#1DIFFERENT PEOPLE, DIFFERENT NEEDS. AND ONE THING CONNECTS THEM ALL. The POWER to Dream Bigger ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Investor Presentation | November 2023#2Safe Harbor ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking This presentation and the accompanying slides (the "Presentation"), which have been prepared by ESAF Small Finance Bank Limited (the "Company'), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded. Certain matters discussed in this Presentation may contain statements regarding the Company's market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and world-wide, competition, the Company's ability to successfully implement its strategy, the Company's future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cashflows, the Company's market preferences and its exposure to market risks, as well as other risks. The Company's actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third-party statements and projections. All Maps used in the Presentation are not to scale. All data, information and maps are provided "as is" without warranty or any representation of accuracy, timeliness or completeness. 2#3Company Overview#4Company Overview ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking ESAF Foundation (formerly known as Evangelical Social Action Forum) was founded by ESAF SFB's individual promoter, Mr. Kadambelil Paul Thomas, along with others, in 1992 o With roots of micro-financing business tracing back to 1995; ESAF SFB along with its promoters has over 28 years of experience in the Indian MFI space primarily serving the unserved and underserved ○ ESAF Financial Holdings Private Limited transferred its lending and financing business to ESAF SFB pursuant to the business transfer agreement dated 22 Feb 2017 Kadambelil Paul Thomas 6.94% Structure as on Sep 30, 2023 ESAF Financial Holdings Private Limited 62.46% Dia Vikas* (19.99%) SIDBI** (11.17%) 31.16% ESMACO Total Business (AUM + Deposits) * 34,906 crs Advances under Management (AUM) * 17,490 crs Deposit * 17,416 crs ESAF Small Finance Bank 63.49% Others¹ 5.35% ESMACO & Others 2 5.03% Vision "To be India's leading social bank that offers equal opportunities for the whole society through universal access and financial deepening, thus promoting financial inclusion, livelihood and economic development as a whole" Mission "To provide responsive banking services to the underserved and un-served households in India facilitated by customer-centric products, high quality service and innovative technology." Other Shareholders 25.57% Promoter/ Promoter Group entities Public shareholders ¹Other Shareholders include ESAF Staff Welfare Trust, Cedar Retail Pvt Ltd. and Individuals; ^Others include ESAF Staff Welfare Trust and other individuals 2Others include individuals forming part of the promoter group *Dia Vikas Capital Private Limited **SIDBI Trustee Company Limited - A/C Samridhi Fund 4#5Journey So Far ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking ESAF Small Finance Bank Limited ("ESAF SFB") is one of the 12 awardees of the SFB licenses as of Sept 30, 2023 Over the years it has expanded its geographical coverage and product offerings (both assets & deposits) ○ 1992 ESAF Foundation founded by Mr. Kadambelil Paul Thomas along with others О 1995 ESAF Foundation started its microloan activities 2004-10 1992-98 о Microfinance business undertaking of ESAF Foundation was transferred to ESAF o 2015 - RBI in- principle approval to establish a small finance bank ("SFB") Financial Holdings Private Limited ("Corporate 2011-15 Promoter") О ESAF SFB included in the second schedule of the RBI Act О Crossed 2 Mn borrowers Becomes member of Global Alliance for Banking on Values 2016-17 o Crossed 100 branches in aggregate 2019 - Q2 2024 ○ 2016 Final approval to establish and carry on business as an SFB o Transfer of lending & financing business undertaking of Corporate Promoter to ESAF SFB ESAF SFB commences banking operations BANK 2018 о Set up extensive network of 700 banking outlets, 854 customer service centres, 25 business correspondents, 2,332 banking agents, 615 business facilitators and 579 ATMs spread across 21 states and two union territories. o Total business crosses 34,906 crs Crossed 7.51 Mn Customers o Esign-loan documents ○ Agent banking 5#6Successful IPO Listing Overwhelming subscription of 77 times with a listing day gain of ~19% ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Shareholding Pattern As on 9th November 2023 (Post Issue) 10 00 Inited on SMALL FINANCE B Joy of a 10:00 Mited on 9 ESAF ALL FINANCE BAN ESAF BSE о Ο November 2023 Listing done on BSE & NSE IPO Price: 60 per share 21.3% 2.2% 13.1% 63.4% Listing Price: NSE 71.0 per share BSE 71.9 pershare Promoter & Promoter Group FII DII Other Public Listing day gain: ~19% Net Proceeds of the Issue: 348.3 crs (Gross Proceeds of 390.70 crs less estimated issue expenses