IndusInd Bank Ltd. · NSE:INDUSINDBK
IndusInd Bank — Q4 FY2017 Earnings Presentation
56 slides from IndusInd Bank's earnings presentation, Apr 19, 2017
Slide 1: Investor Presentation
Investor Presentation April 19, 2017
Slide 2: Presentation Agenda
Presentation content Planning Cycle 3 closure and summary performance Presentation Agenda Q4 FY-17 results Planning Cycle 4 – summary , ambition and initiatives 2
Slide 3: Q4 FY17 marks the end of Planning Cycle 3
Q4 - FY17 marks the end of our 3-year Planning Cycle 3 (PC3) themed “Market Share with Profitability” to Double the Bank 3
Slide 4: Delivered Scale
Planning Cycle 3 (2014-17) Delivered Scale Revenue (Rs cr) Networth (Rs cr) 10,234 20,272 CAGR of CAGR of 29% 33% 4,781 8,646 2014 2017 2014 2017 Deposits (Rs cr) Advances (Rs cr) 126,572 CAGR of CAGR of 113,081 28% 27% 60,502 55,102 2014 2017 2014 2017 4
Slide 5: Delivered Profitability
Planning Cycle 3 (2014-17) Delivered Profitability NIMs (%) RoA (%) 1.86 3.99 1.81 3.71 2014 2017 2014 2017 RoE (%) Cost / Income (%) QIP & Pref. Allot. 47.1 46.7 17.48 Rs 5,081 crs 15.26 2014 2017 2014 2017 5
Slide 6: Doubled the Bank!
Planning Cycle 3 (2014-17) Doubled the Bank ! Branches Clients (mn) 1,200 9.5 602 4.5 2014 2017 2014 2017 Profits (Rs cr) 2,868 1,408 2014 2017 6
Slide 7: Plan vs Outcome FY14-FY17
Planning Cycle 3 (2014-17) Plan vs Outcome FY14-FY17 Outcome/CAGR Loan Growth 25% - 30% 27% CASA Ratio > 35% 36.9% Resulting in Fee Growth To Exceed Loan Growth 29% Branch Network To Double from 602 1,200 Customer Base To Double from 4.5mn 9.5mn 7
Slide 8: Key Achievements
Planning Cycle 3 (2014-17) Key Achievements 4% NIM Rs. 5,081cr Responsive Growth Capital Innovation e.g. Welcomed 10,000 Fingerprint Staff to IndusInd Tractor Finance Banking, Video Family Mobile Branch Launch Banking Acquisition of RBS’ Diamond Global Markets GIFT City Branch Financing Revenues >$5
Slide 9: Q4-FY17 Results
Q4-FY17 Results eae) 9 Indusind Bank
Slide 10: Q4 – FY17 Performance Highlights
A quarter of solid core business performance Q4 – FY17 Performance Highlights Persistent uptrend in Net Interest Income; Y-o-Y up by 31% and Q-o-Q up by 6% Core Fee growth 29% Y-o-Y and 13% Q-o-Q; Non-Interest Income to Revenue back to 42% Y-o-Y PAT growth up by 21% NIM Y-o-Y up by 6 bps t
Slide 11: How We Measure Up On Key Metrics
How We Measure Up On Key Metrics Net Interest Margin (NIM) RoA RoE* 1.90% 1.94% 1.93% 1.88% 1.74% 15.72% 3.94% 3.97% 4.00% 4.00% 4.00% 15.38% 15.12% 15.05% 14.56% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 *on average equity Cost / Income
Slide 12: Ratings
Ratings CRISIL AA + for Infra Bonds program CRISIL AA for Additional Tier I Bonds program CRISIL A1+ for certificate of deposit program IND AA+ for Senior bonds program by India Ratings and Research IND AA for Additional Tier I Bonds program by India Ratings and Research IND A1+ for Shor
Slide 13: Financial Performance
Financial Performance is Indusind Bank
Slide 14: Steady Headline Numbers for Q4-FY17
