Corporate Presentation. October 11, 2017

Transcription

1 Corporate Presentation October 11, 2017

2 IndusInd Bank Building Scale with Profitability Strength Growth Returns CRAR at 16.18%; CET1 at 14.28% Strong Asset Quality with impaired assets proportion amongst the lowest in Indian banks; Net NPAs at 0.44% In top decile on productivity, profitability and efficiency parameters in Indian banking industry Note: Data as of June Year CAGR For FY17 Q1FY18 (YoY) Loans 27% 24% Deposits 28% 31% Revenue 29% 26% Profits 27% 26% Networth 33% 17% RoA = 1.86% RoE = 16.17% NIM = 4.00% Revenue (Rs mn) Net Profit (Rs mn) Total Assets(Rs bn) 1,02,341 CAGR of 29% CAGR of 27% 78,135 22,865 28,679 CAGR of 27% 1,429 1,787 58,241 17,937 1,091 47,812 14, FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 2 FY14 FY15 FY16 FY17

3 Performance Benchmarked with Peers IBL performance has been amongst the best in the peer group. Note: Five largest Private and Public Sector Banks based on loans are considered as peers. Data as of FY17. (Banks nomenclature not in any particular order) 3

4 Overview of the Bank Leading private sector bank and financial services company in India Shareholding (1) Incorporated in January, 1994; Current customer base of ~9.5 million (2) Pan India presence through a network of 1210 branches and 2,090 ATMs (2) Diversified loan book Split between Corporate & Commercial Banking and Consumer Finance at 60% and 40% respectively (2) Enterprise-wide Risk Management framework for effective management of risks NRIs/ Director/ Others, 1.69 Individuals, 6.67 Private Corporates, GDR issue, Promoters, MFs / Banks/ Insurance Co, Total Assets of over Rs 1,906 bn and Market Cap of over Rs 1,000 bn (2) FIIs, As on June 30, As on Oct 05,

5 Ratings CRISIL AA + for Infra Bonds program CRISIL AA for Additional Tier I Bonds program CRISIL A1+ for certificate of deposit program IND AA+ for Senior bonds program by India Ratings and Research IND AA for Additional Tier I Bonds program by India Ratings and Research IND A1+ for Short Term Debt Instruments by India Ratings and Research 5

6 Business Units Organization Structure Global Markets Transaction Banking Product Groups Client Groups Consumer Banking Corporate Banking Consumer Finance Retail Liabilities Banking Channel Management & Services Wealth Management & Third Party Distribution Credit Cards Corporate & Investment Banking Commercial Banking Financial Institutions Group Business Banking Public Sector Unit 6

7 Investment Highlights Well Defined Expansion Strategy 1 Experienced Management Team 2 Universal Banking Offerings 3 Growing Liability and Fee Franchise 4 Stable Asset Quality 5 Focused Execution on Risk, Operations and Portfolio 6 History of Technology Refresh and Innovation 7 7

8 Broad Themes 1 Well Defined Expansion Strategy Planning Cycle 4 Strategy Market Share with Profitability Do More of the Same Strategy Digitize to Differentiate, Diversify and Create Domain Leadership Financing Livelihoods Finding Customers from Within Reengineering Our Businesses Sustainable Banking 8

9 1 Well Defined Expansion Strategy Strategic Themes Rebalancing of Loan Book Rural Banking and Microfinance Internal Collaboration and Cross Sell Sustainability Focus on Productivity Enriching Client Experience Digitization of Businesses 9

10 Resulting in 1 Well Defined Expansion Strategy Pillars of Growth Loan Growth 25% - 30% CASA Ratio Revenue Growth RoRWA 40% Exceed Balance Sheet Growth > 2.4% Branch Network 2,000 Customer Base Double to >20mn 10

