Credit growth significantly ahead of the Industry average (26% growth Y-o-Y) Fourth consequent quarter of Slippages trending downwards

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Bethany Turner
5 years ago
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2 Key Messages Business momentum continues robust growth of 25% Y-o-Y Highest ever Operating Profit; Y-o-Y growth of 35%; Qtly Oper. Rs.549 Cr. Credit growth significantly ahead of the Industry average (26% growth Y-o-Y) Fourth consequent quarter of Slippages trending downwards Credit cost 0.44% up by 11bps Y-o-Y Fee income growth 24% Y-o-Y Cost to Income ratio improves by 562 bps Y-o-Y Sharply focused business architecture Market Share Improvement in Deposits by 10% (9 bps) & in advances by 20% (16 bps) Strong, Consistent & Sustainable Growth Consistent liability profile remains core strength CASA Ratio at 32.60% Continued dominance in NR Franchise Full service Bank to NR Businesses through IFSC Banking unit at Gift City The Gift City unit Crosses USD200Mn business Cutting edged Merchant Solutions U-Pos Machine Lotza Merchant E-Pos Payment solution Instant account opening using Aadhar Balance Sheet grows by 26% Y-o-Y (Rs.1.15 L Cr) Total business grows by 25% Y-o-Y (Rs.1.71 L Cr) 2

3 Propelling Growth Redefined Business Vertical Architecture to sharpen market focus Corporate & Institutional Banking Commercial Banking Business Banking Rural and Micro Banking Retail Assets Seasoning of the Relationship Manager model Visible presence in key geographies Focus on higher customer engagement and outcomes Relationship model to tap the SME & Middle Market RM at the fore and Branch at the core Integrated offerings along the supply chain to create better value for SME clients Leveraging distribution to offer credit solutions for small Businesses Historical strength of neighborhood Banking with wide product suite Branch as the 360 degree servicing point Creating a relationship architecture for Agri and Agri Supply Chain Gramjeevan Branches functioning as a Financial Hub to rural India Micro-lending Initiatives Full spectrum approach in Retail : Own distribution Partnership led growth Inorganic Opportunities Digital Platforms Leveraging technology, analytics and innovation to offer more Selfservice DIY products Power of the Full Bank to the Customer 3

4 Performance Highlights (Y-o-Y) Savings Account 23% Net Interest Income 23% Current Account 27% NIM 3.42% Retail Deposit 18% Operating Profit 39% Retail Advance 27% GNPA 44 bps SME Advance 18% Capital Adequacy (CRAR) 12.39% Wholesale Business 34% Provision Coverage Ratio 71.75% 4

5 Core Performance Indicators Consistent growth in NII (in Cr) Cost to Income ratio (in %) Demonetization Impact Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q4 FY 16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 5

6 Comparison : Y-o-Y Retail+Agri SME Wholesale Total Advances (Rs. in Cr) Advances 25% 18% 34% 26% CASA CASA Ratio NRE Deposits Total Deposits Deposits 24% 13 bps 18% 23% Net Income (NII+OI) Other Income Operating Profit Net Profit Performance 22% 19% 39% 2400 % Cost Income ratio Gross NPA% Net NPA% Profit per Employee Ratios 562 bps 51 bps 36 bps 2434 % (lacs) 6

Comparison : Q-o-Q (Sequential) Retail+Agri SME Wholesale Total Advances (Rs.

Ratio NRE Deposits Total Deposits Deposits 0% 206 bps 5% 6% 31973 31838 34.66 32.

Performance 5% 3% 16% 25% 1066 1125 275 282 475 549 206 257 Cost Income ratio Gross NPA%

7 Comparison : Q-o-Q (Sequential) Retail+Agri SME Wholesale Total Advances (Rs. in Cr) Advances 4% 8% 6% 5% CASA CASA Ratio NRE Deposits Total Deposits Deposits 0% 206 bps 5% 6% Net Income (NII+OI) Other Income Operating Profit Net Profit Performance 5% 3% 16% 25% Cost Income ratio Gross NPA% Net NPA% Profit Per Employee Ratios 381 bps 44 bps 30 bps 24% (n Lacs) 7

Key Indicators Q4 FY17 Q3 FY17 Q2 FY17 Q1 FY17 Q4 FY16 Shareholder Value Book Value (Per Share in ) 51.43 49.94 48.63 47.07 46.24 EPS 6.04 4.74 4.68 3.89 0.