Steady Headline Numbers for Q4-FY17 Y-o-Y Growth Q-o-Q Growth Net Interest Rs 1,667 crs 31% 6% Income Fee Income Rs 1,211 crs 33% 19% Revenue Rs 2,879 crs 32% 11% Operating Profit Rs 1,572 crs 37% 15% Net Profit Rs 752 crs 21% - 14
Slide 15: Steady Headline Numbers for FY 2016-17
Steady Headline Numbers for FY 2016-17 Y-o-Y Growth Net Interest 34% Rs 6,063 crs Income Fee Income Rs 4,171 crs 27% Revenue Rs 10,234 crs 31% Operating Profit Rs 5,451 crs 32% Net Profit Rs 2,868 crs 25% 15
Slide 16: Top line momentum
Top line momentum Y-o-Y Growth Q-o-Q Growth Advances Rs 1,13,081 crs 28% 10% Corporate Rs 67,552 crs 30% 13% Advances Consumer Finance Rs 45,529 crs 25% 6% Advances Deposits Rs 1,26,572 crs 36% 6% CASA Rs 46,646 crs 43% 6% SA Rs 27,037 crs 57% 7% Borrowings Rs 22,454 crs (10%) 11% 16
Slide 17: Balance Sheet
Balance Sheet (Rs Crs) * Q4FY17 Q4FY16 Y-o-Y (%) Q3FY17 Q-o-Q (%) Capital & Liabilities Capital 598 595 1% 597 - Reserves and Surplus 20,048 17,101 17% 19,286 4% Deposits 1,26,572 93,000 36% 1,19,218 6% Borrowings 22,454 24,996* (10%) 20,303 11% Other Liabilities and Provisions 8,976
Slide 18: Profit and Loss Account – Q4FY17
Profit and Loss Account – Q4FY17 (Rs Crs) Q4FY17 Q4FY16 Y-o-Y (%) Q3FY17 Q-o-Q (%) Net Interest Income 1,667 1,268 31% 1,578 6% Other Income 1,211 913 33% 1,017 19% Total Income 2,879 2,181 32% 2,595 11% Operating Expenses 1,307 1,030 27% 1,232 6% Operating Profit 1,572 1,151 37% 1
Slide 19: Profit and Loss Account – FY 2016-17
Profit and Loss Account – FY 2016-17 (Rs Crs) 2016-17 2015-16 Y-o-Y (%) Net Interest Income 6,063 4,517 34% Other Income 4,171 3,297 27% Total Income 10,234 7,814 31% Operating Expenses 4,783 3,672 30% Operating Profit 5,451 4,141 32% Provisions & Contingencies 1,091* 672 62% Profit befo
Slide 20: Key Financial Indicators
Key Financial Indicators Q4FY17 Q4FY16 Q3FY17 Return on Assets 1.74% 1.90% 1.88% ROE (On average equity) 15.12% 14.56% 15.72% Cost / Income Ratio 45.38% 47.22% 47.47% Net Interest Margin 4.00% 3.94% 4.00% Net NPA 0.39% 0.36% 0.39% EPS (annualized, Rs. per share) 50.28 41.72 50.28 Capital + Reserves
Slide 21: Well Diversified Loan Book
Well Diversified Loan Book Loan Book (Rs crs) 113,081 113,081 102,770 88,419 60% 52% 68,788 59% 55,102 58% 44,321 59% 55% 51% 40% 48% 42% 41% 49% 45% 41% FY13 FY14 FY15 FY16 Dec-16 Mar-17 Mar-17 (BBG forming part Consumer Finance Division Corporate & Commercial Banking of Consumer) (Rs crs) Small (R
Slide 22: Diversified Corporate Loan Book
Diversified Corporate Loan Book Gems and Jewellery 6.14% Lease Rental 5.08% Telecom- Cellular 3.49% Microfinance 2.52% Services 2.26% Real Estate 2.02% Steel 1.84% Constn related to infra.- EPC 1.68% Food Beverages / processing 1.53% Housing Finance Companies 1.32% Media,Entertainment & Advt 1.17% A
Slide 23: Well Rated Corporate Portfolio
Well Rated Corporate Portfolio 24% P E 22% R C E 20% Investment Grade Sub Investment Grade N T 18% O 16% F R 14% Unsecured Non Fund Based % A Secured Non Fund Based % T 12% Unsecured Fund Based % E D 10% Secured Fund Based % P O 8% R T 6% F O 4% L I O 2% 0% IB1 IB2+ IB2 IB2- IB3+ IB3 IB3- IB4+ IB4 I
Slide 24: Improving CASA profile