of 42.42 crs) IPO Subscription Category Times Subscribed Objects of the Issue: Net Proceeds will be utilized to augmentation of the Bank's Tier-I capital base to meet the Bank's future capital requirements and to ensure compliance with regulatory licensing conditions. QIB 182.6x NII 88.8x RII 17.8x Employee 4.6x Total 77.0x ESAF SFB Listing done at Valuation of ~ 3,088 Crs based on Upper price band on 10th Nov 2023 CO 6#7A social business driven by providing "Joy of Banking" to customers ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking ESAF SFB has adopted a triple bottom line approach towards business in line with the motto - 'fighting the partiality of prosperity'. The triple bottom line approach of ESAF SFB focuses on the following 3 Ps: Social Impact Environment Impact People Promoting financial inclusion and gender equality through specialized financial services Planet The protection of the environment and ensuring sustainable development 1 ESAF SFBS main focus is on unbanked and under- banked customer segments, especially in rural and semi-urban areas, as well as catering to all customer segments $ Economic Impact ESAF SFBS business model focuses on the principles of responsible banking, providing customer-centric products and services through the innovative application of technology Prosperity Establishing a governance framework to ensure accountability, transparency and compliance with internal and external ESG standards ESAF SFB has a strong focus on leveraging technology to deliver products and services and it continuously works towards improving its customers' experience through the use of technology 7#8Sustainability & ESG Performance - ESAF SFB's social business strategy 2 SSS ESAF BANK ŵ Vyapar Vikas Yojana for small business ++ इसाफ़ सौभाग्य रेकरिंग डिपॉज़िट INTRODUCING ++ ESAF \CLEAN EZERGY LOANS hrudaya deposit SA social impact environmental impact economic impact сл 5 8 9 10 11 12 8 Siz ESAF BANK FIG LOAN FARMERS INTEREST GROUP 13 14 15 16 17 ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Pursuant to the ESG policy, ESAF SFB is committed to (i) the protection of the environment and ensuring sustainable development (ii) promoting financial inclusion and gender equality through specialised financial services (iii) establishing a governance framework to ensure accountability, transparency and compliance with internal and external ESG standards Care Edge ESG Rating ESG 3 (good) Overall score of 71 compared to industry average of 59.8 8#9Business Snapshot ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking 5,505 Operational ATM 25 21 States and 2 UTS 700 Banking Outlets 7.51mn Total Customers Employees Business Correspondents 579 ATMs 854 Customer Service Centers 2,332 615 Banking agents Business facilitators AUM: 17,490 cr Asset Profile Micro Loans - 73.5% $ AUM Growth (YoY) Sep-23-37% Asset Quality GNPA - 2.6% Retail Loans - 17.0% $ FY23 -32% NNPA - 1.2% Other Loans - 9.5% CASA (% of total Deposits Growth (YoY) Liability Profile Deposits: deposits) Sep-23-29% % * 17,416 cr 18.04% FY23 - 14% Financials Yield on Advances: Sep 30, 2023 - 21.1%* FY23-19.6% (CA: 1.5%, SA: 16.5%) Concentration Top 20 largest Depositors 9.9% Shareholders' Funds: PAT: 1,979 cr H1 FY24 270 cr FY23-302 cr $ CRAR 20.6% (Tier 1 - 18.2%) NIM: Sep-23 11.0%* FY23 - 10.0% Data as of September 30, 2023, unless specified, Micro Loans comprise of microfinance loans and other micro loans, Other Loans consists of MSME loans, loan to financial, institutions and agricultural loans *Annualized Sep-23/FY23 ROA: 2.54%* / 1.6% ROE: 29.32%* / 19.7% 9#10Extensive Geographical Footprint ESAF SFB has a large national footprint with presence in 21 states & 2 UT I Banking Outlets (Nos.) ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Reduced Home State Concentration (% of Gross Advances) Name of the State/Union BOS ATMs CSC I I Territory Mar-21 Sep-23 Andhra Pradesh 3 3 6 Ladakh Jammu Himachal Assam 3 2 10 Pradesh & Kashmir Bihar 10 10 22 Uttarakhand New Delhi Punjab Chhattisgarh 35 27 31 Arunachal Chandigarh Gujarat 5 Haryana 52 9 58 Haryana Assam Pradesh Sikkim 700 700 44.0% 550 575 56.0% 6 Jharkand 15 14 5 Rajasthan Uttar Pradesh Nagaland Bihar OO Kerala 40.5% 59.5% Kerala Karnataka 26 19 107 Meghalaya Manipur Jharkhand I I Mar-21 Mar-22 Mar-23 Sep-23 Kerala 304 281 25 Gujarat Madhya Pradesh W.Benga Mizoram Madhya pradesh 68 45 90 I Tripura Maharashtra 71 53 118 Maharashtra Meghalaya 1 0 0 Odisha Chhattisgarh I I New Delhi 9 Odisha 10 89 1 Telangana 7 55 Split of banking outlets across locations Gross Advances by States (Sep-23) Goa Karnataka Andhra Pradesh Rajasthan 9 2 37 I States/UTS 23 Tamil Nadu 97 82 130 I Puducherry 11.0% Telangana 4 4 6 Kerala Tamil Nadu Banking Outlets 700 Kerala 40.5% ATMs 579 I Tripura 3 0 6 12.0% I Union Territory CSC 854 1 1 0 Tamil Nadu Maharashtra 22.1% 8.8% Of Chandigarh Sept-23 Banking Agents 2,332 Union Territory I 