Key Messages Robust and Diversified Credit Growth Continues. Blended Y-o-Y Growth rate of 22% Refined Retail Asset delivery architecture yields results (HL grows 26% Y-o-Y; 7% Q-o-Q and Auto grows 68%Y-o-Y;15%Q-o-Q; Retail Disbursements grow 13% Q-o-Q). Corporate continues strong Growth. Market Share in Advances increases to 1.01%. Up by 6bps Y-o-Y Market Share in deposits increases to 0.91%. Up by 3bps Y-o-Y Network-2 crosses Rs.50000Cr in Advances Highest ever NII at 950Cr. NIM at 3.33%. Increases Y-o-Y and sequentially. Tracks guidance. Operating profit increases 18% Y-o-Y to Rs. 561Cr and Net Profit increases 26% Y-o-Y. Granular Liability Franchise: Total deposits cross Rs.1Lakh Crore Retail deposits at 96% of total deposits CASA Ratio at 33% NR continues to exhibit strong growth Strong, Strong, Consistent Consistent & Sustainable Sustainable Growth Growth Percentage Balance Sheet of Accounts grows by opened 21% through Y-o-Y (Rs.1.22 digital L channels Cr) at 50%. Pure Total play business DIY personal grows by loans 18% 100% Y-o-Y opened (Rs.1.78 digitally. L Cr) 143% growth in PL portfolio Y-o-Y CRAR at 14.63% Asset Quality Indicators - GNPA at 2.52% and NNPA at 1.36% Upfronted educational loan delinquency impact Credit cost improves from 0.73 to 0.59 sequentially (Material improvement in recovery/upgrade) No. of payroll accts grow 57% Y-o-Y). Crosses 3L accounts. Branch-Light Distribution Heavy RMs force increased to 336. Up 80% from Q2 Dedicated TPP Sales force Trade Desks at key centres Balance Sheet grows by 15% Y-o-Y (Rs1.28L Cr) Total business grows by 15% Y-o-Y (Rs.1.85L Cr) CRAR at 14.41% 2
Performance Highlights (Y-o-Y) Core Retail Advance (ex AAD, Gold, Assignments) 27 % NII 20 % SME Advance 20 % Agri Advance 30 % Operating Profit Net Profit GNPA % NNPA % Cost To Income Ratio 18% 26% 25 bps 22 bps 311 bps Corporate Business 30 % NIM @ 3.33 Total Advance 22 % Capital Adequacy (CRAR) @ 14.41% Retail Deposit 9 % Provision Coverage Ratio @ 70% 3
Comparison : Y-o-Y Retail+Agri SME* Corporate* Total Advances Advances 18% 20% 30% 22% 28076 33064 15351 18493 26512 34364 70439 85922 CASA CASA Ratio # NRE Deposits Retail Deposits Deposits 4% -170 bps 14% 9% 31973 33141 34.66 32.96 34547 39431 88758 96576 Net Interest Income Core Fee Income Operating Profit Net Profit Performance 20% 13% 18% 26% 791 950 171 193 475 561 206 260 Cost Income ratio Gross NPA% Net NPA% Profit Per Employee Ratios 311 bps 25 bps 22 bps 23% 55.48 52.37 2.77 2.52 1.58 1.36 7.13 8.75 (n Lacs) # Demonetisation Impact * SME & Corporate realigned as per FY beginning reclassification 4
Comparison : Q-o-Q (Sequential) Retail+Agri SME Corporate Total Advances Advances 4% 5% 7% 5% 31670 33064 17651 18493 32175 34364 81497 85922 CASA CASA Ratio NRE Deposits Retail Deposits Deposits 4% 3 bps 3% 2% 32016 33141 32.93 32.96 38256 39431 94313 96576 Net Interest Income Core Fee Income Operating Profit Net Profit Performance 6% 4% 899 950 195 193 583 561 264 260 Cost Income ratio Gross NPA% Net NPA% Profit per Employee Ratios 154 bps 13 bps 4 bps 2% 50.83 52.37 2.39 2.52 1.32 1..36 8.96 8.75 (lacs) 5