Improving CASA profile Building CASA traction CASA Uptick Expanding branch network 50,000 45,000 35.0% 35.2% 34.4% 36.5% 37.1% 36.9% 38% Focus on target market segments 40,000 33% 35,000 46,646 Government business 30,000 41,034 44,162 27% 25,000 35,043 Capital market flows 20,000 30,232 32,7
Slide 25: Other Income
Other Income (Rs Crs) Q4FY17 Q4FY16 Y-o-Y (%) Q3FY17 Q-o-Q (%) Core Fee 996 774 29% 885 13% Securities/MM/FX 215 139 55% 132 63% Trading/Others Total 1,211 913 33% 1,017 19% 25
Slide 26: Diverse Revenues from Core Fee Income
Diverse Revenues from Core Fee Income (Rs crs) Q4FY17 Q4FY16 Y-o-Y(%) Q3FY17 Q-o-Q(%) Trade and Remittances 121 97 25% 106 14% Foreign Exchange Income 170 140 21% 179 (5%) Distribution Fees 241 138 74% 181 33% (Insurance, MF, Cards) General Banking Fees 63 48 31% 64 (1%) Loan Process
Slide 27: Yield / Cost Movement
Yield / Cost Movement 11.41% 11.73% 9.27% Yield on Assets 9.19% Yield on Advances 6.08% 6.35% Cost of Deposits 5.19% 5.27% Cost of Funds Q4FY17 Q3FY17 •Yield on Assets/Cost of funds are based on Total Assets/Liabilities Segment-wise Yield Q4FY17 Q3FY17 Outstanding Yield Outstanding Yield (Rs crs) (%
Slide 28: Credit Cost
Credit Cost (Rs crs) FY14 FY15 FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 FY17 Corporate Bank 94 144 258 65 74 76 187 401 Consumer Finance 170 195 244 80 78. 76 69 303 Gross Credit Costs 264 339 502 144 152 152 256 704 Gross Credit Costs 48 49 57 15 15 15 23 62 (Basis Points on Advances) Net Credit Cost 228 3
Slide 29: Loan Portfolio - Movement in NPA and Restructured Advances
Loan Portfolio - Movement in NPA and Restructured Advances (Rs crs) Q4FY17 Q3FY17 Corporate Consumer Total Corporate Consumer Total Opening Balance 473 498 971* 424 475 899* Additions 457 177 634 111 170 281 Deductions 386 164 550 62 147 209 Gross NPA 544 511 1,055 473 498 971* Net NPA 439 401 % of
Slide 30: NPA Composition – Consumer Finance
NPA Composition – Consumer Finance (Rs crs) Com. Const. Small LAP/HL/ Q4-FY17 Utility TW Cars Tractor Cards Total Vehicle Equip. CV PL Gross NPA 151 26 49 22 117 31 85 7 23 511 Gross NPA % 0.97% 1.12% 1.18% 0.90% 3.52% 0.66% 0.87% 0.37% 1.34% 1.12% Com. Const. Small LAP/HL/ Q3-FY17 Utility TW Cars T
Slide 31: CRAR
CRAR (Rs Crs) 31 Mar 17 31 Dec 16 Basel – III Basel – III Credit Risk, CVA and UFCE 1,22,036 1,14,872 Market Risk 6,669 5,442 Operational Risk 14,824 11,466 Total Risk Weighted Assets 1,43,529 1,31,780 Core Equity Tier 1 Capital Funds 20,125 19,430 Additional Tier 1 Capital Funds 1,000 - Tier 2 Capi
Slide 32: Distribution Expansion to Drive Growth
Distribution Expansion to Drive Growth Strengthening Distribution Infrastructure June 30, Sept 30, Dec 31, Mar 31, Particulars 2016 2016 2016 2017 Branch 1,004 1,035 1,075 1,200* Network ATMs 1,885 1,935 1,960 2036 *includes 105 specialized branches Note: Numbers given above are total • Branch/Repre
Slide 33: Shareholding Pattern
Shareholding Pattern March 31, 2017 NRIs/ Director/ Others, 2% GDR issue, Individuals, 7% 11% Promoters, 15% Private MFs / Banks/ Corporates, 10% Insurance Co, 13% FII*s, 43% *includes FPIs 33