60.0% 17.0% Madhya Pradesh 6.7% 3 1 1 Of Puduchery Business Correspondents 25 Uttar Pradesh 9 8 48 Uttarakhand 3 1 6 Business Facilitators Karnataka Chattisgarh 7.6% 2.8% 615 West Bengal 5 4 86 Others 11.6% Grand Total 700 579 Semi Urban Urban Rural Metro 854 62% of the Banking Outlets network in south India contributes 86% of deposits and 71% of gross advances 10#11Financial Performance#12AUM & Disbursement Mix I 23.0 23.0 I 12,764 433 530 1,953 AUM Mix (Crs) Disbursements Mix (Crs) ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking 23.3 I I 24.6 I 25 | 4.1 6.1 I 8.6 I 6.4 I 4.8 I 17,490 17,204 849 16,331 784 816 688 770 774 +37.0% 2,798 2,978 13,351 2,615 513 542 2,216 12,851 12,847 2,291 73 12,255 120 9,848 10,080 784 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Agricultural loans MSME loans & Loans to financial institutions Retail loans Micro Loans י-ן LIAum per Banking outlet ( Crs) 1,314 Q2FY23 3,521 136 133 892 2,360 Q3 FY23 6,043 250 330 1,421 4,509 198 132 1,221 3,345 185 189 +46.0% 1,017 4,042 2,959 1,955 Q4FY23 Q1FY24 Agricultural loans MSME loans & Loans to financial institutions Disbursements per Banking outlet (* Crs) Q2FY24 Retail loans Micro Loans 12#13Key Profitability Metrics Net Interest Income (* Crs) 585 597 499 451 437 Non-Interest Income (* Crs) ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking 94 93 81 79 +36.4% 65 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Pre-Provision Operating Profit (* Crs) 239 219 211 301 290 +37.4% 58 37 Profit After Tax (* Crs) 140 130 101 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 +21.5% +143.3% 13#14Key Profitability Ratios Margins* (%) 21.0% 21.1% 19.5% 19.6% 19.8% 56.4% 55.9% 11.3% 9.7% 9.9% 10.4% 11.0% 6.3% 6.2% 6.4% 6.9% 7.3% Q2FY23 Q3FY23 Q4FY23 Q1FY24 1.3% 0.8% Yield on Advances NIMS Cost of Funds ROA* (%) Cost to Income (%) 58.0% ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking 55.7% 56.4% Q2FY24 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 ROE* (%) 2.6% 29.9% 2.5% 28.7% 29.3% 29.4% 2.2% 25.3% Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 * Annualized 14#15Asset Quality & Capital Adequacy 8.1% 7.2% GNPA & NNPA (%) Total Assets & Risk Weighted Assets (* Crs) ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking 22,368 20,224 20,796 18,248 18,345 4.3% 3.7% 9,347 9,705 10,085 8,087 8,444 2.5% 2.6% 1.7% 1.1% 1.2% 0.8% Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 GNPA NNPA Q2FY23 Q3FY23 Q4FY23 Total Assets Q1FY24 Q2FY24 Risk Weighted Assets PCR (%) Capital Adequacy (%) 74.4% 69.6% 70.5% 63.5% 21.2% 20.3% 19.8% 20.6% 20.6% 56.7% 18.8% 18.0% 18.1% 19.0% 18.2% Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q2FY23 Q3FY23 Q4FY23 CRAR Tier 1 Q1FY24 Q2FY24 15#16Key Balance Sheet Metrics. Shareholders Funds (* Crs) Gross Advances (* Crs) ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking 15,123 1,979 14,118 14,444 1,839 1,709 12,544 1,570 1,608 +26.0% 11,856 +27.6% Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Total Deposits (* Crs) CASA Deposits (* Crs) 17,416 15,656 14,666 13,520 13,412 28.8% 3,069 2,874 2,878 2,761 2,615 170 199 264 237 264 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q2FY23 Q3FY23 Current Account Q4FY23 Q1FY24 Savings Account Q2FY24 16#17Key Strengths#18Key Strengths Multi-Nodal Delivery Channels Strong Rural And Semi-Urban Banking Franchise Rapid Asset Growth with continuous focus on Core Segment & Retail Growth ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Robust Funding Profile and Healthy Capital Adequacy Technology Driven Model With An Advanced Digital Technology Platform Centric Approach Customer Centric Approach Best-In Class Banking Products and Services Experienced Management Prudent Risk Management Clearly Articulated Strategy Team & High Quality Board. 18#19Multi-Nodal Delivery Channels ○ Multiple channels for servicing the customers in an efficient manner Banking Outlets o Provision for full-fledged banking product & services o Branch Operations 。 BC network allows dual advantage . · Better understanding of customer requirements Constant engagement with micro loan customers helps to keep delinquencies in check o Digital channels viz. internet banking and mobile banking offerings in line with the evolving technology in banking industry Business Correspondents (BCS) ○ Sourcing and servicing of customers for micro loans, mortgage loans, vehicle loans, MSME loans, agricultural loans, select deposit and third-party products o 25 Institutional Business Correspondents Gross advances sourced/serviced through BCs (as on 30 Sep 2023) • Growing ATM network T 74.3% H $ ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Digital Banking ○ Application (compatible with Android and iOS) that connects with the National Payments Corporation of India's unified payments interface platform o Enable customers to pay bills, transfer funds to other banks instantaneously and use scan