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 growth. Supportive Business Architecture and growth enablers deepen across all business verticals Highest quarterly operating profit. Increases sequentially over last 4 quarters NIM at 3.31%. Increases sequentially Granular Liability Franchise: Retail deposits grow 16% Y-o-Y CASA Ratio at 32.93% Continued increase in NR market share. Strong, Consistent & Sustainable Growth Balance Sheet grows by 21% Y-o-Y (Rs.1.22 L Cr) Total business grows by 18% Y-o-Y (Rs.1.78 L Cr) CRAR at 14.63% Asset Quality Indicators - GNPA% (2.39)and NNPA% (1.32)- Improves Sequentially and Y-o-Y NCLT impact negligible. Ahead of system in recognizing systemically weak Accounts Bank further cements its position as a national player through the Why Settle for Less? Marketing Campaign The Campaign was run successfully through the quarter. Number of active digital users increases 63% Innovative platform for digital account opening using biometric authentication introduced 2
Performance Highlights (Y-o-Y) Savings Account 21% Cost to Income Ratio 159 bps Retail Deposit 16% Operating Profit 23 % Retail Advance 17% GNPA % 39 bps SME Advance 18% Net Profit 31 % Agri Advance 24% Capital Adequacy (CRAR) 14.63 Wholesale Business 36% Provision Coverage Ratio 70% 3
Comparison : Y-o-Y Retail+Agri SME* Wholesale* Total Advances Advances 18% 18% 36% 25% 26762 31670 14955 17651 23722 32175 65439 81497 CASA CASA Ratio NRE Deposits Retail Deposits Deposits 20% 189 bps 18% 16% 26787 32016 31.04 32.93 32459 38256 81547 94313 Net Income (NII+OI) Core Other Income Operating Profit Net Profit Performance 19% 20% 23% 31% 998 1186 163 195 475 583 201 264 Cost Income ratio Gross NPA% Net NPA% Profit per Employee Ratios 159 bps 39 bps 29 bps 29% 52.42 50.83 2.78 2.39 1.61 1.32 6.96 8.96 (lacs) * SME & Wholesale realigned as per FY beginning reclassification 4
Comparison : Q-o-Q (Sequential) Retail+Agri SME Wholesale Total Advances Advances 5% 5% 7% 6% 30174 31670 16786 17651 30127 32175 77087 81497 CASA CASA Ratio NRE Deposits Retail Deposits Deposits 0% -51 bps 2% 2% 32048 32016 33.44 32.93 37370 38256 92668 94313 Net Income (NII+OI) Core Other Income Operating Profit Net Profit Performance 5% 9% 5% 25% 1130 1186 180 195 558 583 210 264 Cost Income ratio Gross NPA% Net NPA% Profit Per Employee Ratios 0% 3 bps 7 bps 24% 50.62 50.83 2.42 2.39 1.39 1.32 7.21 8.96 (n Lacs) 5
Key Indicators Q2 FY18 Q1 FY18 Q4 FY17 Q3 FY17 Q2 FY17 Shareholder Value Book Value (Per Share in ) 59.59 59.42 51.43 49.94 48.63 EPS 5.35 4.34 6.04 4.74 4.68 Granularity CASA + Deposits <1 Cr (% of Total Deposits) 90% 92% 89% 92% 89% Profitability ROA 0.94 0.77 0.96 0.78 0.88 ROE 9.02 8.26 11.92 9.62 9.78 Efficiency Cost/Income 50.83 50.62 51.16 54.97 52.42 Net NPA% 1.32 1.39 1.28 1.58 1.61 6
Asset Quality Trend Fresh Accretion Q2 FY18 Q1 FY18 Q4 FY17 Q3 FY17 Q2 FY17 Retail 106 97 55 86 63 Agri 51 45 30 14 26 SME 107 114 122 119 135 Wholesale 20 169 37 55 42 Total 284 425 244 273 266 TYPE Balance Restructured Q2 FY18 # Q1 FY18 # Of which Bonds Balance Of which Bonds STANDARD 1343 157 1326 135 NPA 403 292 350 243 TOTAL 1746 449 1676 378 (Rs. in Cr) NPA Composition Q2 FY18 Q1 FY18 Gross NPA Business NPA NPA Retail 501 415 Agri 242 211 SME 948 890 Wholesale 257 351 Total 1949 1868 0.65 Security Receipts Q2 FY18 Q1 FY18 Face Value 1093.74 1091.85 Book Value 873.48 880.40 Credit Cost 1.19 0.59 0.44 0.73 2.87 # includes S4A,SDR,5/25 Risk Adj NIM 2.79 3.11 2.88 2.23 Net NPA 1066 1061 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 7