Key Indicators Q3 FY18 Q2 FY18 Q1 FY18 Q4 FY17 Q3 FY17 Shareholder Value Book Value (Per Share in ) 60.80 59.59 59.42 51.43 49.94 EPS 5.32 5.35 4.34 6.04 4.74 Granularity CASA + Deposits <1 Cr (% of Total Deposits) 92% 90% 92% 89% 92% Profitability ROA 0.87 0.94 0.77 0.96 0.78 RoRWA (On Credit & Mkt Risk Weighted Assets) 1.40 1.45 1.23 1.56 1.32 ROE 8.74 9.02 8.26 11.92 9.62 Efficiency Cost/Income 52.37 50.83 50.62 51.16 55.48 Net NPA% 1.36 1.32 1.39 1.28 1.58 6
Asset Quality Trend Fresh Accretion Q3 FY18 Q2 FY18 Q1 FY18 Q4 FY17 Q3 FY17 Retail 150* 106 97 55 86 Of the above, Edcnl Loan slippage 71 (46%) 3 (2%) 3 (4%) 9 (17%) 14 (16%) Agri 42 51 45 30 14 SME 122 107 114 122 119 Corporate 98 20 169 37 55 Total 411 284 425 244 273 TYPE Balance Restructured Q3 FY18 Of which Bonds Balance Q2 FY18 Of which Bonds STANDARD 1425 157 1343 157 NPA 186 72 403 292 TOTAL 1611 229 1746 449 (Rs. in Cr) >80% of these are fully secured Almost half the fresh slippages are <1Cr and linked to NW1 NPA Composition Q3 FY18 Q2 FY18 Gross NPA Business NPA NPA Retail 569 501 Agri 266 242 SME 1057 948 Corporate 269 257 Total 2161 1949 Net NPA 1157 1066 Security Receipts Q3 FY18 Q2 FY18 Face Value 1090 1094 Book Value 870 873 Credit Cost Risk Adj NIM 1.19 0.73 2.91 0.59 2.88 3.11 2.79 0.44 0.59 2.23 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 7
Asset Quality : Rating Distribution Risk Rating Q3 FY18 17% 18% 11% 12% Q2 FY17 70% A & Above BBB <BBB FBR1/FB1 FBR2/FBR3/FB2 FBR4/FB3 FBR5/FBR6/FB4 OTHERS 25% 24% 1% Q3 FY18 19% 1% 19% Q2 FY17 22% 22% 72% 34% 33% Wholesale Assets Rating Q3 FY-18 Q2 FY-18 A & above 72% 70% BBB 17% 18% < BBB 11% 12% Other Assets Rating Q3 FY-18 Q2 FY-18 FBR1 FB1 19% 19% FBR2/FBR3 FB2 22% 22% FBR4 FB3 33% 34% FBR5/FBR6 FB4 25% 24% Others 1% 1% 8
Digital Journey Digital Progress Increase in the number of Active Digital User (in Lac) FedMobile Transaction Volume (per month in Cr) 1535 7.81 9.11 9.3 9.74 10.56 789 1069 1097 1214 Q3 FY17 Q4 FY 17 Q1 FY18 Q2 FY18 Q3 FY18 Q3 FY17 Q4 FY 17 Q1 FY18 Q2 FY18 Q3 FY18 Updates in Mobile Banking Bharat QR introduced in FedMobile Digital onboarding (in Q3) 132544 BBPS introduced on FedMobile Customers can switch on/off E-com transactions through Debit Card using SMS and Internet Banking 6990 19366 Loan Accts SB accts Online Deposits 9
Digital Enrichment Digital Enrichments Customers can avail Loan against Deposit through online web portal Customers can convert debit card purchases as EMI using online web portal Web based application Paylite was launched to process bulk transaction for corporate clients Introduced Electricity Bill Payment through Federal Bank s ATMs in the state of Tamil Nadu Partnered with Confirmation.com for Automating Balance Confirmation for corporate clients Online ticketing Partner for India vs New Zealand T20 match in Trivandrum Launched Blockchain Cross Border Remittance arrangement with Lulu International Exchange 10