11 2 Experienced Management Team The Core Executive Team Name Designation Prior Experience Mr. Romesh Sobti Managing Director & CEO Over 40 years banking career with ABN AMRO Bank N.V., ANZ Grindlays Bank Plc & State Bank of India Mr. Paul Abraham Chief Operating Officer Managing Director of ABN AMRO Central Enterprise Services Mr. Suhail Chander Head Corporate & Commercial Banking Head Consumer & Commercial Banking, ABN AMRO Malaysia & Singapore Mr. Sumant Kathpalia Head Consumer Banking Head Consumer Banking, ABN AMRO Bank (India) Mr. Kalpathi Sridhar Senior Executive Vice President - Risk Senior Vice President and Country Risk Officer, ABN AMRO Bank (India) Mr. Ramaswamy Meyyappan Chief Risk Officer Chief Risk Officer at JP Morgan Chase Bank NA, Mumbai Mr. S.V. Zaregaonkar Chief Financial Officer Joined IndusInd Bank in 1995 as Head Operations; Chief Manager Dena Bank Mr. Arun Khurana Head Global Markets Group Regional Head Corporate Solutions Asia-Pacific Markets of RBS Singapore Mr. S.V. Parthasarathy Head Consumer Finance Executive Director, Ashok Leyland Finance Limited Mr. Ramesh Ganesan Head Transaction Banking Executive Director, ABN AMRO Bank (India) Mr. Sanjay Mallik Ms. Roopa Satish Mr. Sanjeev Anand Head Investor Relations & Strategy Head, Corporate, Institutions & Investment Banking Deputy Head Corporate & Commercial Banking Director, BROTKO, his own financial services firm; Held prior positions at ANZ Bank, ABN AMRO Bank (India) and Standard Chartered Bank Head Mid Markets (Western Region), ABN AMRO Bank (India) Head Commercial Banking, ABN AMRO Bank (India) Mr. Zubin Mody Head Human Resources Head HR, ICICI Lombard General Insurance Company Limited 11

12 2 Experienced Management Team Performance Across Key Financial Vectors 3.71 NIMs (%) RoA (%) RoE (%) QIP & Pref. Allot. Rs 5,081 crs Current Cost / Income (%) Net NPAs (%) Revenue per Employee (Rs mn)

13 3 Universal Banking Offerings Well Diversified Loan Book Loan Book (Rs crs) 1,13,081 1,16,407 1,16,407 68,788 55,102 59% 55% 45% 41% 88,419 58% 42% 60% 60% 40% 40% 52% 48% Corporate Banking Large Corporates Mid size Corporates Small Corporates* Total Advances Jun-17 (Rs crs) % % % 69,312 60% *Includes Business Banking Rs. 8,202 crs managed by Consumer Banking FY14 FY15 FY16 FY17 Jun-17 Jun-17 (BBG forming part of Consumer Finance Division Corporate & Commercial Banking Consumer) Mid Size Corporates 19% Small Corporates 12% Large Corporates 21% BBG 7% Comm. Vehicle Loans 13% 13 BL,PL,GL 3% Loan Against Property 6% Utility Vehicle Small Loans CV 2% 2% Two Wheeler Loans 3% Tractor 2% Equipment Financing 4% Credit Card 2% Car Loans 4% (Rs crs) Consumer Finance Jun-17 Comm. Vehicle Loans 15,573 13% Utility Vehicle Loans 2,427 2% Small CV 2,381 2% Two Wheeler Loans 3,262 3% Car Loans 4,819 4% Tractor 2,076 2% Equipment Financing 4,381 4% Credit Card 1,944 2% Loan Against Property 7,303 6% BL, PL, GL, Others 2,929 2% Total Advances 47,095 40%

14 3 Universal Banking Offerings Well Distributed Vehicle Finance Portfolio Geographical Distribution of Vehicle Finance Portfolio (Rs 342,122mn) March 31, 2017 Two Wheeler loans M&HCV loans J&K 0% Car loans Himachal Pradesh 1% Punjab 3% Chandigarh 0% Uttaranchal 0% Delhi Haryana 5% 2% Sikkim 0% Rajasthan 10% UP 6% Assam 2% Bihar 2% Manipur, 0% Jharkhand Gujarat Madhya Pradesh 3% West Mizoram 0% 5% 5% Tripura Bengal Chhatisgarh 1% Dadra & Nagar 5% 3% Haveli 0% Maharashtra 7% Odisha 4% LCV Loans Tractor Loans Telangana 5% Small CV & Utility Vehicle loans Goa 1% Karnataka 4% Andhra Pradesh 6% Pondicherry 0% Kerala 9% Tamil Nadu 11% 14

15 3 Universal Banking Offerings Comprehensive Corporate and Commercial Banking Offering Distribution of Corporate & Commercial Banking Network Product and Service Offerings Gujarat Punjab Chandigarh Rajasthan HP Uttarakhand Haryana UP Madhya Pradesh Bihar Corporate & Institutions Banking Public Sector Units Commercial Banking Business Banking Group Jharkhand Meghalaya Assam Nagaland Fund Based Services Working Capital Finance Short Term Finance Bill Discounting Export Credit Term Lending Buyer s Credit / Supplier s Credit Asset based financing Lease Rental Discounting Supply Chain Finance Warehouse Receipt Finance Agri Finance Inclusive Banking Goa Maharashtra Chhatisgarh Orissa Telengana Andhra Pradesh West Bengal Tripura Non Fund Based Services Investment Non Banking Fund Based Services Letter of Credit Bank Guarantees Forward Contracts / Derivatives Structured Finance Debt Syndication Advisory Services Karnataka Kerala Tamil Nadu Pondicherry 15 Value Added Services Channel Financing / Associate Financing Cash Management Services Corporate Salary Accounts Liability/ Investment Products Commodity Finance Project Finance Forex / Derivative Desks

