has increased
to 27%.Urbanisation reduces the area per
household but leads to increasing number of nuclear families resulting in formation of more number of households
Housing
Demand
Movement in housing price indexMovement in interest & home loan rates
Growth in economy
Financial savings
India still underleveraged India’s Mortgage/GDP ratio is lowest amongst Asian peers:•India’s mortgage debt in FY ‘07 stood at 6% of GDP ~USD 60 Billion on a GDP of ~USD 1 Trillion •China @ 10%, Philippines @ 12%, Thailand @ 16%, Hong Kong @ 48%, Singapore @ 61%
Ascending Housing Finance penetration in both urban (currently 35%) and rural (currently 7%) India due to:
•Growth in branch network, increasing incomes, evolving demographic profile, and increasing acceptability of loans amongst customers due to high rise in property prices
•Disbursements in the last 3 years account for ~71% of the total outstanding portfolio
•Penetration is expected to go up to 41% in urban India and to 11% in rural India by FY ’12
Data Source: CRISIL, Industry Reports
The housing dreams of theIndian middle & lower income groups
a challenge for the system
The Challenge
An under-serviced segment finding the gap between desire & reality
wider
Affordability Accessibility
•Increasing average cost of housing
•Increasing interest rates
•Regulatory issues (ULCA, Rent Control Act, Stamp Duty, etc)
•Arranging own contribution
•Credit risks : no pay slips, no tax returns, uncertain cash flows
•Absence of Clear titles
•Higher transaction costs
The DHFL Mission
Every Indian must have
Access to affordable, good
quality Housing
The DHFL Action
Purpose
Enabling access to home ownership
Target Segment
The low and middle income household
Strategy
Reach out to larger number of customers with smaller loans instead of servicing a small number of customers with large loans.
Creating a Customer Centric Organization
Techn
olo
gy
EMPL
OYE
E
PROCESS
Our Core Customers
Comprising of groups who do not ‘fit’ into the formal frameworks of normal
banks and HFC’s considered ‘risky’ by them
They may have financial handicaps, but they have
integrity & self worth
The low & middleIncome segments
Our ProcessFocus is on forging relationships with our customers
Direct contact with customers at every stagebusiness generationproperty verification
collection and recovery
Relationship officers in charge of every account
Predictability of service as well as Speed of service
Our TechnologyRegular up gradation of technology to ensure
systems and processes deliver on time
Integrated loan management system to service customers
Enabling capture and retrieval of a large number of customer variables
Facilitates building of predictive models for
understanding credit behavior
Our Employees
Ordinary people who do extraordinary workAll fired by the values of Company mission
Periodic training & skill up-gradation in conjunction with our
customer profileEmphasis on quality, timely delivery and resolution of consumer
issues
A robust performance appraisal system with prime focus on motivating, and career planning
well Recognized & well Rewarded
Our ProductsDeveloped & designed to meet the requirements of our customers : •Plots•Construction•Purchase of flats •Extension & Improvement Loans•Project Loans
Commercial loans including•Lease Rental Financing •Mortgage Loans•Non Resident Property Loans
Built in protection plans offeringCover for loss of job Life cover against accidents and untimely demiseProperty cover against natural calamities
1st Housing Finance Company in India to offer reverse mortgage to senior citizens
Our Reach
DHFL’s captive distribution network covers 190 locations
Tie-Ups with Public Sector Banks provide reach to an additional 85 locations
Acquisition of the housing finance arm of ING Vysya bank covering 25 locations
An Extensive Pan–India Network300 locations across the country
Alliances
Punjab & Sind Bank (“PSB”)Established in 1908, the Punjab & Sind bank has 905 branches / extension counters spread across India DHFL is presently addressing 45 locations with PSB in the states of Punjab, Haryana, Himachal Pradesh, and Jammu & Kashmir in Northern IndiaDHFL intends to scale up the location coverage to 200 with PSB