Business Parameters 11
32817 32053 32643 32625 33781 55941 59832 60025 61688 62795 Liability : Trends in Cr Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 CASA Ratio 34.66% 32.60% 33.44% 32.93% 32.96% 12% 3% Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 CASA + Demand Dep Other Retail Deposit 12
Customer Exposures in Cr SME Retail ( Including Agri ) Corporate* 37653 15351 16361 16786 17651 18493 28076 29291 30174 31670 33064 28545 31573 33582 34775 Q3 FY 17 Q4 FY 17 Q1 FY 17 Q2 FY18 Q3 FY18 Q3 FY 17 Q4 FY 17 Q1 FY 17 Q2 FY18 Q3 FY18 Q3 FY 17 Q4 FY 17 Q1 FY 17 Q2 FY18 Q3 FY18 Highlights SME Portfolio shows 20% growth Y-o-Y. Retail (including Agri) portfolio grows by 18% Y-o-Y. Corporate* portfolio grows by 32% Y-o-Y. (*Aggregate customer exposure) 13
Credit Portfolio Distribution in Cr Total Loan Book Retail Loan Book (Excl Agri) Housing Gold Mortgage Others Retail (inc Agri) SME Wholesale 40% 22% 38% 7026 3627 2089 6701 6773 3895 4029 2093 2020 7035 4219 1921 7219 4426 1890 8567 9104 9404 10080 10758 Q3 FY 17 Q4 FY 17 Q1 FY18 Q2 FY18 Q3 FY18 14
Fee Income/Other income Q3 FY18 Q2 FY18 Q1 FY18 Q4 FY17 Q3 FY17 Y-o-Y % in Cr Loan Processing Fee 34 35 28 41 29 17% Exchange, Commission, Brokerage& Other Fee Income Net Profit on Forex Transactions 120 119 118 130 109 10% 39 41 34 41 33 18% Fee Income (Y-o-Y) 171 13 % 193 Fee Income 193 195 180 212 171 13% Profit on sale of securities 29 75 112 54 86-66% Recovery from assets written off & Other Receipts 7 17 37 16 18-64% Q3 FY17 Q3 FY18 Total Other income 229 287 329 282 275-17% 15
Distribution : Deriving Efficiency from Foot Print 1 Q3 FY18 Q2 FY18 Q1 FY18 30 3 1 Branches 1252 1252 1252 27 22 ATMs 1679 1678 1678 23 2 1 45 1 8 11 3 8 8 25 31 2 1 12 1 12% 12% 16% 16% 102 16 Q2 FY17 17% 17% Q3 FY18 6 22 55% 101 2 55% 600 137 Metro Urban Semi Urban Rural
Distribution Kerala : Continuing Dominance Outside Kerala: Gaining share in Cr Wholesale 6503 4664 39% Q3 FY18 Q3 FY17 23582 21556 9% SME 8666 7839 11% 6758 9462 40% Retail ex-gold (inc Agri) 15721 13257 19% 9738 13432 38% NR Business 37960 33184 14% 3834 3442 11% Savings 21148 19780 7% 7168 6853 5% * SME & Corporate realigned as per FY beginning reclassification Gain in Market Share(Y-o-Y) Advance: Market Share improved by 6 bps Deposit : Market Share improved by 3 bps 0.91 3 bps 1.01 6 bps Micro Banking : Rural Branches show 30% increase in Business Volumes DEP ADV 17
CRAR How strong is your Bank? in Cr Dec-17 Sep-17 Risk Weighted Assets Credit Risk 69565 68244 Market Risk 4168 3752 Operational Risk 6392 6392 Total RWA 80125 78388 Tier-1 Capital Funds 11089 11042 Tier-II Capital Funds 459 426 Total Capital Funds 11548 11467 CRAR 14.41% 14.63% Tier-I 13.84% 14.09% Tier-II 0.57% 0.54% 18
