Axis Bank Limited · NSE:AXISBANK
Axis Bank — Axis Capital Conference, Mumbai (November 2015)
21 slides from Axis Bank's conference presentation, November 2015
Slide 1: Performance and Outlook
Performance and Outlook November 2015
Slide 2: Agenda
Agenda • Macro Picture • Performance Highlights • Q&A 2
Slide 3: Agenda
Agenda • Fundamentals (IIP) • Output conditions • Macro Picture • Rates • Inflation • Credit and Deposit growth • Performance Highlights • Q&A 3
Slide 4: Core fundamentals are improving mildly in recent months
Core fundamentals are improving mildly in recent months Growth in IIP and Components • On FYTD basis, IIP growth of 3.9% vs 2.9% last year • Manufacturing up almost 2X (4.1% vs 2.2%) • Electricity up sharply in recent months, particularly thermal power generation • Within manufacturing, capital good
Slide 5: However, output conditions are not showing a lot of strength
However, output conditions are not showing a lot of strength Sample output indicators • Cement production is negative y-o-y • Steel production is negative y-o-y • Cars and CVs have had a slightly better year so far, with an average of ~10% y-o-y growth Source: MOSPI; Axis Bank Research 5
Slide 6: RBI continues to ease rates and the easing is being transmitted by banks
RBI continues to ease rates and the easing is being transmitted by banks, both on deposit and lending side Repo Rate vs Axis Bank Lending and Deposit Rates (%) 11.00 • 50 bps rate cut by RBI in September 10.25 Base Rate 10.00 • Banks responded with significant transmission – 35 bps in the case of 9.
Slide 7: Benign inflation, but unevenly distributed
Benign inflation, but unevenly distributed … Urban vs Rural CPI Inflation and components … Source: MOSPI; Axis Bank Research • CPI Inflation is up over 5% YOY, driven primarily by food • Rural India continues to see much higher inflation than Urban India • Household inflation expectations, which had
Slide 8: Credit and deposit growth are near multi year lows
Credit and deposit growth are near multi year lows Banking system credit and deposit growth • Non-food credit growth at 9.2%; deposit growth at 11.1% • Sectorally, the credit story is all in Retail • Incremental credit to Industry and Services continue to be negative, YTD • Retail growth strong, at
Slide 9: Agenda
Agenda • Macro Picture • Performance Highlights • Q&A 9
Slide 10: The Bank continues to deliver strong growth and consistent shareholder returns
The Bank continues to deliver strong growth and consistent shareholder returns Consistently strong shareholder returns 1 1 2 3 1 Includes profits for the half year; 2 Include extension counters; 3 Includes overseas subsidiary in UK 10
Slide 11: H1 has seen satisfactory performance on most key outcomes
H1 has seen satisfactory performance on most key outcomes Strong financial performance in H1FY16 • Retail franchise continues to gain traction • Strong CASA and RTD growth • CASA+RTD = 80% of total deposits • Retail advances growth of 27% YOY • Retail Loans now 40% of total loans • Strong growth in
Slide 12: Core revenue streams have been growing steadily
Core revenue streams have been growing steadily, providing a powerful and predictable revenue engine … Net Interest Income (` Cr) • Steady growth in NII (CAGR of 21% since 2012) • Robust growth in core fee line • Continued diversification in sources of Fee Income • Increasing amounts of fee coming f
Slide 13: Resulting in steady PAT delivery year on year
… Resulting in steady PAT delivery year on year 13
Slide 14: Our time-tested CASA franchise drives steady cost of funds and healthy NIMs
Our time-tested CASA franchise drives steady cost of funds and healthy NIMs • CASA growth of 13% y-o-y on daily average basis • RTD forms 64% of total TDs • CASA+RTD forms 80% of total deposits 14
Slide 15: Asset quality of the Bank has been steady in turbulent times
Asset quality of the Bank has been steady in turbulent times • In Q2, the Bank sold two assets, worth `1,820 cr to ARCs, against a consideration of `650 cr. • We utilised `850 cr from contingent provisions built in prior quarters to absorb the write-off against these loans. 15
Slide 16: The retail franchise continues to grow strongly
The retail franchise continues to grow strongly Retail Lending Portfolio Mix 1 Card Spends 1 Including extension counters • 154 new branches opened in H1 • Continued momentum in Retail Advances – now 40% of advances book • Growth in Cards business continues to be extremely strong 16
Slide 17: Digital now front and center in the Bank's retail strategy
With Digital now front and center in the Bank’s retail strategy, clear customer outcomes are starting to become visible The Award- winning Mobile App Lime: An integrated money management platform Ping Pay: The multi-social Payments App 17
Slide 18: The Corporate Bank is delivering robust growth in a slow market
The Corporate Bank is delivering robust growth in a slow market Advances Transactions Fees Corporate Current Banking Accounts SME CMS Accounts SME loans (including non-retail agriculture loans) grew 9% YOY 18
Slide 19: Corporate Banking rating distribution steadily improving
The growth in Corporate Banking has come with steadily improving rating distribution, even in the face of significant downgrades Rating Distribution - Corporate Banking Rating Distribution - SME 7% 6% 8% 6% 6% 11% 11% 10% 11% 12% 16% 14% 15% 16% 15% 15% 15% 20% 18% 18% 35% 34% 31% 32% 31% 57% 60% 63
Slide 20: In Summary, the Bank is in a great position in the competitive environment
In Summary, the Bank is in a great position in the competitive environment • Financially strong: o Healthy capital ratios; strong profitability ratios; moderate risk levels • Conservative provisioning • Solid retail franchise: o Strong on both deposit and lending side; extensive network; loyal custo
Slide 21: Agenda
Agenda • Macro Picture • Performance Highlights • Q&A 21
Axis Bank — Axis Capital Conference, Mumbai (November 2015) on 6ix