8 Key Indicators Q4 FY17 Q3 FY17 Q2 FY17 Q1 FY17 Q4 FY16 Shareholder Value Book Value (Per Share in ) EPS Granularity CASA + Deposits <1 Cr (% of Total Deposits) 89% 92% 89% 93% 92% Profitability ROA ROE Efficiency Cost/Income Net NPA%

9 Sustained improvement in Asset Quality ratios Fresh Accretion Q4 FY17 Q3 FY17 Q2 FY17 Q1 FY17 Q4 FY16 Retail Agri SME Wholesale Total TYPE Balance Restructured Q4 FY17 Of which Bonds Balance Q3 FY17 Of which Bonds STANDARD NPA TOTAL (Rs. in Cr) Q4 FY17 Security Receipts Q3 FY17 NPA Composition Q4 FY17 Q3 FY17 Gross NPA Business NPA NPA Retail Agri SME Wholesale Total Net NPA Credit Cost Risk Adj NIM Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 9

10 Asset Quality Q4 FY 17 19% 11% 17% Risk Rating A & Above FB 1 BBB FB 2 <BBB FB 3 24% 20% Q4 FY 17 19% 21% 13% Q3 FY 17 70% FB4 & Others Q3 FY 17 21% 21% 71% 38% 36% Wholesale Assets Rating Q4 FY-17 Q3 FY-17 A & above 71% 70% BBB 19% 13% < BBB 10% 17% Other Assets Rating Q4 FY-17 Q3 FY-17 FB 1 19% 21% FB 2 21% 21% FB 3 36% 38% FB4 & Others 24% 20% 10

Digital Journey Increase in the % of Number of Active Digital Users BYOM- Online personal loans during FY 16-17 96% growth Base June Sept Dec Mar No. of Accts 4265 Volume Rs.73.

11 Digital Journey Increase in the % of Number of Active Digital Users BYOM- Online personal loans during FY % growth Base June Sept Dec Mar No. of Accts 4265 Volume Rs Cr FedMobile Transaction Volume (per month in Cr) Federal on every Mobile Launched E- POS Payment solution to merchants to collect cashless payments from customers. Introduced FedBook Selfie with Aadhaar based authentication for online account opening. Comprehensive apartment solution introduced in association with Unity Living Introduced IAO (Instant Account opening ) through Aadhaar biometric KYC through select branches. 11

12 Business Parameters 12

13 Liability : Trends Q4 FY17 Q3 FY17 Q2 FY17 Q1 FY17 Q4 FY16 Retail Deposit ratio 94.08% 96.23% 94.49% 97.68% 97.94% in Cr Q4 FY17 Q3 FY17 Q2 FY17 Q1 FY17 Q4 FY16 13% CASA Ratio 25% 32.60% 34.66% 31.04% 32.83% 32.47% Q4 FY17 Q3 FY17 Q2 FY17 Q1 FY17 Q4 FY16 CASA + Demand Dep Other Retail Deposit 13

14 Customer Exposures Retail (Incl Agri) SME Wholesale* in Cr Q4 FY16 Q1 FY16 Q2 FY 17 Q3 FY 17 Q4 FY 17 Q4 FY16 Q1 FY16 Q2 FY 17 Q3 FY 17 Q4 FY 17 Q4 FY16 Q1 FY16 Q2 FY 17 Q3 FY 17 Q4 FY 17 Highlights Even Business Mix. All Segments demonstrate growth. (*Aggregate customer exposure) 14

15 Credit Portfolio Distribution in Cr Total Loan Book Retail Loan Book (Excl Agri) Retail (inc Agri) SME Adv Wholesale Adv Housing Gold Mortgage Others % 39.5% % Q4 FY16 Q1 FY 17 Q2 FY 17 Q3 FY 17 Q4 FY 17 15

16 Fee Income/Other income Q4 FY 17 Q3 FY 16 Q2 FY17 Q1 FY17 Q4 FY16 Y-o-Y % in Cr Loan Processing Fee % Exchange, Commission, Brokerage& Other Fee Income Net Profit on Forex Transactions % % 172 Fee Income (Y-o-Y) 24% 212 Fee Income % Profit on sale of securities % Recovery from assets written off & Other Receipts % Q4 FY16 Q4 FY 17 Total Other income % 16

Distribution : Deriving Efficiency from Foot Print 1 Q4 FY17 Q3 FY17 Q2 FY17 30 28 3 22 1 12 Branches 1252 1252 1252 ATMs 1667 1655 1607

17 Distribution : Deriving Efficiency from Foot Print 1 Q4 FY17 Q3 FY17 Q2 FY Branches ATMs % 12% 16% 16% Q3 FY17 17% 17% Q4 FY % % Metro Urban Semi Urban Rural

18 Distribution Kerala : Continuing Dominance Wholesale % Q4 FY17 Q4 FY Outside Kerala: Gaining share in Cr 42% SME % % Retail ex-gold (inc Agri) % % NR Business % % Savings % % Current % % Bank s Market Share bps 16 bps Gain in Market Share: growth (Y-o-Y) Deposits Advances 18

19 CRAR How strong is your Bank? in Cr Mar-17 Dec-16 Risk Weighted Assets Credit Risk Market Risk Operational Risk Total RWA Tier-1 Capital Funds Tier-II Capital Funds Total Capital Funds CRAR 12.39% 12.28% Tier-I 11.81% 11.63% Tier-II 0.58% 0.65% 19

20 Annexures 20

Balance Sheet & Shareholding Pattern in Cr LIABILITIES Q4 FY17 Q4 FY16 Capital 345 344 Reserves & Surplus 8598 7747 Share

