Axis Bank Limited · NSE:AXISBANK
Axis Bank — Non-Deal Roadshow (February 2016)
32 slides from Axis Bank's roadshow presentation, February 2016
Slide 1: Investor Presentation
Investor Presentation February 2016
Slide 2: Safe Harbor
Safe Harbor Except for the historical information contained herein, statements in this release which contain words or phrases such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “futu
Slide 3: Contents
Contents • Inflation and Rate environment Key Macro Trends • Sectoral Credit and Deposit metrics Business Model & Strategy Financial Snapshot 2
Slide 4: Benign inflation trends have created room for monetary easing
Benign inflation trends have created room for monetary easing Inflation of 4.9% in CY15 significantly lower than 9.6%. in CY12 125 bps cumulative rate cut by RBI in 2015 responded with significant transmission of 65 bps by Axis Bank Repo Rate Axis Bank Base Rate 10% Food+ (45.9%) Fuel+ (6.8%) 10.5%
Slide 5: Sector Credit and Deposit performance has improved recently
Sector Credit and Deposit performance has improved recently 20% Non-food credit growth (%, YoY) • Non-food credit growth has revived to ~12% Deposit growth (%, YoY) 17% • Deposits growth has marginally have recovered to ~11% • Sectorally, the credit story is all in Retail as FYTD16 credit driven by
Slide 6: Contents
Contents Key Macro Trends Business Model & Strategy Financial Snapshot 5
Slide 7: Leading Universal Banking Franchise
Leading Universal Banking Franchise Snapshot (As on December 31, 2015) Key financials ` bn US$ bn Total Assets 4,964 75 Net Advances 3,154 48 Corporate banking Retail banking Subsidiaries Total Deposits 3,383 51 Corporate Credit Retail Liabilities 100% Axis Capital (1) Net Profit (9MFY16) 61 0.9 SME
Slide 8: 9MFY16 Key Highlights
9MFY16 Key Highlights Retail franchise continues to show healthy traction ̶ Daily Average CASA was 40% of Total Deposits, CASA and Retail Term Deposits constituted 79% of Strong Retail Franchise Total Deposits ̶ Savings Deposits in Q3 grew 16% YOY, while Retail Term Deposits grew 18% YOY ̶ Retail
Slide 9: Consistent Growth across Business Metrics
Consistent Growth across Business Metrics... Assets Advances 4,964 3,154 4,619 2,811 3,832 2,301 3,406 1,970 2,856 1,698 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Deposits Net Profit 74 3,383 3,224 62 61 2,809 2,526 52 2,201 42 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 FY12 FY13
Slide 10: Supported by Motivated Employees and Experienced Senior Management
...Supported by Motivated Employees and Experienced Senior Management Number of Employees Strong brand attracting good quality talent pool High employee satisfaction resulting in relatively low attrition 47,876 ̶ Attrition level particularly low in senior and 42,420 42,230 middle management cadr
Slide 11: Healthy Capital Profile & Stable Shareholder Returns
Healthy Capital Profile & Stable Shareholder Returns Capital Adequacy Shareholding Structure(1) Tier 1 Capital Ratio Tier 2 Capital Ratio 17.00% 16.07% 15.47% Global Depository 15.09% SUUTI 13.66% Receipts 4.77% Others 11.55% 3.45% 3.02% 3.12% 3.60% Life Insurance 15.36% 4.21% Corporation Domestic 1
Slide 12: Business Strategy along Four Key Themes
Business Strategy along Four Key Themes Leveraging domestic growth opportunities Continue to build and Build a full-service offering to strengthen Retail Banking SME customers franchise Capture end-to-end Leverage strengths in opportunities in Payments Corporate Banking across customer segments 11
Slide 13: Pan-India Distribution Network Complemented by Technology Driven Alternate Channels
Pan-India Distribution Network Complemented by Retail Banking Technology Driven Alternate Channels Alternate Channels Increasing presence in rural & semi-urban areas Branches 1,622 1,947 2,402 2,589 2,805 10% 14% 24% 22% 21% 32% 31% 28% 29% 30% 30% 28% 24% 24% 23% Phone Banking Customer ATMs 24 hour
Slide 14: Leveraging Strong Brand Recall across Products
Retail Banking Leveraging Strong Brand Recall across Products Badhti Ka Naam Zindagi... or Progress On... Capturing End-to-End Customer Requirements Savings Accounts Save with security Fixed Deposits, Gold, Debit, Credit & Ranked amongst the Top 75 safest banks in the world Retail Broking Prepaid
Slide 15: Resulting in a Robust Liabilities Franchise
Retail Banking …Resulting in a Robust Liabilities Franchise Savings Deposits Current Account Deposits 927 (` bn) 561 (` bn) 883 536 483 487 778 638 397 517 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Daily Average CAGR (FY12-15): 19% Daily Average CAGR (FY12-15): 8% Retail
Slide 16: Growing Retail Advances
Retail Banking Growing Retail Advances Retail Advances Portfolio Composition of Retail Advances Non-schematic (` bn) 1,258 Loan against loans & others 1,119 Property 11% 880 8% 655 Personal Loans & Credit Cards Housing Loans 487 11% 47% Auto Loans 8% Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Retail agricul