United Bank of India (“UBI”)Formed out of the amalgamation of four small banks of Bengal in December 1950, the Bank presently has ~1,500 branchesUBI played a significant role in the spread of banking services in different parts of the country, more particularly in Eastern and North-Eastern regions of IndiaDHFL is presently addressing 40 locations with UBI across the Kolkata and Howrah regions DHFL intends to scale up the location coverage to 500 with UBI
UAE ExchangeTie – up with UAE Exchange, Abu Dhabi to reach out to the vast NRI population in the UAE & GEC Countries
Tie-ups
Trust Repaid
DHFL is the second largest housing finance company in the Indian private sector
From a modest beginning in 1984,
Fulfilling the housing needs
Over 2,00,000 families
Asset
INR 6394.51Crs
NPA levels
levels lowest in the industry at 1%
Future PlansBoost Network
New Products
New Segments
Improve Margins
Alliances
This is also expected to help in regional diversification of DHFL’s asset book
DHFL is looking at cross selling of innovative consumer finance products to existing creditable borrowers
DHFL plans to come up with various products for the self employed segments that have largely remained unaddressed by most financial institutions
•Better capital management to reduce funding costs•Technology to support scalability and operational efficiency
•Diversification of regional portfolio concentration•Ready customer base which can be exploited via cross selling initiatives and value added services
Business PerformanceINR Mn (Consolidated) FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘09
Total Interest Income 1,786.2 2,447.2 3,568.1 5,539.3 7,311.5
Total Interest Expense 1,147.4 1,586.5 2,466.8 3,882.3 5,221.7
Net Interest Income 638.8 860.8 1,101.4 1,657.0 2,089.8
PAT 313.0 455.8 538.2 866.6 970.5
Asset Book 16,701.1 24,867.8 35,531.8 44,690.4 61,358.5
Net Worth 1953.5 2766.0 3731.0 4543.9 5251.5
Borrowings 16,688.7 24,371.9 34,402.8 42,587.2 61,760.7
Capital Adequacy Ratio 16.5% 13.3% 14.1% 17.0% 16.2%
Sanctions 8,003.9 13,551.4 16,163.1 21,275.3 27813.50
Disbursements 6,804.1 11,988.6 15,728.8 18,677.2 23387.60
Net Interest Margin (NIM) (%) 3.2 3.1 3.0 3.0 2.9
Net NPA’s (%) 1.3 1.3 1.2 1.1 1.0
BOOK VALUE (Rs.) 38.0 50.0 56.0 59.2 84.4
Key Growth Parameters
FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘092.6
2.8
3.0
3.2
3.43.2
3.13.0 3.0
2.9
Net Interest Margin %
FY ’05
FY ’06
FY ‘07
FY ‘08
FY ‘09
1,786.2
2,447.2
3,568.1
5,539.3
7,311.5
Series1 638.8
860.8
1,101.4
1,657.0
2,089.8
Net Interest IncomeTop Line
Top line has grown at CAGR of 42.2% .
Net Interest Income has grown at CAGR of 34.5%.
Fig. in INR Mn
Key Growth Parameters (contd.)
FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘09
8003.913551.4
16163.121275.3
27813.5Sanctions
Sanctions have grown at CAGR of 36.5%.
FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘09
6804.1
11988.615728.8
18677.2
23387.6Disbursements
Sanctions have grown at CAGR of 36.16%.
FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%
1.3% 1.3% 1.2%1.1% 1.0%
Net NPA's
FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090.0%
5.0%
10.0%
15.0%
20.0%
16.5%13.3% 14.1%
17.0% 16.2%
Capital Adequacy Ratio
Key Growth Parameters (contd.)
FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090.0
200.0
400.0
600.0
800.0
1000.0
1200.0
313.0455.8
538.2
866.6970.5
PAT (in INR Mn)
FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090.0
10.020.030.040.050.060.070.080.090.0
38.050.0 56.0 59.2
84.4
Book Value (in Rs.)
FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090
10000200003000040000500006000070000
16701.0999999999
24867.835531.8
44690.4
61358.5Asset Book (in INR
Mn)
FY ’05 FY ’06 FY ‘07 FY ‘08 FY ‘090
10000200003000040000500006000070000
16688.724371.9
34402.8 42587.2
61760.7Borrowings (in INR Mn)
PAT has grown at CAGR of 32.7%.
Book Value has grown at CAGR of 22.1%.
Asset Book has grown at CAGR of 38.4%.
Borrowings have grown at CAGR of 38.7%.
The
JourneyHas just
begun
With changing Indian scenario and more dreams in their eyes, our target audience is having
aspirations stoked to fever pitch.