and pay facilities at merchant outlets o Miss call Banking o WhatsApp Banking 1 I I I I I I I I I I I I I I I I I I I I I I ATMs and Debit Cards I I I ○ 579 ATMs o RuPay branded ATM-cum-debit cards ATM count I I I I I I I 528 579 I I 386 I 318 I I I I Mar-21 Mar-22 Mar-23 Sep-23 I I 19#20Strong Rural And Semi-Urban Banking Franchise ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Low penetration of banking credit in rural areas Rural share of GDP contribution (Mar-23) Rural share of Credit outstanding (Q1FY24) 47.0% 8.0% O O Source: CRISIL MI&A Report Focus on increasing credit in the rural & semi-urban areas has remained low Rural share of Credit outstanding (Q1FY24) 66% 62% 12% 13% 15% 17% 7% 8% Rural Semi-Urban Source: CRISIL MI&A Report Urban Metropolitan FY18 Q1FY24 Strong rural and semi-urban franchise of ESAF to take advantage of the growth opportunity in the under-penetrated rural and semi-urban market Majority of advances in rural & semi-urban regions As of Sep-23 (% of Gross Advances) Focusing on rural & semi-urban areas in the liabilities profile Footprint in Rural & Semi-urban 39% O 7.0% 6.4% 6.4% 6.2% 45.4% 41.9% 45.1% 46.1% Rural & Semi-Urban 38.3% 39.4% 39.2% 34.9% Urban & Metropolitan 61% 9.4% 12.3% 9.3% 12.9% Mar-21 Mar-22 Mar-23 Sep-23 Rural Semi Urban Urban Metro 55.9% Customers in rural and semi- urban areas 71.7% Banking outlets in rural and semi- urban areas 20#21Rapid Asset Growth with continuous focus on Core Segment & Retail Growth ++ ESAF 8,415 ESAF SMALL FINANCE BANK Joy of Banking As of September 30, 2023, ESAF SFB had over 7.51 mn customers with Micro Loans, the majority of whom were women Gross Advances have grown rapidly (* Crs) Continued focus on Micro Loans segment with Increased Retail Diversification 0.1% 2.6% 4.2% 3.7% 4.9% 4.3% 4.7% 4.7% 11.4% 11.9% 15,123 +79.7% 16.0% 17.0% 14,118 12,131 84.8% 81.2% 75.0% 73.5% Mar-21 Mar-22 Mar-23 Sep-23 Mar-21 Mar-22 Mar-23 Agricultural Loans MSME & loans to financial institutions Sep-23 Retail Loans Micro Loans 21#22Robust Funding Profile and Healthy Capital Adequacy Deposits growth (* Crs) 17,416 +93.5% 14,666 12,815 9.1% 8,999 % deposits from top 20 largest depositors 15.9% ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Retail share of deposits (*Crs) 98% 94% 91% 89% 15,485 9.8% 9.9% 13,346 12,046 8,819 Mar-21 Mar-22 Mar-23 Sep-23 Mar-21 Mar-22 Mar-23 Sep-23 Mar-21 Mar-22 Mar-23 Sep-23 Capital Adequacy 24.2% 2.7% 18.6% 19.8% 1.7% 20.6% 2.4% 2.4% 21.5% 16.2% 18.1% 18.2% Mar-21 Mar-22 Tier-2 capital Mar-23 Tier-1 capital Sep-23 * Annualized Cost of Funds 7.6% 7.0% 6.3% 6.2% Mar-21 Mar-22 Mar-23 Sep-23* 1 Cost of average borrowings, which is a non-GAAP financial measure, represents the ratio of interest expended on borrowings to average borrowings calculated on the basis of the average of the opening balance at the start of the relevant fiscal year and the closing balance as at the quarterend for all quarters in the relevant fiscal year. All of the borrowings are interest-bearing. 2Cost of Funds, which is a non-GAAP measure, is the ratio of interest expended to Average Total Interest-Bearing Liabilities. Average Total Interest-Bearing Liabilities are total interest-bearing liabilities (comprising demand deposits, savings bank deposits, term deposits and borrowings) calculated on the basis of the average of the opening balance at the start of the relevant fiscal year/period and the closing balance as at quarter end for all quarters in the relevant fiscal year/period. +75.6% 22#23Technology Driven Model With An Advanced Digital Technology Platform ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking ESAF SFB has continuously worked towards improving its customers' experience through the use of technology. Such initiatives have enabled the Bank to deliver improved customer service in a cost effective manner CASHLESS DISBURSEMENT Various digital platforms including an internet banking portal, a mobile banking platform, SMS alerts, bill payments, etc. for all banking and payment transactions like remittances, utility payments, etc. DIGITALISED CENTRAL CPU Digitalised central credit processing unit for Micro Loans using inputs from credit bureau and customer data analytics for underwriting & credit sanctioning CUSTOMER SERVICING VERNACULAR SUPPORT 24/7 call center facility with multi-lingual agents. All calls are recorded and made available for monitoring, quality control and reference purposes by customer service quality department CASHLESS DISBURSEMENT Implemented technology solutions that enable the company to ensure cashless disbursements of loans. The collections mechanism has also been digitalised through the use of mobile applications REDUCED TAT Digitalised account opening & loan underwriting process by using tablets contributing to reduced turnaround time and better services to customers E-SIGN For better customer service and environment conservation