Investor Presentation Q3 FY2013
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Table of Contents Overview Snapshot Transformation Strategy Business Performance Financial Highlights Results Network Shareholders Accolades 3
Snapshot Track record 83 year old franchise; Leading position in Kerala; Expanding fast outside Growth and Profitability Last 5 year CAGR: 25% business; PAT of 25%; RoAA up from 0.5% to 1.1% Improving asset yield as bank builds fee income streams in addition to interest income Quality Steadily improving asset quality; GNPA at 1.6%, NNPA 0.7% Board and Management Mr. Amitabha Guha, Non Exec, Chairman (ex-joint MD of SBI, ex MD -SBT, SBH) Proactive management led by Dr. V. A. Joseph, well supported by 2 Executive Directors and 7 GMs 6 GMs life time bankers at the bank Building for future Young workforce (avg. age of 37 years) with continuity of management 2 CEOs in the last decade Stakeholder value Strong protection of stakeholder interest Stock return of 775% since IPO, and 72% since maiden QIP in 2007 4
Significant Transformation Since 2009 3.30 3.20 3.10 3.00 2.90 2.80 2.80 NIM 3.03 3.05 3.24 1.15 1.10 1.05 1.00 0.95 0.93 RoA 1.04 1.06 1.11 2.70 0.90 2.60 2.50 FY 10 FY 11 FY 12 FY 13 0.85 0.80 FY 10 FY 11 FY 12 FY 13 47.5 47.0 46.5 46.0 45.5 45.0 44.5 44.0 43.5 43.0 Cost to Income 47.3 45.8 45.1 44.7 FY 10 FY 11 FY 12 FY 13 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 Net NPA 0.39 0.39 0.24 0.68 FY 10 FY 11 FY 12 FY 13 5
Strategy Growth with quality 30% from wholesale banking ; 30% from SME and 40% from retail by FY15 Credit growth rate of 25% till FY15; NIM to be maintained in 3% range Fee income to be 10% NNPA to be under 0.50% Strong distribution network 50 addition to branches, 100 ATM additions per year Proportion of branches outside Kerala : 1:1 Second largest player in Kerala among private banks Low cost liabilities and Cost/Income Priority banking in 80 centres; NRE banking to attract deposits CASA ratio to increase 1% per annum Cost/Income to decline 1% per annum 6
Business Performance
Financial Highlights As on Dec 2012 Balance Sheet Overview Rs. In Crore Q3FY13 Q3FY12 Y-o-Y (%) Q2FY13 Q-o-Q (%) Capital & Liabilities Capital 136 116 17% 137 0% Reserves & Surplus 2,824 2,007 41% 2,696 5% Deposits 38,940 33,834 15% 38,490 1% Borrowings 971 491 98% 738 32% Other Liabs. &Provisions 1,008 1,007 0% 974 3% Total 43,879 37,455 17% 43,035 2% Assets Cash & Balances with RBI 1,845 1,994-7% 2,346-21% Balances with Banks 1,516 814 86% 1,304 16% Investments 10,510 8,971 17% 10,285 2% Advances 29,039 24,710 18% 28,156 3% Fixed Assets 387 363 7% 381 1% Other Assets 582 603-3% 563 3% Total 43,879 37,455 17% 43,035 2% Business (Advances+Deposit) 67,979 58,544 16% 66,646 2% 8
Result Review Profit and Loss Account (Cumulative) Rs. In Crore Q3FY13 Q3FY12 Y-o-Y (%) Q2FY13 Q-o-Q (%) Net Interest Income 947 737 28% 595 59% Other Income 214 165 30% 148 45% Total Income 1,161 902 29% 743 56% Operating Expenses 519 413 26% 335 55% Operating Profit 642 489 32% 408 57% Provisions & Contingencies 127 67 90% 81 57% Profit before Tax 515 422 22% 327 58% Provision for Tax 167 142 18% 106 58% Profit after Tax 348 280 24% 221 58% 9