Annexures 19
Core Performance Indicators NII Movement (in Cr) Cost to Income ratio (in %) 899 950 55.0 51.2 50.6 50.8 52.4 842 791 801 Highest Ever NII in a quarter Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 20
Balance Sheet & Shareholding Pattern in Cr LIABILITIES Q3 FY18 Q3 FY17 Capital 393 344 Reserves & Surplus 11648 8334 Deposits 100537 92236 Borrowings 10840 6232 Other Liabilities & Provisions 4803 4352 TOTAL 128221 111497 4% Share Holding Pattern 28% 27% 4% Cash & Balance with RBI 4637 4574 Balances with Banks, Money at Call 2569 2297 Investments 29775 28520 Advances 84953 69629 Fixed Assets 462 511 Other Assets 5825 5966 TOTAL 128221 111497 37% Mutual Funds FIs/Banks FIIs Corporates Others 21
Financials in Cr Q3 FY18 Q2 FY18 Q-o-Q Q3 FY17 Y-o-Y Interest Income 2501 2380 5% 2281 10% Interest Expenses 1551 1481 5% 1490 4% Net Interest Income 950 899 6% 791 20% Other Income 229 287-20% 275-17% Total Income 2730 2667 2% 2557 7% Total Expenditure 2168 2084 4% 2082 4% Operating Profit 561 583-4% 475 18% Total Provisions 301 320-6% 269 12% Net Profit 260 264-1% 206 26% Net Interest Margin (%) 3.33% 3.31% 2 bps 3.32% 1 bps Cost to Income Ratio (%) 52.37% 50.83% 154 bps 55.48% -311 bps 22
Incomes and Margins Net Interest Income Net Interest Margin (%) in Cr 791 842 801 899 950 3.32 3.42 3.13 3.31 3.33 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Yield on Advances Cost of Deposits 9.54 9.54 5.79 5.73 Q2 FY18 Q3 FY18 Q2 FY18 Q3 FY18 YOA COD 23
Sector wise Advance Portfolio SME Portfolio Corporate Portfolio TEXTILES INCLUDING JUTE & VEHICLES,SPARES & COIR, 4.5% AUTOMOTIVE FUEL, 5.1% SOCIAL/COMMERCI AL /AGRI INFRASTRUCTURE, 5.7% ITEMS FOR CONSUMPTION/ PERSONAL/ HOUSEHOLD USE, 6.8% RETAIL TRADE, 2.6% BASIC METALS, 2.5% HOUSING FINANCE COMPANIES, 16% NBFC, 13% FOOD PRODUCTS, 7.2% REAL ESTATE WHOLESALE TRADE, BUSINESS, 8.2% 8.8% CONTRACTORS, 9.0% ITEMS FOR CONSUMPTION/ PERSONAL/ HOUSEHOLD USE, 2% CONTRACTORS, 2% FOOD PRODUCTS, 2% REAL ESTATE BUSINESS, 6% CHEMICALS, 4% TRANSPORT INFRASTRUCTURE, 4% SOCIAL/COMMERCIAL /AGRI INFRASTRUCTURE, 3% FOOD/AGRICULTUR AL PRODUCTS, 3% 24
Investments / Subsidiaries & JVs Major Investments Entity % Equity Fedbank Financial Services Limited 100.00% Subsidiaries & JVs IDBI Federal Life Insurance Company of India Limited 26.00% 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 2016. 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
External Ratings Fixed Deposit A1+ Certificate of Deposit A1+ Tier 2 (Capital) Bonds India Ratings & Research Pvt Ltd IND AA Fixed Deposits and Certificate of Deposits enjoy highest rating in that class. 26
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
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