ESAF SFB introduced E sign for micro loan disbursals 23#24Customer Centric Approach. • Home loans · Agri-loans Products to meet customers' life-cycle needs I Loan against property • Personal Loans Customer service measures 24*7 CALL CENTRE • Vehicle Loans I • Gold Loans Multi-lingual assistance I from agents • MSME Daily report of calls I monitored • • Loans to Financial Institutions Case-in-point: COVID Proactive steps taken to support customers: o Moratorium on loans up to six months o Restructuring of loans o Special Loan Products ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking DOOR-STEP BANKING Facilitate regular door-step collection from microfinance customers On-ground presence through BC partners; better understanding of customer requirements I I I CUSTOMER SERVICE QUALITY DEPARTMENT Dedicated team; conducts . fortnightly reviews calls on efficient resolution of customer complaints Undertakes surveys from customers to obtain their feedback on the quality of customer service • COMMUNITY BUILDING PROGRAMME BCs undertake various non- financial services, which include, among other things, conducting financial literacy programmes, livelihood programmes, entrepreneurship training programmes and community engagement programmes 24#25Best-In Class Banking Products and Services Microfinance Loans Loan & Advances Retail Loans o MSME Loans ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Other Loans o ESAF Income Generation Loan o ESAF General Loan Liability Products 。 ESAF Vidyajyoti Loan 。 ESAF Jeevadhara Loan o ESAF Nirmal Loan o ESAF Income Generation Loan 。 ESAF General Loan ○ ESAF Vidyajyoti Loan 。 ESAF Jeevadhara Loan o ESAF Nirmal Loan ○ ESAF Dream Home Loan 。 ESAF Clean Energy Product Loan ○ ESAF Flexi Home ○ ESAF Micro Enterprise Loan ○ Vyapar Vikas Yojana 。 ESAF TREDS (Financing Trade Receivables e-Discounting System) (TreDS) 。 ESAF Loan against Property 。 ESAF Lease Rental Discounting o ESAF Gold Loan o Salary Overdraft Loan o ESAF Personal Loan o Education Loan o ESAF Dream Education Loan 。 ESAF School Loan ○ ESAF New Car Loan 。 ESAF Used Car Loan 。 ESAF New LCV Loan o ESAF Used LCV Loan 。 ESAF Two-Wheeler Loan 。 ESAF Three-Wheeler Loan o Loan against deposit ○ ESAF MSME Easy Business Loan ○ ESAF MSME Smart Loan ○ ESAF Udyog Loan • ESAF GST Power OD 。 ESAF MSME Business Lap 。 ESAF Secured Business Loan to Enterprises o Loans to Financial Institutions o Loans to NBFCs & MFIS ○ Agricultural Loans o ESAF Haritha Loan ESAF Dairy Development Loan ○ ESAF Kisan Credit Card 。 ESAF Farmer Producer Organization Finance 。 ESAF Kisan Jyoti ○ ESAF Farmer Interest Group Loan ESAF SHG-BLP o Life Insurance o General Insurance Third o Depository Services Party o Mutual Funds Products o National Pension System o Atal Pension Yojana o Bharat Bill Pay System Other o Money Transfer Services Services o Safe Deposit Lockers o Foreign Exchange Services o Aadhar Seva Kendra 25#26Prudent Risk Management ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking ESAF SFB has a well-defined risk management architecture with: O O O Active board and senior management oversight Appropriate policies, procedures and limits Comprehensive and timely identification, measurement, mitigation, controlling, monitoring and reporting of risks Appropriate management information systems Comprehensive internal controls Risk Management Architecture o Independent business functions, risk management and compliance and internal audit roles ○ Annual risk strategy defined based on risk appetite aligning risk, capital and performance targets o Focused management of all major risk classes through dedicated committees: · Credit risk management committee • Market risk division (interest rate risk, liquidity risk) Operational risk and business continuity management committee Information security governance committee ○ Appropriate representation of risk function on management committees to ensure risk view is factored into business decisions Business continuity plan o Implemented in March 2020; Business continuity plan involves creation and implementation of strategies that recognize threats and risks that ESAF SFB may be subject to, with a focus on the protection of personnel and assets, while maintaining continued operations in the event of a disaster o Created an executive-level crisis management and quick response team that is responsible for initiating immediate actions in the event of occurrence of a crisis and to guide the business units on steps to be taken to protect its assets and to ensure continuity of business o These plans and processes are periodically reviewed to ensure that they are effective and functional. 6.7% 3.9% 7.8% 3.9% 2.5% 2.6% 1.1% 1.2% Mar-21 Mar-22 GNPA Mar-23 NNPA Sep-23 Asset quality 70.5% 4.8% 59.4% 56.7% 52.8% Mar-21 Mar-22 Mar-23 Sep-23 Mar-22 PCR 0.7% Mar-23 As % of Gross Advances Restructured Standard Advance 0.2% Sep-23 26#27Experienced Management Team ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Supported by a highly experienced team of qualified & experienced professionals Ravimohan Periyakavil Ramakrishnan Part time Chairman & Non-Executive Independent Director 。 