Slide 34: Planning Cycle 4 (PC4) 2017-20
Planning Cycle 4 (PC4) 2017-20
Slide 35: Broad Themes
Planning Cycle 4 (2017-20) Strategy Market Share with Profitability Do More of the Same Strategy Digitize to Differentiate, Diversify and Create Domain Leadership Financing Livelihoods Broad Themes Finding Customers from Within Reengineering Our Businesses Sustainable Banking 35
Slide 36: Strategic Themes
Planning Cycle 4 (2017-20) Strategic Themes Rural Rebalancing Banking and of Loan Book Microfinance Internal Focus on Collaboration Sustainability Productivity and Cross Sell Enriching Digitization Client of Businesses Experience 36
Slide 37: Theme 1: Rebalancing of Loan Book
Planning Cycle 4 (2017-20) Theme 1: Rebalancing of Loan Book Loan Mix – Q4 FY17 Loan Mix – 2020 Ambition Non-Vehicle 1. Loan Against Property Non-Vehicle Retail * 2. Business Banking Retail *, 25% 3. Credit Cards 18% 4. Personal Loans 5. Commercial Cards 6. Loan Against Shares Corporate Banking 7. R
Slide 38: Theme 2: Rural Banking and Microfinance
Planning Cycle 4 (2017-20) Theme 2: Rural Banking and Microfinance Agri Business Group Inclusive Banking • Agriculture value chain Rural Branches Group • Commodity financing • Savings Accounts, PMJDY • Microfinance lending via • Corporate Agri-finance • Loan Against Rural Property Business Correspon
Slide 39: Theme 3: Digital Strategy
Planning Cycle 4 (2017-20) Theme 3: Digital Strategy An integrated Digital Strategy to extract significant value via: 1. Agility & Innovation as Service Differentiator 2. Operating Efficiency in Front & Back Office 3. Evolution to Online and Digital Channels 4. Partnering with the Digital Ecosyste
Slide 40: Theme 4: Internal Collaboration & Cross Sell
Planning Cycle 4 (2017-20) Theme 4: Internal Collaboration & Cross Sell Large & Growing Customer Base, Now Over 9.5mn ! Key Products: Vehicle Customers Vehicle loans (Stock >3mn; Loan Against Property Flow >1mn) Kisan Credit Cards Personal Loans Savings Account Microfinance Customers Retai
Slide 41: Theme 5: Focus on Productivity
Planning Cycle 4 (2017-20) Theme 5: Focus on Productivity Rapidly changing retail banking industry with evolving customer preferences Declining physical transaction volume and prodigious growth in mobile usage Future branch expansion will reflect this with leaner structures supported by digita
Slide 42: Theme 6: Customer Experience A Key Differentiator
Planning Cycle 4 (2017-20) Theme 6: Customer Experience A Key Differentiator Key Customer Experience Drivers Customer deepening due to better needs assessment and servicing Wider client coverage from client engagement managers (under CEM model) More financially active clients because of wider
Slide 43: Theme 7: Sustainable Banking
Planning Cycle 4 (2017-20) Theme 7: Sustainable Banking Regulatory Environmental Social Governance Compliance Projects Initiatives Operational Compliance Environment Afforestation Projects with Satpuda Board Level CSR Foundation and CERE. Financing Renewable Energy Products. Committee Market R