Other Performance Highlights Performance Highlights Dec-11 June-12 Sep-12 Dec-12 CRAR Basel 2 (%) 12.0% 13.2% 14.4% 13.8% RoAA (Annualised) 1.1% 1.2% 1.1% 1.1% NIM (%) 3.0% 3.2% 3.1% 3.2% Gross NPA (%) 0.9% 1.1% 1.7% 1.6% Net NPA (%) 0.2% 0.4% 0.9% 0.7% Provision Coverage 75.2% 67.7% 51.2% 58.6% CASA % 21.5% 21.1% 20.0% 20.4% 10 10
Composition of Other Income Composition of Other Income Rs. In Crore Q3FY13 Q3FY12 Y-o-Y (%) Q2FY13 Q-o-Q (%) Commission & Exchange 31 25 24% 21 48% Processing Fees 13 12 8% 8 62% Profit on Sale of Investments 44 32 38% 31 42% Foreign Exchange Profit 16 19-16% 12 33% Others 110 77 43% 76 45% Total 214 165 30% 148 45% 11
Trend in Cost & Yield (Annualized) Trend in Cost of Deposits Trend in Yield on Advances 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 1.00% Cost of Deposit 8.3% 7.8% 6.5% 6.4% Dec 2009 Dec 2010 Dec 2011 Dec 2012 13.00% 12.50% 12.00% 11.50% 11.00% 10.50% 10.00% 9.50% Yield on Advances 12.8% 12.3% 11.4% 10.7% Dec 2009 Dec 2010 Dec 2011 Dec 2012 12
Break-up of Provision (other than tax) (Quarter alone) Rs. In Crore Particulars 3Q FY 13 3Q FY12 2Q FY13 For NPA advance 26.0 4.8 54.8 For Depreciation on Investments 1.5 9.6-3.8 For standard assets 9.8 7.0 4.9 For Restructured advances 8.2-1.6 0.0 Others 0.1 2.3 0.0 Total Provisions and Contingencies 45.6 22.1 55.9 13 13
Composition of Loan Book 35000 Rs. In Crore 120% In % 30000 100% 25000 8049 80% 27% 35% 27% 20000 15000 10000 5000 5202 4415 9413 8668 3899 12322 4765 16736 60% 40% 20% 23% 16% 49% 50% 16% 57% 0 0% Dec'10 Dec'11 Dec'12 Dec'10 Dec'11 Dec'12 Retail Adv SME & Agri Corporate Retail Adv SME & Agri Corporate Retail Advance - exposure less than Rs. 5 Crore 14
Advances Composition (Dec 2012) Rs. In Crore Sector Total % to total Agriculture 1,550.4 5.2 MSME 3,278.5 11.1 Large Scale Industries 5,699.3 19.3 Housing 1,538.6 5.2 Commercial Real Estate 150.9 0.5 Food Credit 613.1 2.1 Infrastructure 5,025.2 17.0 Gold Loan 6,538.2 22.1 FSLD 796.0 2.7 UBP/LC Bills 2,435.1 8.2 Miscellaneous 1,924.7 6.6 Total 29,550 100 15
Strong Core Capital (Tier 1 & Tier 2 CRAR) 14% 12% 10.80% 11.54% 10.90% 12.32% 11.78% 10% 9.61% 8% 6% 4% 2.68% 2.42% 2.46% 2.26% 2.11% 2.07% 2% 0% Sep-11 Dec-11 Mar-12 Jun/12 Sep/12 Dec/12 Tier 1 CRAR Tier 2 CRAR Quarterly data for Tier I excludes profit for the period Strong Core Capital. Low Dependence on Capital Instruments 16
Branch Network No. of Branches North 46 South 628 East 23 West 44 Total 741 Target 1:1 Outside Kerala 17
Strong Retail Franchise Total ATM Network Total Branch Network 900 800 700 600 500 400 300 280 373 489 663 780 800 700 600 500 400 300 530 580 641 700 741 200 200 100 100 0 0 FY 09 FY 10 FY 11 FY 12 FY 13 FY 09 FY 10 FY 11 FY 12 FY 13 FY 13 denotes position as on 31 st December 2012 (Q3FY13) ATM : Branch ratio above 1.0x 18
Marquee Investor List Corp & Banks, 9.4 Others, 2.7 Public, 31.9 Major Institutional Shareholders FII, 44.8 Domestic, 8.9 NRI, 2.3 Strong Institutional Ownership 19
Recognitions BUSINESSWORLD INDIA s BEST BANK 2010 AWARD to SOUTH INDIAN BANK TECHNOLOGY EXCELLENCE AWARD 2011-12 FROM IDRBT SOUTH INDIAN BANK BAGS TWO PRESTIGIOUS D&B BANK AWARDS 20