Bachelor's and master's degree in science from Kerala University, master's degree in business administration from Birmingham University and; certified associate of Indian Institute of Bankers (IIB) o Previously employed as a chief general manager in the department of banking supervision of the Reserve Bank of India o Has also held the position of a resident advisor, financial sector supervision, International Monetary Fund, AFRITAC South, Mauritius Name & Designation George Kalaparambil John Executive Vice President - IT and Operations George Thomas Executive Vice President- Corporate Services Hari Velloor Executive Vice President - Network 1 South Hemant Kumar Tamta Executive Vice President - Network 2 Rest of India Kadambelil Paul Thomas Managing Director and Chief Executive Officer 。 Master's degree in business administration from Annamalai University 。 Served as the founder secretary cum honorary executive director of Evangelical Social Action Forum for over 25 years and was the chairman and managing director of ESAF Financial Holdings Limited 。 Has also served as a director on the board of Sanma Garments Private Limited, Rhema Dairy Products India Private Limited, Rhema Milk Producer Company Limited, CEDAR Livelihood Services Private Limited (Formerly Cedar Agri Solutions Private Limited), etc. 。 Presently, serves as the president of Kerala Association of Microfinance Institutions Entrepreneurs Gireesh C.P. Chief Financial Officer Ranjith Raj P Company Secretary & Compliance Officer E A Jacob Head-Vigilance and Chief Vigilance Officer Sivakumar P Head Internal Audit Wilson Cyriac Head Risk Management and Chief Risk Officer Sudev Kumar V Head Compliance and Chief Compliance Officer О О о O O оо оо оо Education Master's degree in social work from Pune University Master's degree in business administration (Fintech) from Birla Institute of Technology & Science, Pilani Master's degree of science in ecology & environment from Prior Associations General manager - operations of ESAF Financial Holdings Private Limited o Senior agriculture officer (assistant director agriculture) - Department of Agriculture Development & Farmer's Welfare о Senior vice president - HDFC Bank Sikkim Manipal University Bachelor's degree in arts (history) from University of Delhi, Master's degree in arts (political science) from Madurai Kamaraj University Bachelor's degree in law from University of Delhi Course in banking and finance from NIBM, Pune Bachelor's degree in science from Mahatma Gandhi university Fellow member of ICAI and certified associate of IIB Bachelor's degree in commerce from Calicut University o Company secretary and associate of ICSI ○ Bachelor's degree in science from Kerala University 00 O O ○ Bachelor's degree in commerce from Madras University Certified associate of IIB Master's degree in economics from Kerala University Certified associate of IIB Master's degree in science (horticulture) from Kerala Agriculture University Executive director - Bank of Maharashtra o General manager - Canara Bank о CFO at South Indian Bank o Company secretary of ESAF Financial Holdings Private Limited o Deputy general manager in the audit department of South Indian Bank o General manager (internal audit) of State Bank of India o Executive vice president - head risk and chief risk officer at Federal Bank Limited о Canara Bank 27#28High Quality Board At The Helm Of The Organization ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Biju Varkkey Additional Non-Executive Independent Director о Bachelor's degree in science from Gandhiji University and a fellowship programme from National Institute of Bank Management, Pune. 。 Faculty member at IIM Ahmedabad. 。 He was previously on the board of directors of Bank of Baroda. Thomas Jacob Kalappila Non-Executive Independent Director 。 Associate member of the Institute of Chartered Accountants of India (ICAI), diploma in information and systems audit from the ICAI 。 He is a partner of Thomas Jacob & Co., a partnership firm and has 35 years of experience in statutory audit, internal and forensic audit of banks 。 Ex-independent director on the Boards of South Indian Bank Limited and Malabar Cements Limited. Vinod Vijayalekshmi Vasudevan Non-Executive Independent Director о A bachelor's degree in technology (computer science and engineering), a master's degree in technology (computer science and engineering), and a doctorate of philosophy (computer science and engineering) from Indian Institute of Technology (IIT), Kharagpur 。 Presently serving as group CEO of Flytxt Ravi Venkatraman Non-Executive Independent Director О He has passed the final examination held by the Institute of Chartered Accountants of India and the Institute of Cost and Works Accountants of India 。 