Indusind Bank Ltd. · NSE:INDUSINDBK
Indusind Bank — Q3 FY2021 Earnings Presentation
48 slides from Indusind Bank's earnings presentation, Jan 29, 2021
Slide 1: Investor Presentation Q3-2020-21
Investor Presentation Q3-2020-21 January 29, 2021
Slide 2: Q3 FY21 Performance Highlights
Stable operational metrics in Q3 FY21 Q3 – FY21 Performance Highlights PPOP at Rs. 2,964 crs, grew by 7% YoY; PPOP / Assets at 3.74% amongst the industry highest NII at Rs. 3,406 crs ; up by 11% YoY. NIM at 4.12% Consol PAT at Rs. 830 crs after Covid provisions of Rs. 1,106 crs taking total
Slide 3: How We Measure Up On Key Metrics
How We Measure Up On Key Metrics Net Interest Margin (NIM) RoA RoE 4.15% 4.25% 4.28% 1.82% 4.16% 4.12% 15.62% 1.05% 0.85% 8.35% 0.69% 7.12% 5.86% 0.42% 3.69% Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 Cost / Income Net NPA Revenue / Emplo
Slide 4: Ratings
Ratings Domestic Rating: CRISIL AA + for Infrastructure Bonds program CRISIL AA for Additional Tier I Bonds program CRISIL A1+ for certificate of deposit program / short term FD programme IND AA+ for Senior bonds program by India Ratings and Research IND AA for Additional Tier I Bonds prog
Slide 5: Consolidated Financial Performance
Consolidated Financial Performance 5
Slide 6: Steady Headline Numbers for Q3 FY21
Steady Headline Numbers for Q3 FY21 Y-o-Y Growth Q-o-Q Growth Net Interest Rs. 3,406 crs 11% 4% Income Total Fee Income Rs. 1,646 crs (8%) 6% Revenue Rs. 5,052 crs 4% 5% Operating Profit Rs. 2,964 crs 7% 4% Net Profit Rs. 830 crs (37%) 25% 6
Slide 7: Top line momentum
Top line momentum Y-o-Y Growth Q-o-Q Growth Advances Rs. 2,07,128 crs - 3% Deposits Rs. 2,39,135 crs 10% 5% CASA Rs. 96,646 crs 5% 5% TD Rs. 1,42,489 crs 14% 5% Borrowings Rs. 48,622 crs 4% (7%) 7
Slide 8: Balance Sheet
Balance Sheet (Rs Crs) * Q3FY21 Q3FY20 Y-o-Y (%) Q2FY21 Q-o-Q (%) Capital & Liabilities Capital 757 693 9% 756 - Reserves and Surplus 39,100 32,789 19% 38,244 2% Share Warrant Subscription money 674 674 - 674 - Deposits 2,39,135 2,16,713 10% 2,27,884 5% Borrowings 48,622 46,813 4%
Slide 9: Profit and Loss Account – Q3 FY21
Profit and Loss Account – Q3 FY21 (Rs Crs) Q3FY21 Q3FY20 Y-o-Y (%) Q2FY21 Q-o-Q (%) Net Interest Income 3,406 3,074 11% ▲ 3,278 4% ▲ Other Income 1,646 1,790 (8%) ▼ 1,554 6% ▲ Total Income 5,052 4,864 4% ▲ 4,832 5% ▲ Operating Expenses 2,088 2,106 (1%) ▼ 1,980 5% ▲ Operating Profit 2,964 2,758 7% ▲
Slide 10: Profit and Loss Account – 9M FY21
Profit and Loss Account – 9M FY21 (Rs Crs) 9M FY21 9M FY20 Y-o-Y (%) Net Interest Income 9,993 8,828 13% ▲ Other Income 4,721 5,180 (9%) ▼ Total Income 14,714 14,008 5% ▲ Operating Expenses 5,971 6,036 (1%) ▼ Operating Profit 8,743 7,972 10% ▲ Provisions & Contingencies 6,077 2,212 175% ▲ Profit bef
Slide 11: Key Financial Indicators
Key Financial Indicators Q3FY21 Q3FY20 Q2FY21 Return on Assets 1.05% 1.82% 0.85% PPOP / Average Assets 3.74% 3.83% 3.66% Return on Equity 8.35% 15.62% 7.12% Cost / Income Ratio 41.34% 43.31% 40.98% Net Interest Margin 4.12% 4.15% 4.16% Net NPA 0.22% 1.05% 0.52% EPS (annualized, Rs. per share) 43.90
Slide 12: Well Diversified Loan Book
Well Diversified Loan Book Loan Book (Rs crs) 206,783 201,247 207,128 198,069 186,394 44% 42% 42% 43% 61% (Rs crs) 56% 58% 58% 57% Consumer Finance Dec-20 39% Vehicle Loans 61,003 29% FY19 FY20 Jun-20 Sep-20 Dec-20 Comm. Vehicle Loans 23,812 11% FY19 are not comparable Consumer Finance Division Corp
Slide 13: Diversified Corporate Loan Book
Diversified Corporate Loan Book Sector % Lease Rental 4.25% Gems and Jewellery 3.55% Real Estate - Commercial and Residential 3.45% Steel 3.11% NBFCs (other than HFCs ) 2.39% Power Generation – Renewable 1.80% Housing Finance Companies 1.11% Services 1.03% Other Industry 22.03% Corporate Banking 42.