Asset Quality : Rating Distribution Risk Rating Q2 FY18 12% 12% A & Above BBB FBR1/FB1 FBR2/FBR3/FB2 24% 23% 1% 1% 20% 19% Q2 FY18 18% 18% Q1 FY17 70% <BBB FBR4/FB3 FBR5/FBR6/FB4 OTHERS Q1 FY17 21% 22% 70% 35% 34% Wholesale Assets Rating Q2 FY-18 Q1 FY-18 Other Assets Rating Q2 FY-18 Rating Q1 FY-18 FBR1 FB1 19% FB 1 20% A & above 70% 70% BBB 18% 18% < BBB 12% 12% FBR2/FBR3 FB2 22% FB 2 21% FBR4 FB3 34% FB 3 35% FBR5/FBR6 FB4 24% FB4 23% Others 1% Others 1% 8
Digital Journey Digital Enrichments FedNet is now enabled with BBPS (Bharath Bill Payment System) GST payment FedMobile updated with exciting user interface UPI payments chat feature Bharat QR Lotza UPI App launched in ios. IAO (Instant Account Opening): A new platform for digital account opening using biometric authentication 9
Digital Journey Digital Progress Increase in the number of Active Digital User (in Lac) FedMobile Transaction Volume (per month in Cr) 5.96 7.81 9.11 9.3 9.74 412 789 1069 1097 1214 Q2 FY17 Q3 FY17 Q4 FY 17 Q1 FY18 Q2 FY18 Q2 FY17 Q3 FY17 Q4 FY 17 Q1 FY18 Q2 FY18 Missed Call Banking Users (in Lac) Digital onboarding (in Q2) 6.52 6.48 6.54 7.31 90501 1.72 11207 Q2 FY17 Q3 FY17 Q4 FY 17 Q1 FY18 Q2 FY18 No: of loan accounts No: of SB accounts 10
Business Parameters 11
27406 32817 32053 32643 32625 54142 55941 59832 60025 61688 Liability : Trends in Cr Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 CASA Ratio 31.04% 34.66% 32.60% 33.44% 32.93% 14% 19% Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 CASA + Demand Dep Other Retail Deposit 12
Customer Exposures Retail ( Including Agri ) SME Wholesale* in Cr 31573 33582 34775 26762 28084 29291 30174 31670 16324 16361 16786 17651 25179 28545 14955 Q2 FY 17 Q3 FY 17 Q4 FY 17 Q1 FY 17 Q2 FY18 Q2 FY 17 Q3 FY 17 Q4 FY 17 Q1 FY 17 Q2 FY18 Q2 FY 17 Q3 FY 17 Q4 FY 17 Q1 FY 17 Q2 FY18 Highlights Wholesale* portfolio grows by 38% Y-o-Y. SME Portfolio shows 18% growth Y-o-Y. Retail (including Agri) portfolio grows by 18% Y-o-Y. (*Aggregate customer exposure) 13
Credit Portfolio Distribution in Cr Total Loan Book Retail Loan Book (Excl Agri) Retail (inc Agri) SME Wholesale Housing Gold Mortgage Others 5848 7026 6701 6773 7035 39% 22% 39% 3503 3627 2259 2089 3895 4029 2093 2020 4219 1921 8351 8567 9104 9404 10080 Q2 FY 17 Q3 FY 17 Q4 FY 17 Q1 FY18 Q2 FY18 14
Fee Income/Other income Q2 FY18 Q1 FY18 Q4 FY17 Q3 FY16 Q2 FY17 Y-o-Y % in Cr Loan Processing Fee 35 28 41 29 27 33% Exchange, Commission, Brokerage& Other Fee Income Net Profit on Forex Transactions 119 118 130 109 109 9% 41 34 41 33 27 52% Fee Income (Y-o-Y) 20% 195 Fee Income 195 180 212 171 163 20% 163 Profit on sale of securities 75 112 54 86 86-13% Recovery from assets written off & Other Receipts 17 37 16 18 23-26% Q2 FY17 Q2 FY18 Total Other income 287 329 282 275 272 5% 15
Distribution : Deriving Efficiency from Foot Print 1 Q2 FY18 Q1 FY18 Q4 FY17 30 3 1 Branches 1252 1252 1252 27 22 ATMs 1678 1678 1667 23 2 1 45 1 8 11 3 8 8 25 31 2 1 12 1 12% 12% 16% 16% 102 16 Q1 FY17 17% 17% Q2 FY18 6 22 55% 101 2 55% 600 137 Metro Urban Semi Urban Rural
