Axis Bank Limited · NSE:AXISBANK
Axis Bank — Investor Day (November 2023)
29 slides from Axis Bank's investor day presentation, Nov 23, 2023
Slide 1: Bharat Banking: Building at scale, profitably
Bharat Banking Building at scale, profitably ANALYST DAY 2023 November 23, 2023 OM Axis Bank Document Classification | Confidential 1
Slide 2: Agenda
1 Bharat: A big opportunity 2 Bharat Banking: Progress Made Agenda 3 Building distinction to scale, profitably 4 Bharat Banking: How we envision? 5 Conclusion Axis Bank Document Classification | Confidential
Slide 3: Section 1: RuSu Markets: Continues to be a growing opportunity
Section-1 RuSu Markets: Continues to be a growing opportunity
Slide 4: Pvt. Sector banks growing faster in RuSu markets and gaining market share
Pvt. Sector banks growing faster in RuSu markets & continues to gain market share in both credit & deposits Market Share of Credit in RuSu Market Share of Deposits in RuSu CAGR CAGR 14.2% 12.6% 13.6% 18.4% 25.6% +21% 18.9% +17% 73.4% 77.3% 75.9% 68.4% 70.2% +9% 60.6% +9% Mar'16 Mar'18 Mar'23 Mar'16
Slide 5: Favorable external tailwinds and internal strength make a case to invest and grow in RuSu
Favorable external tailwinds and internal strength makes a strong case to invest & grow in RuSu markets Rise of new distribution models such Large govt. inflows into RuSu markets Have built a deep distribution in Bharat as CSC Agri Stack being built at a pan India Diversification of income from agri
Slide 6: Section 2: Progress on the areas of delivery
Section-2 Progress on the areas of delivery
Slide 7: Bharat Banking: A customer centric framework connecting all parts of the bank
Bharat Banking- A customer centric framework that is connecting all parts of the bank Purpose of Bharat Banking is to enable success of our customers in Bharat, in both retail and institutional segments, by providing best in class products, services and advisory in a seamless, digital manner Commerc
Slide 8: In the midst of the transformation journey, witnessing greenshoots
We are in the midst of the transformation journey and witnessing greenshoots across business lines What we said? Started Stage Completed 1 Becoming a growth engine of the bank 2 Expanding the risk adjusted NIM of the bank 3 Making the bank organically self sufficient in PSL 4 Building a low-cost dis
Slide 9: Becoming a growth engine of the bank
1 Becoming a growth engine of the bank CAGR Bharat Banking Retail Assets Gross MEB (INR’Cr) Addition to Book +200x 100x +36% +3x rate of growth in last +11% 2 years compared to previous period Sep'17 Sep'18 Sep'19 Sep'20 Sep'21 Sep'22 Sep'23 Particulars Sep’21 Sep’23 Delta Bharat Banking (BB) Branch
Slide 10: Growth is across products, higher than the industry average
1 Growth is across products, higher than the industry average of 16% YoY in FY23 and 13% 5 year CAGR in RuSu markets H1 YoY Gross H1 YoY Disb. Book Growth Growth Microfinance Other Retail Assets Retail +36% +27% from BB branches Bharat Enterprises +57% Cards +29% Gold Loans +32% CSC Disb. +3x Farm F
Slide 11: Expanding the risk adjusted NIM of the bank
2 Expanding the risk adjusted NIM of the bank Scaled to H1FY22 as 100 Net Interest Income 163 100 +63% +115bps higher yield in H1FY24 in Bharat compared to non-Bharat markets H1FY22 H1FY24 Scaled to H1FY22 as 100 Operating Income 168 Boosting fee income by existing and new avenues (trade & forex) 10
Slide 12: Making the bank organically self sufficient in PSL
3 Making the bank organically self sufficient in PSL 60% Overall PSL Penetration of the bank 40% 20% 58% increase in penetration rates in Q2FY24 v/s FY21 & self sufficient at an 0% FY21 FY22 FY23 Q2FY24 overall level 21% Agri PSL Penetration of the bank 14% 7% 88% increase in Agri PSL penetration ra
Slide 13: Building a low-cost distribution model with digital at the core
4 Building a low-cost distribution model with digital at the core Scaled to H1FY22 as 100 Opex to Avg. Book 100 Delivered strong growth at better unit 92 -8% economics H1FY22 H1FY24 Scaled to H1FY22 as 100 Operating Profit 173 Delivered key digital Initiatives: 100 Co-lending, Gold Loan, eKYC CASA,
Slide 14: Increasing product depth by moving from product to customer level view
5 Increasing product depth by moving from a product to a customer level view Bharat Banking Business Head Bharat – Retail Lending Bharat – Microfinance Retail Established the organization & Wholesale structure that allows to work across the Bharat – Enterprises & Bharat – Centre of bank Institutiona
