Axis Bank Limited · NSE:AXISBANK
Axis Bank — Non-Deal Roadshow (October 2014)
31 slides from Axis Bank's roadshow presentation, October 2014
Slide 1: Delivering Profitable Growth
Delivering Profitable Growth October 2014
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 Key Macro Trends Business Model & Strategy Financial Snapshot 2
Slide 4: India Opportunity
India Opportunity High Savings Rate Favorable Demographics India’s savings rate as a % of GDP Population below 30 years as a % of total population (2010) HH Physical Saving HH Financial Saving Corporate Saving S Africa 60% Public Sector Saving Gross Domestic Saving India 59% 40% 33% 35% 37% 34% 34%
Slide 5: Key Opportunities for Banking Sector
Key Opportunities for Banking Sector Rapid Urbanization Private Investment in Infrastructure (Twelfth Plan) Rural Population (mm) Urban Population (mm) Urban GDP Share (%) (RHS) (` bn) Public Private 100% 5,533 1,400 4,734 4,862 1,200 590 80% 4,447 4,067 4,029 1,000 377 3,719 60% 3,402 3,408 290 800
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 September 30, 2014) Key financials ` bn US$ bn Total Assets 3,950 64 Net Advances 2,422 39 Corporate banking Retail banking Subsidiaries Total Deposits 2,837 46 Corporate Credit Retail Liabilities 100% Axis Capital (1) Net Profit (H1FY15) 33 0.5 SM
Slide 8: Key Highlights of Q2FY15
Key Highlights of Q2FY15 Strong retail franchise continues to show traction ̶ CASA and Retail Term Deposits constituted 79% of Total Domestic Deposits, Daily Average CASA Strong Retail was 40% of Total Deposits Franchise ̶ Savings Deposits grew 20% YOY as at end September 2014 and 19% YOY on daily
Slide 9: Consistent Growth across Business Metrics...
Consistent Growth across Business Metrics... Assets Advances 3,832 3,950 3,406 2,422 2,301 2,856 1,970 2,427 1,698 1,424 Mar-11 Mar-12 Mar-13 Mar-14 Sep-14 Mar-11 Mar-12 Mar-13 Mar-14 Sep-14 Deposits Net Profit 2,809 2,837 2,526 62 2,201 52 1,892 42 34 33 Mar-11 Mar-12 Mar-13 Mar-14 Sep-14 FY11 FY12
Slide 10: ...Supported by Motivated Employees and Experienced Senior Management
...Supported by Motivated Employees and Experienced Senior Management Number of Employees 42,420 44,058 Strong brand attracting good quality talent pool 37,901 31,738 High employee satisfaction resulting in relatively 26,435 low attrition ̶ Attrition level particularly low in senior and middle m
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% Global Depository 16.07% 15.90% Receipts SUUTI Others 12% Life Insurance 13.66% 4% Corporation & its 12.65% 4.77% 3.45% 3.33% 15% Domestic group entities 4
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 1,390 1,622 1,947 2,402 2,505 8% 10% 14% 24% 23% 32% 32% 31% 28% 29% 33% 30% 28% 24% 24% 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 & Retail Broking Prepaid Cards Spontaneous Brand Awareness Score has seen a C
Slide 15: …Resulting in a Robust Liabilities Franchise
Retail Banking …Resulting in a Robust Liabilities Franchise Savings Deposits Current Account Deposits (` bn) (` bn) 778 799 483 487 465 638 398 369 517 409 Mar-11 Mar-12 Mar-13 Mar-14 Sep-14 Mar-11 Mar-12 Mar-13 Mar-14 Sep-14 Daily Average CAGR (FY11-14) – 20% Daily Average CAGR (FY11-14) – 10% Reta
Slide 16: Growing Retail Advances
Retail Banking Growing Retail Advances Retail Advances Portfolio Composition of Domestic Retail Advances (` bn) 943 Non-schematic 880 Loan against loans & others Property Personal Loans 6% 8% 540 & Credit Cards 9% 376 278 Auto Loans Housing Loans 9% 53% Retail # # agricultural Mar-11 Mar-12 Mar-13 M