Distribution Kerala : Continuing Dominance Wholesale 5490 Q2 FY18 Q2 FY17 4140 33% Outside Kerala: Gaining share in Cr 21254 19143 11% SME 8441 8037 5% 8841 6769 31% Retail ex-gold (inc Agri) 15067 13141 15% 9587 12532 31% NR Business 31114 36753 18% 3763 3276 15% Savings 20380 17031 20% 6770 5382 26% Current 2006 1646 22% 2367 2046 16% * SME & Wholesale realigned as per FY beginning reclassification Bank s Market Share 0.9 Q2 FY18 1.01 4 bps Gain in Market Share: growth (Q-o-Q) Deposit: Maintained Market share Advance : Market Share improved by 4 bps 17
CRAR How strong is your Bank? in Cr Sep-17 Jun-17 Risk Weighted Assets Credit Risk 68244 64589 Market Risk 3752 3681 Operational Risk 6392 6392 Total RWA 78388 74662 Tier-1 Capital Funds 11042 10989 Tier-II Capital Funds 426 419 Total Capital Funds 11467 11408 CRAR 14.63% 15.28% Tier-I 14.09% 14.72% Tier-II 0.54% 0.56% 18
Annexures 19
Core Performance Indicators NII Movement (in Cr) Cost to Income ratio (in %) 842 899 Demonetization Impact 791 801 55.0 726 Highest Ever NII in a quarter 52.4 51.2 50.6 50.8 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 20
Balance Sheet & Shareholding Pattern in Cr LIABILITIES Q2 FY18 Q2 FY17 Capital 391 344 Reserves & Surplus 11342 8121 Share Holding Pattern Deposits 97211 86299 Borrowings 8733 2655 Other Liabilities & Provisions 4080 3055 27% 27% TOTAL 121757 100475 4% 4% Cash & Balance with RBI 4726 3985 Balances with Banks, Money at Call 4048 2001 38% Investments 26317 24152 Advances 80645 64686 Fixed Assets 472 510 Mutual Funds FIs/Banks FIIs Corporates Others Other Assets 5547 5139 TOTAL 121757 100475 21
Financials in Cr Q2 FY18 Q1 FY17 Q-o-Q Q2 FY17 Y-o-Y Interest Income 2380 2324 2% 2066 15% Interest Expenses 1481 1523-3% 1340 10% Net Interest Income 899 801 12% 726 24% Other Income 287 329-13% 272 6% Total Income 2667 2653 1% 2338 14% Total Expenditure 2084 2095-1% 1863 12% Operating Profit 583 558 5% 475 23% Total Provisions 320 348-8% 274 17% Net Profit 264 210 25% 201 31% Net Interest Margin (%) 3.31% 3.13% 18 bps 3.32% -1 bps Cost to Income Ratio (%) 50.83% 50.62% 21 bps 52.42% -159 bps 22
Incomes and Margins Net Interest Income Net Interest Margin (%) in Cr 791 842 801 899 3.32 3.32 3.42 3.13 3.31 726.00 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Yield on Advances Cost of Deposits 9.99 9.54 Q1 FY18 Q2 FY18 6.09 5.79 Q1 FY18 Q2 FY18 YOA COD 23
Sector wise Advance Portfolio SME Portfolio Wholesale Portfolio VEHICLES,SPARES & AUTOMOTIVE FUEL, 5.1% SOCIAL/COMMERCI AL /AGRI INFRASTRUCTURE, 6.4% ITEMS FOR CONSUMPTION/ PERSONAL/ HOUSEHOLD USE, 7.1% TEXTILES INCLUDING JUTE & COIR, 4.7% BASIC METALS, 2.5% CONSTRUCTION MATERIALS,NON-FOOD STORES/OTHER RETAIL TRADE, 2.5% NBFC, 15% HOUSING FINANCE COMPANIES, 11% REAL ESTATE BUSINESS, 5% FOOD PRODUCTS, 7.9% REAL ESTATE BUSINESS, 8.3% CONTRACTORS, 8.4% WHOLESALE TRADE, 8.9% CONTRACTORS, 2% CHEMICALS, 2% FOOD PRODUCTS, 2% TRANSPORT INFRASTRUCTURE, 5% FOOD/AGRICULTUR AL PRODUCTS, 3% SOCIAL/COMMERCIAL /AGRI INFRASTRUCTURE, 3% BASIC METALS, 2% 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+ 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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