16 3 Universal Banking Offerings Diversified Corporate Loan Book Industry Break-up Corporate Banking FCY Loans * FCY 8% 12% 16% 14% 14% Q4FY17 Q3FY17 Q2FY17 Q1FY17 Q4FY16 Q3FY16 Q2FY16 Q1FY16 Q4FY15 Q3FY15 Q2FY15 Q1FY15 * Percentage of total loans 16

17 4 Growing Liability and Fee Franchise Improving CASA profile Building CASA traction Expanding branch network Focus on target market segments Government business Capital market flows Key Non Resident markets Self employed and Emerging Corporate businesses Transaction Banking and CMS Mandates Differentiated service propositions 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 CASA Uptick 34.1% 35.2% 36.9% 32.5% 29.3% 27.3% 46,646 32,724 25,300 15,868 19,691 11,563 FY12 FY13 FY14 FY15 FY16 FY17 CASA (Rs crs) % of Total Deposits 38% 33% 27% 21% 16% 10% Current Account (CA) Savings Account (SA) 21,000 18,000 15,000 12,000 9,000 6,000 3, % 16.3% 16.2% 16.7% 16.6% 15.5% 19,609 15,478 12,356 8,835 9,776 6,869 FY12 FY13 FY14 FY15 FY16 FY17 CA (Rs crs) % of Total Deposits 19% 17% 15% 13% 11% 9% 7% 5% 30,000 25,000 20,000 15,000 10,000 5, % 17.5% 21.4% 18.5% 11.1% 13.0% 27,037 17,246 12,944 9,915 4,694 7,033 FY12 FY13 FY14 FY15 FY16 FY17 SA (Rs crs) % of Total Deposits 25.0% 21.0% 17.0% 13.0% 9.0% 5.0% 1.0% -3.0% 17

18 4 Growing Liability and Fee Franchise Efficient Distribution and Cross Sell Life Insurance General Insurance Health Insurance Mortgage and Broking 18

19 4 Growing Liability and Fee Franchise Diversified Fee streams Fee growth ahead of loan growth for last 7 years Comprises a mix of retail and corporate fee incomes Individual fee streams consists of multiple drivers Rs cr FY15 FY16 FY17 Trade and Remittances Foreign Exchange Income Distribution Fees (Insurance, MF, Cards) General Banking Fees Loan Processing fees Investment Banking Total Core Fee Income 2,201 2,810 3,489 19

20 5 Stable Asset Quality Asset Quality Managed Across Cycles Gross NPA Net NPA 1.23% 1.01% 0.98% 1.03% 1.12% 0.81% 0.87% 0.93% 0.50% 0.28% 0.27% 0.31% 0.33% 0.31% 0.36% 0.39% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Credit Cost * 0.79% 0.61% 0.41% 0.46% 0.41% 0.48% 0.53% 0.59% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 * Net of recoveries 20

21 5 Stable Asset Quality Well Rated Corporate Portfolio P E R C E N T O F R A T E D 24% 22% 20% 18% 16% 14% 12% 10% Investment Grade As of June 2017 Sub Investment Grade Unsecured Non Fund Based % Secured Non Fund Based % Unsecured Fund Based % Secured Fund Based % P O R T F O L I O 8% 6% 4% 2% 0% IB1 (AAA) IB2+ (AA+) IB2 (AA) IB2- (AA-) IB3+ (A+) IB3 (A) IB3- (A- ) IB4+ (BBB+) IB4 (BBB) IB4- (BBB-) IB5+ (BB+) IB5 (BB) IB5- (BB-) IB6 (B) IB7 (C ) IB8 (C ) NPA (D) 21