Slide 44: Pillars of Growth
Planning Cycle 4 (2017-20) Pillars of Growth Loan Growth 25% - 30% CASA Ratio 40% Exceed Balance Sheet Resulting in Revenue Growth Growth RoRWA > 2.4% Branch Network 2,000 Customer Base Double to >20mn 44
Slide 45: Ambition: 4D To Double the Bank
Planning Cycle 4 (2017-20) Ambition 4D To Double the Bank in terms of Clients Loans Profits 45
Slide 46: Accolades and New Initiatives
Accolades and New Initiatives
Slide 47: Accolades
Accolades IndusInd Bank’s #Jeetkahalla campaign won 3 PR awards at Annual Adverting Awards (The Abbys) at the Goa Fest 2017. Silver in 'Sponsorship' Category Awarded for efficiently creating awareness, which helped enhance the Bank's image in the Corporate sector Bronze in 'Integrated Campaign Led b
Slide 48: Accolades
Accolades IndusInd Bank won three awards at IBA Banking Technology Conference, Expo & Awards 2017. Winner • Best Technology Bank Runner Up • Best IT Risk and Cyber Security Initiative • Best Payment Initiatives IndusInd Bank awarded as the ‘1st Winner of Overall Excellence in Category of Best Bank F
Slide 49: Accolades
Accolades IndusInd Bank awarded as ‘Runner Up’ in 4 Categories at National Payments Excellence Awards 2016 in Small Banks Category • Excellent Performance in AEPS • Excellent Performance in CTS • Excellent Performance in NACH • Excellent Performance in NFS ATM Network 49
Slide 50: Accolades
Accolades IndusInd Bank awarded with ‘Outstanding Achievement in Practicing Excellent Workplace Culture in Health & Safety, Evolving Safe Work Practices in Operations’ at Energy and Environment Foundation Global Safety Awards 2017 IndusInd Bank bags two awards at ABP News BFSI Awards 2017 • Best Ban
Slide 51: Accolades
Accolades Mr. Romesh Sobti awarded as ‘The Best CEO (BFSI)’ at the Business Today Best CEO Awards 2016. IndusInd Bank features among Forbes’ Super 50 Companies in India. 51
Slide 52: Accolades
Accolades IndusInd Bank has been ranked No. 12 in the prestigious ‘Brandz Top 50 Most Valuable Indian Brands 2016’ as adjudged by Kantar Millward Brown and WPP with a brand value of $1.80bn - a growth of 18% from last year. IndusInd Bank was recognized as a ‘Symbol of Excellence’ in the Banking cate
Slide 53: Accolades
Accolades IndusInd Bank: winner of Celent Model Bank 2017 Award for Fraud Management and Cybersecurity 53
Slide 54: The World Champions Programme – Campaign Performance
The World Champions Programme – Cricket for the Blind CAMPAIGN PERFORMANCE CAMPAIGN Jan 31 to Feb 13,PERFORMANCE 2017 Overall 53M Impressions Website 3M Video Views 1.3L visits 7L Clicks 1.02L unique users HIGH IMPACT • SportsKeeda Over delivered by 56%. 5.3M Impressions • TOI Native road block over
Slide 55: Thank you
Thank you 8 Indusind Bank
Slide 56: Disclaimer
Disclaimer This presentation has been prepared by IndusInd Bank Limited (the “Bank”) solely for information purposes, without regard to any specific objectives, financial situations or informational needs of any particular person. All information contained has been prepared solely by the Bank. No in