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 Driven through 42 SME centres and cells,
Slide 18: Comprehensive Corporate Banking Solutions…
Comprehensive Corporate Banking Solutions… Corporate Banking Corporate Banking Advances Growth Presence across the value chain Corporate Credit SME Note: All figures in ` bn 1,479 1,420 1,282 1,148 377 973 398 299 238 Business Investment Trustee 214 Credit Syndication Treasury Banking Banking Servic
Slide 19: …with an Emphasis on Risk Management
…with an Emphasis on Risk Management Corporate Banking Rating Distribution of Large and Mid-Corporate Advances1 (%) Secured Loans as a % of Total Aggregate Advances <BBB or unrated BBB A AA AAA 7 8 9 11 11 86% 82% 83% 83% 25 19 16 15 15 40 37 35 35 43 32 30 30 30 23 3 6 9 9 2 Mar-11 Mar-12 Mar-13 Ma
Slide 20: Capturing End-to-End Opportunities in Business Banking…
Capturing End-to-End Opportunities in Business Banking… Payments Current Account Deposits 483 487 465 Wide range of products with customized offerings 398 369 Growth aided by high-end premium products targeted at identified business segments Current Accounts Focused approach towards Corporates
Slide 21: … and Establishing Leadership in the Retail Payments Segment
… and Establishing Leadership in the Retail Payments Segment Payments Debit Cards Market Leader in Retail Payments 14.3 14.4 12.5 13.3 One of the largest issuers of debit cards 10.0 5th largest credit card issuer in the country with a card base of over 1.5 mn Travel currency cards in 12 foreig
Slide 22: Contents
Contents Key Macro Trends Business Model Financial Snapshot 21
Slide 23: 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 115 194 93 162 74 134 74 64 61 112 65 105 54 46 37 97 120 66 80 68 FY11 FY12 FY13 FY14 H1FY15 FY11 FY12 FY13 FY14 H1FY15 Note: All figures in ` bn Note: All f
Slide 24: 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 (%) Cost of Funds Net Interest Margin Current deposits Savings Deposits 6.6 6.3 6.2 6.2 5.0 1,265 1,264 1,121 914 3.7 3.8 3.9 778 3.6 3.5 638 778 799 409 51
Slide 25: Stable Asset Quality
Stable Asset Quality NPAs (Amounts) NPAs (%) 36.1 Gross NPA Net NPA (` bn) Gross NPA Net NPA 31.5 1.34% 1.22% 23.9 1.01% 1.06% 0.94% 18.1 16.0 11.8 10.2 0.44% 7.0 0.40% 0.26% 0.32% 4.1 4.7 0.25% Mar-11 Mar-12 Mar-13 Mar-14 Sep-14 Mar-11 Mar-12 Mar-13 Mar-14 Sep-14 Restructured Assets Provisioning Co
Slide 26: 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 27: Appendix
Appendix 26
Slide 28: Summary Financials: Balance Sheet
Summary Financials: Balance Sheet ` bn US$ mn FY11 FY12 FY13 FY14 H1FY15 FY11 FY12 FY13 FY14 H1FY15 Capital and liabilities Shareholders’ funds 190 228 331 382 418 3,077 3,692 5,360 6,186 6,769 Deposits 1,892 2,201 2,526 2,809 2,837 30,640 35,644 40,907 45,490 45,943 Borrowings 263 341 440 503 557 4
Slide 29: Summary Financials: Income Statement
Summary Financials: Income Statement ` bn US$ mn FY11 FY12 FY13 FY14 H1FY15 FY11 FY12 FY13 FY14 H1FY15 (1) Interest Income 152 220 272 307 169 2,462 3,563 4,405 4,972 2,737 Interest Expense 86 140 175 187 101 1,393 2,267 2,834 3,028 1,636 Net Interest Income 66 80 97 120 68 1,069 1,296 1,571 1,943 1
Slide 30: Summary Financials: Key Ratios
Summary Financials: Key Ratios FY11 FY12 FY13 FY14 H1FY15 Profitability and efficiency (1) Return on average total assets 1.7% 1.7% 1.7% 1.8% 1.7% (2) Return on average net worth 20.1% 21.2% 20.5% 18.2% 17.1% (3) Net interest margin 3.7% 3.6% 3.5% 3.8% 3.9% (4) Cost income ratio 43% 45% 43% 41% 42%
Slide 31: Thank You
Thank You 30