22 6 Focused Execution on Risk, Operations and Portfolio Robust Risk Management Structure Risk Organization Credit Approval & Monitoring Credit Appraisal/ Approval process Credit standards tightened Credit Admin reinforced and centralised in hubs Early warning signals / Exceptions tracking Enhanced monitoring mechanism Credit Risk Management Risk Rating Models revised and benchmarked against external rating Basel II & III implementation Internal Capital Adequacy Assessment Process (ICAAP) Stress testing reinforced Portfolio Management & Credit Quality Monitoring reinforced Credit Risk values measurement reinforced PD, LGD, EAD Market Risk Management & ALM Proactive Monitoring of Risk & exposures Daily valuation VaR & PV01 Based Limit Online monitoring of Risk sensitivities Capital Charge on Market Risk, CVA Basel III Liquidity Standards LCR, Liquidity Ratios Liquidity Gaps monitoring Daily Duration-based gap approach Stress testing for Liquidity, interest and foreign exchange risk Operational Risk Management Risk and Control Self Assessment Key Risk Indicators (KRIs) Loss Data Collection and Analysis Risk Profiling of branches Operational Risk Assessment Process for New Products Risk Events Reporting Business Continuity Plan Financial Restructuring & Reconstruction Separate group monitors non performing loans Account-wise monitoring & recovery mechanism Credit Quality Assurance & Loan Review Qualitycheck on entire credit process Tracking of credit rating Tracking of portfolio quality ALM System / Fund Transfer Pricing 22

23 6 Focused Execution on Risk, Operations and Portfolio Comfortable Capital Adequacy Bank has maintained strong capital adequacy levels well in excess of the minimum regulatory requirement Raised Rs 10 billion of Additional Tier I (AT1) bonds in FY17 and again in April 2017 to augment the Tier I ratio and position itself strongly for the next phase of growth CRAR Rs cr Mar 15 Mar 16 Mar 17 June 17 Credit Risk, CVA and UFCE 76,718 99,360 1,22,036 1,21,926 Market Risk 4,356 5,462 6,669 8,499 Operational Risk 7,855 11,466 14,824 14,824 Total Risk Weighted Assets 88,929 1,16,288 1,43,529 1,45, % 3.6% 13.9% 2.5% 15.4% 1.6% Tier I Tier II CRAR 15.5% 15.3% 16.18% 0.52% 13.9% 0.6% 0.6% 1.1% 12.1% 0.9% CET 1 Capital Funds 9,975 17,350 20,125 20,734 AT 1 Capital Funds - - 1,000 2,000 Tier 2 Capital Funds Total Capital Funds 10,751 18,019 21,967 23, % 13.8% 14.7% 15.66% 12.3% 12.7% 11.4% 11.2% FY11 FY12 FY13 FY14 FY15 FY16 FY17 Q1FY18 CRAR 12.09% 15.50% 15.31% 16.18% CET % 14.92% 14.02% 14.28% Tier % 14.92% 14.72% 15.66% Tier % 0.58% 0.59% 0.52% 23

24 6 Focused Execution on Risk, Operations and Portfolio Diversified Funding Sources Funding Mix* Deposits & Borrowings Evolution Refinance; 8% Capital Markets TD; 2% Corporate TD; 4% Other Liabilities; 5% Other Borrowings; 3% Infra Bonds; 1% AT1 Bonds; 1% Net Worth 12% CA Deposits; 11% 18,00,000 16,00,000 14,00,000 12,00,000 10,00,000 8,00,000 6,00,000 4,00,000 2,00,000 78% Borrowings 76% Deposits 82% 83% Financial Institutions TD; 10% SA Deposits; 15% - Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 70 Public Sector Units TD; 9% Retail & SME TD; 19% * Data as on March

25 6 Focused Execution on Risk, Operations and Portfolio Stable Liquidity and Leverage Profile Liquidity Coverage Ratio HQLA (Rs cr) Net Cash Outflow (Rs cr) LCR (%) 9.7% Basel III Leverage Ratio 91.3% 94.6% 91.6% 65.1% 74.2% 66.4% 70.7% 78.4% 81.1% 29,823 28,215 Required >80% 9.5% 9.3% 9.2% 9.2% 9.1% 9.3% 9.4% 14,683 Required >4.5% 9,558 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 25

26 6 Focused Execution on Risk, Operations and Portfolio Distribution Expansion to Drive Growth Branches 1, Current Clients (mn) Note: Numbers given above are total branches in each state. This does not include Branch/Representative Office in London, Dubai and Abu Dhabi Current

27 6 Focused Execution on Risk, Operations and Portfolio Sustainable Banking: Good Ecology is good Economics! Regulatory Compliance Environmental Social Governance Operational Compliance Market Risk Management Liquidity Management AT-1 Capital Issuance IT & Information Security Solar ATMs Thin Servers Waste Management Green champions LEEDs certified building Water rejuvenation projects Micro Credit Rural Branches Para Champions Board Level CSR Committee 6 Years of Sustainability Reporting Participation in CDP, DJSI Surveys Reputation Risk Management Financing Renewable Energy Priority sector compliance Legal and Financial Environmental Lending Policy Strategic Risk Management Afforestation Projects literacy Critical care support A Integrated Financial Reporting 27