Slide 15: Scaled up several cross-sell initiatives
5 Scaled up several cross-sell initiatives Gold Loan Cross-sell Disb. as % of Overall 10% Established 5 new prop channels in the 3% +7pp bank cross selling gold loans H1FY22 H1FY24 Scaled to H1FY22 as 100 Liability NoA from Asset Teams 598 +498% Asset led liability model established for 100 NTB asse
Slide 16: Section 3: Building distinction to accelerate growth, profitably
Section-3: Building distinction to accelerate growth, profitably
Slide 17: Six key pillars to create distinction and accelerate profitable growth
Six key pillars to create distinction and accelerate profitable growth in Bharat Pillar Started Stage Completed 1 Multi product partnerships network 2 Bharat Ecosystem 3 Customer centric propositions 4 Best in class platforms 5 Digital Transformation 6 Deepen depth of distribution & customer relatio
Slide 18: Creating a multiproduct partnership architecture to deepen distribution
1 Creating a multiproduct partnership architecture to deepen distribution Started witnessing greenshoots in several Live partnerships Distribution 8+ CSC backed by strong growth momentum Networks ▪ 3x YoY growth in disb. in H1FY24 ▪ 90k+ liabilities NoA in H1FY24 Rural ▪ 24+ products sourced from th
Slide 19: Building a robust Bharat Ecosystem
2 Building a robust Bharat Ecosystem Customised prop. data driven Quick scale-up High product penetration Deep reach lending programs Large Agri ▪ Customised FPO product for ITC (Live) 1200 FPO and 8 Lakh farmers Output ▪ Retail credit & deposit products to the farmer (Live) on the platform Ecosyste
Slide 20: Creating customer centric propositions
3 Creating customer centric propositions Live WIP Our new rural branch Entering new segments Agri Infra Financing eKYC CASA During working hours Sampann savings account FPO Financing Co-lending Small ticket business loans Metal Pledge financing eKYC FD & RD Deepen relationships in the existing segme
Slide 21: Best in class platform to accelerate growth
4 Best in class platform to accelerate growth Co-lending (Live in Mar’23) eKYC platform (Live in Aug’22) ▪ Partnering with NBFCs’ to jointly disburse loans to ▪ Sourcing customers using Aadhaar biometric the borrower through a middle layer of technology framework from the partner location & all the
Slide 22: Digital transformation of the business across all customer journeys
5 Digital transformation of the business across all customer journey Omnichannel Multi-product Vernacular Gold Loans Phase-1 (Live), Phase-2 (Nov’23) and Full coverage (Dec’23) KCC Digital KCC in partnership with RBI-Innovation hub (Go-live in Q4) Farm Mech. Revamped journey on an industry leading p
Slide 23: Deepen distribution and customer relationship
6 Deepen distribution and customer relationship Connecting the dots Mandi Mitra Model Asset led liability model Figures of a Trading of Agri Allied Product client of Axis Bank in Gujarat Pilot launched in 7 Mandis, increased Improving penetration in the market share in all NTB and ETB asset customer
Slide 24: Section 4: How do we see the future?
Section-4: How do we see the future?
Slide 25: Transforming the business in the next 12-18 months to accelerate growth
We envision to transform the business in the next 12-18 months that will significantly accelerate growth Key drivers to transform the business ▪ Fully digital customer journey for all products ▪ Omnichannel experience across channels Digital journeys Partnerships Ecosystem Best in class ▪ Multi prod
Slide 26: Section 5: Conclusion
Section-5: Conclusion
Slide 27: Building a strong business over the next 3-4 years
Our endeavor is to build a strong business over the next 3-4 years… Growing the balance sheet at 2x the industry average Self sufficient in organic PSL compliance across segments Building an end to end omnichannel digital delivery model Scaling up multiple ecosystems in the RuSu markets Expand bank
Slide 28: Thank You
நன்றி ಧನ್ಯ ವಾದಗಳು धन्यबाद നന്ദി ధన్య వాదాలు આભાર Thank You धन्यवाद ਤੁ ਹਾਡਾ ਧੰਨਵਾਦ ধন্যবাদ ଧନ୍ୟବାଦ ধন্যবাদ شکریہ Axis Bank Document Classification Analyst |Day Confidential 2023 28
Slide 29: Glossary
Glossary Acronym Full Form AIF Agriculture Infrastructure Fund BCBO Business Correspondent Banking Outlets CASA Current Account and Savings Account CSC Common Service Network ECLGS Emergency Credit Line Guarantee Scheme ENAM Electronic National Agriculture Market ESDP Entrepreneurship Skill Developm