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PAT up ~6% QoQ led by growth in interest income and income from JVs/associates

* For Jio Financial Services (JFSL), NII rose ~4% QoQ to INR2.8b in 4QFY24 (~INR2.7b in 3Q) and other income declined ~5% QoQ to INR1.4b due to lower commission income.

* Operating expenses grew 3% QoQ to INR1b. Employee expenses rose ~16% QoQ because of the hiring of manpower and management team.

* Credit costs stood at INR18m (vs. INR2m in 3Q). The profit contribution of JVs and associates increased ~17% QoQ to INR776m.

* 4Q PBT grew ~3% QoQ to INR3.9b, while PAT was up ~6% QoQ at ~INR3.1b (INR2.9b in 3Q). In FY24, JFSL reported a consol. PAT of INR16.1b (FY23: INR310m).

New offerings and leasing innovations

* The company has commenced vendor financing to help customers meet working capital requirements. Additionally, new products like home loans, LAP and loans against mutual funds are in the pipeline.

* A new operating lease model called Device as a Service (DaaS) is being developed, which will offer AirFibre, phones, laptops, solar panels, EV batteries, and IT equipment to end consumers on lease. The objective is to provide an affordable financing solution while enabling the company to better target cross-selling opportunities through customer insights.

* JFSL is developing a unified app that will enhance customers’ experience and make their journey convenient.

Expansion in Insurance, payments and investments

* Insurance broking: JFSL has increased its tie-ups to 29 insurance companies. It has started offering embedded insurance for white goods at the point of sale and has launched extended warranty for consumer durables and mobiles. It plans to leverage its payments business platform to sell insurance. JFSL has also launched an institutional sales channel in its insurance broking business.

* Payments: JFSL has launched a revamped digital savings account with debit cards and is piloting a Jio pay voice box exclusively in Mumbai. The company has also rolled out a merchant-focused mobile app for its payments business.

* Investments: Earlier in Apr’24, JFSL and BlackRock announced a 50:50 JV to enter the wealth management and broking business. The company is setting up infrastructure and tech platforms and crafting a go-to-market strategy for its AMC business. The hiring for its asset management company is also underway, reflecting JFSL's dedication to diversification and seizing opportunities in finance.

Base technology in place would be AI enabled

Absence of legacy systems/technology is a key advantage for JFSL. In addition to credit bureau and account aggregator data, JFSL will also be leveraging alternate data sources to drive non-linear growth and harness insights beyond traditional data sources. Additionally, creation of enriched customer profiles will help the company in delivering personalized offerings, enhancing customer satisfaction and loyalty.

Innovations in risk management and credit underwriting

Jio Finance will be employing advanced strategies, blending conventional and alternative data sources within regulatory boundaries for thorough customer preassessment and profiling. With an end-to-end digital approach, real-time underwriting processes will be seamlessly executed, enhancing operational efficiency and customer satisfaction. The company will leverage AI models proactively to monitors risks and utilize behavioural analytics for effective collections and for optimizing its financial performance.

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