28 7 History of Technology Refresh and Innovation Innovation as a Service Differentiator Channel Innovation Service Innovation Product Innovation Client Experience Edge 28

29 7 History of Technology Refresh and Innovation Digitize to Differentiate, Diversify and Create Domain Expertise Integrated Digital Strategy to extract significant value (14% of 2020 profit) via: 1. Agility & Innovation as Service Differentiator 2. Operating Efficiency in Front & Back Office 3. Evolution to Online/Digital Channels 4. Partnering with the Digital Ecosystems 5. Improved Decision Making & Analytics 6. Transform to Digital Offerings 7. Re-skilling Staff on Digital Technologies 29

30 Additional Information 30

31 Balance Sheet * Q1FY18 Q1FY17 Y-o-Y (%) Q4FY17 Q-o-Q (%) (Rs Crs) Capital & Liabilities Capital % Reserves and Surplus 20,902 17,786 18% 20,048 4% Deposits 1,33,673 1,01,768 31% 1,26,572 6% Borrowings 27,404 21,676 26% 22,454 22% Other Liabilities and Provisions 8,072 8,424 (4%) 8,976 (10%) Total 1,90,650 1,50,250 27% 1,78,648 7% Assets Cash and Balances with RBI 6,415 5,224 23% 7,749 (17%) Balances with Banks 13,754 6, % 10,879 26% Investments 42,147 33,240 27% 36,702 15% Advances 1,16,407 93,678 24% 1,13,081 3% Fixed Assets 1,360 1,276 7% 1,335 2% Other Assets 10,567 10,639 (1%) 8,902 19% Total 1,90,650 1,50,250 27% 1,78,648 7% Business (Advances + Deposit) 2,50,080 1,95,446 28% 2,39,653 4% *In terms of RBI guidelines Repo / Reverse Repo under LAF is regrouped. 31

32 Profit and Loss Statement (Rs Crs) Q1FY18 Q1FY17 Y-o-Y (%) Q4FY17 Q-o-Q (%) Net Interest Income 1,774 1,356 31% 1,667 6% Other Income 1, % 1,211 (4%) Total Income 2,941 2,329 26% 2,879 2% Operating Expenses 1,352 1,096 23% 1,307 4% Operating Profit 1,589 1,233 29% 1,572 1% Provisions & Contingencies % 430 (28%) Profit before Tax 1,279 1,003 27% 1,142 12% Provision for Tax % % Profit after Tax % % 32

33 Accolades 33

34 Award Winning Brand / Franchise The Best CEO (BFSI) Mr. Romesh Sobti Forbes Super 50 Companies in India Ranked 12 th Most Valuable Indian Brands Winner- Fraud Management and Cybersecurity Business Today 2016 Forbes India 2016 BrandZ Top 50 WPP Plc & Milward Brown 2016 Celent Model Bank

35 Thank You

36 Disclaimer This presentation has been prepared by IndusInd Bank Limited (the Bank ) solely for information purposes, without regard to any specific objectives, financial situations or informational needs of any particular person. All information contained has been prepared solely by the Bank. No information contained herein has been independently verified by anyone else. This presentation may not be copied, distributed, redistributed or disseminated, directly or indirectly, in any manner. This presentation does not constitute an offer or invitation, directly or indirectly, to purchase or subscribe for any securities of the Bank by any person in any jurisdiction, including India and the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. Any person placing reliance on the information contained in this presentation or any other communication by the Bank does so at his or her own risk and the Bank shall not be liable for any loss or damage caused pursuant to any act or omission based on or in reliance upon the information contained herein. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Further, past performance is not necessarily indicative of future results. This presentation is not a complete description of the Bank. This presentation may contain statements that constitute forward-looking statements. All forward looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially include, among others, future changes or developments in the Bank s business, its competitive environment and political, economic, legal and social conditions. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Bank disclaims any obligation to update these forward-looking statements to reflect future events or developments. Except as otherwise noted, all of the information contained herein is indicative and is based on management information, current plans and estimates in the form as it has been disclosed in this presentation. Any opinion, estimate or projection herein constitutes a judgment as of the date of this presentation and there can be no assurance that future results or events will be consistent with any such opinion, estimate or projection. The Bank may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. The accuracy of this presentation is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the Bank. This presentation is not intended to be an offer document or a prospectus under the Companies Act, 2013 and Rules made thereafter, as amended, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended or any other applicable law. Figures for the previous period / year have been regrouped wherever necessary to conform to the current period s / year s presentation. Total in some columns / rows may not agree due to rounding off. Note: All financial numbers in the presentation are from Audited Financials or Limited Reviewed financials or based on Management estimates. 36