Previously served as the executive director and chief financial officer of Mahindra and Mahindra Financial Services Limited Kolasseril Chandramohanan Ranjani Non-Executive Independent Director О Bachelor's degree in science from University of Kerala and a master's degree in bank management from Cochin University of Science and Technology 。 More than 21 years of experience in micro, small and medium enterprises in India. 。 Held senior management positions at SIDBI Ajayan Mangalath Gopalakrishnan Nair Non-Executive Nominee Director 。 Bachelor's degree in science (Horticulture) from the Kerala Agricultural University 。 Certified Associate of Indian Institute of Bankers He was previously employed as the Executive Vice President of ESAF SFB. He was previously the general manager of IT and CIO, general manager of retail assets, general manager of transaction banking, general manager of pune circle, chief compliance officer and deputy general manager of calicut circle in Canara Bank John Samuel Non-Executive Nominee Director 。 Associate of the Institute of Chartered Accountants of India (ICAI), master's degree in business administration from Cochin University of Science and Technology. 。 He was previously a member of the Postal Services Board and held the position of chief post master general 28#29Clearly Articulated Strategy 1 Increase Deposits 2 Increase Advances ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking o Target new & existing customers for CASA, fixed deposits and recurring deposits by focusing on customer service & offering competitive pricing o Add more BCs for sourcing deposits from micro loan customers ○ Appoint dedicated relationship managers to target HNI customers o Focus on high NRI remittances regions by launching targeted campaigns around festivals, conducting marketing activities at airports, malls, etc., and entering into tie-ups with third parties, such as remittance arrangers ○ Micro Loan Business: . Cross selling and up-selling to its customer base Appoint new BCs and have its banking agents start to source customers. О Retail Loans: • Increased focus by targeting agriculturists/small farmers, salaried employees, students etc. in small towns/rural India Offer personalized loan products to salaried account holders • Have hired a Senior VP to concentrate on increasing its mortgage business MSME Loans: . Help its Micro Loan customers to grow their business with additional funding • Find more customers for small ticket term loans 3 Deeper Penetration • Increase supply chain finance by partnering with fintech/tech platforms to find more customers for its working capital loans ○ Agriculture Loans: • Appointing agri relationship officers in more states 4 . Entering into relationships with more FPOS Increase Fee Income Leverage Technology And 5 Customer Data Analytics o Open additional Branches, ATMs along with engaging existing & new BCs to go deeper in existing states o Continue to open branches in urban and semi-urban areas taking into account aggregate deposits, deposit growth, number of urban households, households with banking access, share of PSU deposits and total NRI remittances o Expand third-party product and service offerings like mutual funds distribution and other fee-based offerings Plan to offer bank guarantees and letters of credit to MSMES o Enhance technology platforms such as internet banking, mobile banking, ATMs, cash deposits machines, customer service applications & payment interfaces o This will enable us to perform more reliable data analytics, resulting in more efficient risk management processes & targeted customer profiling 29#30Annexures#31Profit & Loss Statement - Q2 & H1 FY24 - ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Particulars (Crs) Interest Income Interest Expense Net of Interest Income Other Income Q2 FY24 Q2 FY23 Y-o-Y Q1 FY24 Q-o-Q H1 FY24 H1 FY23 Y-o-Y 943.3 688.2 37.1% 898.8 5.0% 1,842.0 1,378.5 33.6% 346.8 250.9 38.2% 313.3 10.7% 660.1 492.5 34.0% 596.5 437.3 36.4% 585.5 1.9% 1,182.0 886.0 33.4% 79.0 65.0 21.4% 93.0 -15.1% 172.0 113.1 52.2% Total Income, Net of Interest Expense 675.5 502.3 34.5% 678.5 -0.4% 1,354.0 999.1 35.5% Employee Benefits Expense 89.1 70.6 26.2% 79.9 11.5% 169.0 131.6 28.4% Depreciation and Amortization Expense 12.3 10.2 20.4% 12.3 0.2% 24.6 20.3 20.9% Other Expenses 284.5 210.6 35.0% 285.7 -0.4% 570.1 411.0 38.7% Operating Expense 385.8 291.5 32.4% 377.8 2.1% 763.7 563.0 35.7% Pre-Provision Operating Profit 289.7 210.8 37.4% 300.7 -3.7% 590.3 436.1 35.4% Provisions 101.4 133.7 -24.2% 126.9 -20.1% 228.3 217.3 5.0% Profit before tax 188.3 77.1 144.1% 173.7 8.4% 362.0 218.8 65.5% Tax Provisions 48.2 19.6 146.4% 43.8 10.0% 92.0 55.3 66.4% Profit After Tax 140.1 57.6 143.3% 130.0 7.8% 270.1 163.6 65.1% Earnings Per Share Diluted 3.1 1.3 143.0% 2.9 7.6% 6.0 3.6 65.3% Breakup of Other Income