91430 ASSETS 6% 4% Cash & Balance with RBI 4577 3775 Balances with Banks, Money at Call 2876 1645 38% Investments 28196

21 Balance Sheet & Shareholding Pattern in Cr LIABILITIES Q4 FY17 Q4 FY16 Capital Reserves & Surplus Share Holding Pattern Deposits Borrowings Other Liabilities & Provisions % 26% TOTAL ASSETS 6% 4% Cash & Balance with RBI Balances with Banks, Money at Call % Investments Advances Fixed Assets Mutual Funds FIs/Banks FIIs Corporates Others Other Assets TOTAL

22 Financials in Cr Q4 FY17 Q3 FY17 Q-o-Q Q4 FY16 Y-o-Y Interest Income % % Interest Expenses % % Net Interest Income % % Other Income % % Total Income % % Total Expenditure % % Operating Profit % % Total Provisions % % Net Profit % % Net Interest Margin (%) 3.42% 3.32% 10 bps 3.31% 11 bps Cost to Income Ratio (%) 51.16% 54.97% -381 bps 56.78% -562 bps 22

Incomes and Margins Net Interest Income Net Interest Margin (%) in Cr 842 686 692 726 791 3.31 3.28 3.31 3.32 3.

23 Incomes and Margins Net Interest Income Net Interest Margin (%) in Cr Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Yield on Advances Cost of Deposits Q3 FY17 Q4 FY17 Q3 FY17 Q4 FY17 YOA COD 23

5% NBFC, 17% HOUSING FINANCE COMPANIES, 12% REAL ESTATE BUSINESS, 5.6% ITEMS FOR CONSUMPTION/ PERSONAL/ HOUSEHOLD USE, 5.7% CONTRACTORS, 7.

24 Sector wise Advance Portfolio SME Portfolio Wholesale Portfolio VEHICLES,SPARES & AUTOMOTIVE FUEL, 3.5% TEXTILES INCLUDING JUTE & COIR, 4.6% SOCIAL/COMMERCI AL /AGRI INFRASTRUCTURE, 5.0% OTHER RET LOANS, 2.7% BASIC METALS, 2.5% NBFC, 17% HOUSING FINANCE COMPANIES, 12% REAL ESTATE BUSINESS, 5.6% ITEMS FOR CONSUMPTION/ PERSONAL/ HOUSEHOLD USE, 5.7% CONTRACTORS, 7.7% FOOD PRODUCTS, 7.9% WHOLESALE TRADE, 8.1% CHEMICALS, 2% FOOD PRODUCTS, 2% TRANSPORT INFRASTRUCTURE, 5% REAL ESTATE BUSINESS, 5% BASIC METALS, 3% SOCIAL/COMMERCI AL /AGRI INFRASTRUCTURE, 3% BANKS, 3% FOOD/AGRICULTUR AL PRODUCTS, 3% 24

25 Investments / Subsidiaries & JVs Major Investments Subsidiaries & JVs Entity % Equity Fedbank Financial Services Limited % IDBI Federal Life Insurance Company of India Limited 26.00% Kannur International Airport 2.89% Experian Credit Information Company of India Pvt Ltd 2.14% Cochin International Airport 1.96% IDBI Federal Life Insurance Co. Ltd. Bank s Joint Venture Life Insurance Company, in association with IDBI Bank and Ageas Federal Bank holds 26% equity in the J.V. Started selling life insurance products from March 2008 FedBank Financial Services Ltd. Fully owned subsidiary of the Bank with NBFC license Marketing Retail Asset Products of the Bank Retail Hubs established at major centres all over India Separate mechanism established for speedy and dedicated processing of retail loans sourced through this channel UAE Representative Office Representative Office at Abu Dhabi, established in 2008 & Dubai in Gateway of the Bank to the whole of Middle East Increased the reach of the Bank among Non-Resident Indians in the Gulf countries 25

26 External Ratings Fixed Deposit A1+ Certificate of Deposit A1+ Fixed Deposits and Certificate of Deposits enjoy highest rating in that class. 26

27 Disclaimer 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. All information contained in this presentation has been prepared solely by the Bank. No information contained herein has been independently verified by anyone else. No representation or warranty (express or implied) of any nature is made nor is any responsibility or liability of any kind accepted with respect to the truthfulness, completeness or accuracy of any information, projection, representation or warranty (expressed or implied) or omissions in this presentation. Neither the Bank nor anyone else accepts any liability whatsoever for any loss, howsoever, arising from any use or reliance on this presentation or its contents or otherwise arising in connection therewith. This presentation may not be used, reproduced, copied, distributed, shared, or disseminated in any other manner. 27

28 Why Settle For Less?

Strong, Consistent & Sustainable Growth. Bank further cements its position as a national player through the Why Settle for Less? Marketing Campaign

Strong, Consistent & Sustainable Growth. Bank further cements its position as a national player through the Why Settle for Less? Marketing Campaign Key Messages Credit continues growth trend. Book grows by 25% Y-o-Y. Credit Growth spread evenly across all segments. Ahead of system growth continues New client acquisition across all segments shows robust