Slide 17: Full-service Offering to SME Customers
SME Full-service Offering to SME Customers Lending Other offerings Diversified portfolio across 3 segments: Medium Enterprises Commercial banking products Group, Small Enterprises Group and Supply Chain Finance ̶ Current accounts, forex, trade services and CMS Driven through 61 SME centres and
Slide 18: Comprehensive Corporate Banking Solutions
Comprehensive Corporate Banking Solutions… Corporate Banking Corporate Banking Advances Growth Presence across the value chain Corporate Credit SME 1,896 1,677 (` bn) 412 1,420 1,315 415 1,211 332 398 300 Transaction Investment Trustee Credit Syndication Treasury 1,484 Banking Banking Services 1,262
Slide 19: with an Emphasis on Risk Management
…with an Emphasis on Risk Management Corporate Banking Rating Distribution - Corporate Credit 1 (%) Secured Loans as a % of Total Aggregate Advances <BBB or unrated BBB A AA AAA 8 9 11 10 11 86% 83% 83% 79% 19 16 15 20 20 40 37 35 32 31 32 30 29 27 30 6 9 9 11 3 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Ma
Slide 20: Capturing End-to-End Opportunities in Transaction Banking
Capturing End-to-End Opportunities in Transaction Banking… Payments Current Account Deposits Current (` bn) Accounts 561 536 483 487 Foreign Govt Exchange 397 Business Solutions Transaction Banking Capital Cash Market Manage- Solutions ment Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 CMS Accounts Trade 27,27
Slide 21: Establishing Leadership in the Retail Payments Segment
… and Establishing Leadership in the Retail Payments Segment Payments Market Leader in Retail Payments Debit Cards One of the largest issuers of debit cards & 5th largest credit 14.5 14.3 14.3 card issuer in the country with a card base of around 2.2 mn 13.3 Multi Currency Foreign currency cards
Slide 22: Digital Banking
Digital Banking Mobile Banking Spends Channel Mix – Q3FY16 (` crores) Branch 14% Digital 49% ATM 37% 41% YOY growth 16% ATM 1% Digital Branch Total -1% 1 Note: Based on number of all financial transactions performed by individual customers
Slide 23: Contents
Contents Key Macro Trends Business Model Financial Snapshot 22
Slide 24: Robust Growth in Core Revenue and Diversified Fee Income Franchise
Robust Growth in Core Revenue and Diversified Fee Income Franchise Operating Revenue Operating Profit Net Interest Income Non-Interest Income 134 (` bn) (` bn) 115 117 226 194 190 93 162 84 74 134 74 67 65 54 120 142 123 80 97 FY12 FY13 FY14 FY15 9MFY16 FY12 FY13 FY14 FY15 9MFY16 Fee Income Fee Prof
Slide 25: Margins Driven by Low Cost Deposits and Enhanced Operational Efficiency
Margins Driven by Low Cost Deposits and Enhanced Operational Efficiency Current and Savings Bank Deposits Cost of Funds and Net Interest Margin (%) Current Deposits Savings Deposits Cost of Funds Net Interest Margin 6.6 (` bn) 6.3 6.2 6.2 6.0 1,444 1,463 1,265 1,121 914 883 927 638 778 517 3.9 3.9 3
Slide 26: Stable Asset Quality
Stable Asset Quality NPAs (Amounts) NPAs (%) Gross NPA Net NPA Gross NPA Net NPA 1.68% (` bn) 57.2 1.34% 1.22% 41.1 1.06% 0.94% 31.5 0.75% 23.9 25.1 18.1 0.44% 13.2 0.40% 10.2 0.32% 7.0 0.25% 4.7 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Mar-12 Mar-13 Mar-14 Mar-15 Dec-15 Restructured Assets Provisioning C
Slide 27: Delivering Profitable Growth
Delivering Profitable Growth Indian banking opportunity remains attractive with long term structural drivers in place Well positioned to capture both consumption and investment themes through a comprehensive product suite Strong retail franchise that continues to show traction Steady and systematic
Slide 28: Appendix
Appendix 27
Slide 29: Summary Financials: Balance Sheet
Summary Financials: Balance Sheet ` bn US$ mn FY12 FY13 FY14 FY15 9MFY16 FY12 FY13 FY14 FY15 9MFY16 Capital and liabilities Shareholders’ funds 228 331 382 447 510 3,448 5,005 5,777 6,753 7,716 Deposits 2,201 2,526 2,809 3,224 3,383 33,271 38,185 42,468 48,741 51,144 Borrowings 341 440 503 798 920 5
Slide 30: Summary Financials: Income Statement
Summary Financials: Income Statement ` bn US$ mn FY12 FY13 FY14 FY15 9MFY16 FY12 FY13 FY14 FY15 9MFY16 (1) Interest Income 220 272 306 355 301 3,325 4,109 4,632 5,363 4,548 Interest Expense 140 175 187 213 178 2,113 2,648 2,825 3,213 2,692 Net Interest Income 80 97 119 142 123 1,212 1,461 1,807 2,15
Slide 31: Summary Financials: Key Ratios
Summary Financials: Key Ratios FY12 FY13 FY14 FY15 9MFY16 Profitability and efficiency (1) Return on average total assets 1.7% 1.7% 1.8% 1.8% 1.7% (2) Return on average net worth 21.2% 20.5% 18.2% 18.6% 17.6% (3) Net interest margin 3.6% 3.5% 3.8% 3.9% 3.9% (4) Cost income ratio 45% 43% 41% 41% 38%
Slide 32: Thank You
Thank You 31