Loan Processing Fees 30.5 18.6 64.1% 45.2 -32.6% 75.7 42.8 76.9% Profit on sale of investments (Net) 3.7 6.0 -39.5% 6.2 -41.2% 9.9 10.5 -5.7% Profit on revaluation of investments (Net) -4.9 0.1 5.2 -194.5% 0.3 -30.3 Recovery on written off loan 9.5 14.0 -32.3% 0.3 3171.5% 9.8 28.9 -66.1% PSLC Income 7.2 6.0 19.5% 9.0 -20.2% 16.2 22.4 -27.7% Account maintenance charge 2.6 1.8 41.7% 1.6 62.3% 4.2 2.9 43.0% Third Party Product Income Other charges Total 5.1 4.1 23.9% 7.7 -33.5% 12.9 7.6 70.2% 25.4 14.3 77.9% 17.8 43.0% 43.2 28.4 52.2% 79.0 65.0 21.4% 93.0 -15.1% 172.0 113.1 52.2% 31#32Profit & Loss Statement ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Particulars (Crs) Interest Income Interest Expense Net of Interest Income FY23 FY22 FY21 2,854 1,940 1,641 1,017 793 720 1,836 1,147 922 Other Income 288 208 127 Total Income, Net of Interest Expense 2,124 1,355 1,049 Employee Benefits Expense 278 232 188 Depreciation and Amortization Expense 42 33 29 Other Expenses 911 598 415 Operating Expense 1,231 863 632 Pre-Provision Operating Profit 894 492 417 Provisions (other than tax and contingencies) 488 418 276 Profit before tax Tax Provisions Profit After Tax Earnings Per Share Diluted 406 74 141 104 19 36 302 55 105 6.73 1.22 2.46 32#33Balance Sheet ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking Particulars (Crs) Sep-23 Mar-23 Mar-22 Mar-21 CAPITAL AND LIABILITIES Capital 449.5 449.5 Employee Stock Option Outstanding 5.7 5.9 449.5 4.8 449.5 Reserves and Surplus 1,529.7 1,259.7 957.3 902.6 Deposits 17,416.3 14,665.6 12,815.1 8,999.4 Borrowings Other Liabilities and Provisions 2,441.9 3,354.2 2,952.8 1,694.0 525.3 488.8 528.1 293.2 22,368.5 20,223.7 17,707.6 12,338.7 Total Capital and Liabilities ASSETS Cash and Balances with Reserve Bank of India 969.7 739.5 1,300.7 1,618.1 Balances with Banks and Money at Call and Short Notice 175.3 27.5 211.2 201.1 Investments 5,590.6 4,888.5 4,070.3 1,932.1 Advances 14,901.7 13,924.3 11,637.0 8,167.6 Fixed Assets 190.1 187.9 159.5 138.5 Other Assets 541.2 455.8 328.9 281.4 Total Assets 22,368.5 20,223.7 17,707.6 12,338.7 33#34Awards & Recognitions 2018 2019 2020 2021 2022 ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking 2023 'Small Finance Bank of the Year' certification at the IBS India Banking Summit and Awards 2022 ○ 'Rising Category: Banking' Award at the Prestigious о Brand Asia Awards presented by BARC Herald Global о 'Financial Inclusion by Small Finance Bank' Award by HSBC о 'Excellence in Customer Service and Product Distribution' Award at the Eastern India Micro Finance Summit 'Best Customer Experience Bank of the Year' Award at the India Customer Excellence Summit and Awards 2023 'Innovative Bank of the Year' Award at the India Banking Summit and Awards 2023 by Synnex Group о MSME Banking Excellence О о о Awards 'Special Jury Award for Serving MSMEs' by Chamber of Indian Micro Small & Medium Enterprises Finalist at the 9th European Microfinance Award 'Inclusive Finance through Technology' and recognition for the Bank's range of back and front end digital solutions for staff and clients alike Recognition for implementing outstandinginitiatives in the category 'Positive External Image Building' by MFIN Microfinance Awards 2018: In Pursuit of Excellence Perform for Pride FY 2018-19 'Best Performing Branch - Kattapana' under the Atal Pension Yojana by PFRDA о Dhanam 'Kerala Bank of о The Year 2019' award о 'Banking Gold' SKOCH Award for Accessand Affordable Banking Services for Financially Underserved Areas o Diversity & Inclusion Excellence Awards 2019 - first runner up under the category 'Best Employer for Women (in Large Category)' by ASSOCHAM India Best Performance Award 2018-19 under the SHG- Bank Linkage Programme by NABARD, Kerala Regional Office 'Global Sustainability Award 2020' for outstanding achievements in sustainability management by the Energy and Environment Foundation О Semi Finalist at the SKOCH Award 2021 in the о category 'Financial, Digital Inclusion and Education' о 'Great Place to Work' certification for March 2021-February 2022 by the Great Place to Work Institute, India о ISO 9001:2015 certification no. IN92405A valid from April 8, 2021 to April 7, 2024 by LMS Certification Private Limited for our: (i) customer service quality initiatives; (ii) regulatory and statutory reporting of the customer service quality department; (iii) customer grievance redressal mechanism; and (iv) customer service call center monitoring. о 'Banking & Finance Gold' SKOCH Award for Financial Inclusion for All 34#35MADI COMPANY: ++ ESAF ESAF SMALL FINANCE BANK Joy of Banking ESAF Small Finance Bank Limited Mr. Ranjith Raj P Email: [email protected] Website: www.esafbank.com CIN U65990KL2016PLC045669 INVESTOR RELATIONS ADVISORS : orient capital Orient Capital (a division of Link Group) Mr. Nikunj Jain +91 9769060608 [email protected] Mr. Amar Yardi +91 7045121239 [email protected]