Slide 14: Domains have continued outperformance even in the current crisis
Domains have continued outperformance even in the current crisis Vehicle Finance Microfinance Gems & Jewellary Collection Efficiency Collection Efficiency 96.9% 95.5% 94.3% 94.4% Restructured – 0.07% 87.2% SMA2 – 0.00% Collection Efficiency – 99.9% Sep-20 Dec-20 Q2FY21 Q3FY21 Till 22nd Jan 21
Slide 15: Well Rated Corporate Portfolio
Well Rated Corporate Portfolio 24% 22% Investment Grade Sub Investment Grade 20% 18% Percentage of Rated Portfolio 16% Unsecured Non Fund Based % Secured Non Fund Based % 14% Unsecured Fund Based % 12% Secured Fund Based % 10% 8% 6% 4% 2% 0% IB1 (AAA) IB2+ IB2 (AA) IB2- (AA-) IB3+ (A+) IB3 (A) IB3-
Slide 16: Improving Deposit Profile
Improving Deposit Profile Expanding branch network CASA Focus on target market segments 50% 1,00,000 42.4% Growth driven by retail customer acquisitions 40.4% 40.0% 40.3% 40.4% 44% 90,000 38% Scaling up new businesses – Affluent and NRI 91,865 96,646 33% 80,000 91,846 Leverage BFIL for rur
Slide 17: Other Income
Other Income (Rs Crs) Q3FY21 Q3FY20 Y-o-Y (%) Q2FY21 Q-o-Q (%) Core Fee 1,389 1,506 (8%) ▼ 1,061 31% Securities/MM/FX 257 284 (10%) ▼ 493 (48%) ▼ Trading/Others Total 1,646 1,790 (8%) ▼ 1,554 6% 17
Slide 18: Diverse Revenues from Core Fee Income
Diverse Revenues from Core Fee Income (Rs Crs) Q3FY21 Q3FY20 Y-o-Y(%) Q2FY21 Q-o-Q(%) Trade and Remittances 183 185 (1%) 152 20% Foreign Exchange Income 268 241 11% 228 18% Distribution Fees (Insurance, MF, 370 347 7% 323 15% Cards) General Banking Fees* 188 135 39% 124 51% Loan Fees
Slide 19: Digital Business Mix continues to grow
Digital Business Mix continues to grow on the back of seamless digital onboarding journeys powered by “IndiaStack” across products *Includes outward remittance transactions via IndusForex; ^Systematic Investment Plans 19
Slide 20: Digital Transaction Mix continues to grow
Digital Transaction Mix continues to grow with 89% of transactions happening digitally and 70% of service requests processed digitally Overall Digital Transaction mix at 89.0% (Q3) up from 86.4% Digital service requests* (% of total SRs) increased to 70% (Q2) by volume reducing cost to serve 80% 89.
Slide 21: User Base and Transaction Volumes continue to show healthy growth
User Base and Transaction Volumes continue to show healthy growth across channels Basis Q3 average monthly run rate of current yr for Oct-Nov against Oct-Dec FY 20 ; user base as of end of quarter 21
Slide 22: Diversified and Granular Fee Streams – Q3 FY21
Diversified and Granular Fee Streams – Q3 FY21 Corporate Banking Consumer Banking Trading and Other Income (29%) (56%) (15%) Trade and Remittances , 2% Investment Banking - Project Trade and Foreign Finance / Remittances , Exchange, Advisory, 9% 7% 1% Investment Foreign Exchange, Investment Banking
Slide 23: Yield / Cost Movement
Yield / Cost Movement 11.67% 11.97% 9.10% Yield on Assets 8.86% Yield on Advances 5.34% 5.58% Cost of Deposits 4.74% 4.94% Cost of Funds Q3FY21 Q2FY21 •Yield on Assets/Cost of funds are based on Total Assets/Liabilities Segment-wise Yield Q3FY21 Q2FY21 Outstanding Yield Outstanding Yield (Rs crs) (%
Slide 24: Loan Related Provisions held as on December 31, 2020
Loan Related Provisions held as on December 31, 2020 Specific provision of Rs. 2,357 crs (towards PCR for reported GNPA) Provision of Rs. 3,261 crs related to COVID-19 of which: Counter-cyclical Rs.760 crs (towards PCR for reported GNPA) Contingent provisions of Rs. 1,535 crs (towards PCR fo
Slide 25: Credit Cost
Credit Cost (Rs Crs) FY18 FY19 FY20 Q1FY21 Q2FY21 Q3FY21 9MFY21 Corporate Bank 468 2,134 1,893 907 419 238 1,564 Consumer Finance 433 585 1,136 259 201 187 647 Gross Credit Costs 901 2,719 3,029 1,166 620 425 2,211 Gross Credit Costs 62 146 146 59 31 21 107 (Basis Points on Advances) Net Credit Cost
Slide 26: Movement in NPA and Restructured Advances
Loan Portfolio - Movement in NPA and Restructured Advances (Rs Crs) Q3FY21 Q2FY21 Corporate Consumer Total Corporate Consumer Total Opening Balance 2,930 1,602 4,532 3,388 1,711 5,099 Additions 36 23 59 13 386 399 Deductions 735 205 940 471 495 966 Gross NPA 2,231 1,420 3,651(a) 2,930 1,602 4,532(a)
Slide 27: NPA Composition – Consumer Finance
NPA Composition – Consumer Finance (Rs Crs) Com. Const. Small HL/PL/ Q3 FY21 Utility TW Cars Tractor BBG/LAP Cards MFI Total Vehicle Equip. CV Others Gross NPA 378 46 68 58 189 56 43 188 31 10 353 1,420 Gross NPA % 1.58% 0.97% 0.78% 1.60% 3.08% 0.71% 0.70% 0.90% 0.37% 0.18% 1.51% 1.18% Com. Const. S
Slide 28: Strong Balance Sheet & Profitability Buffers in Place
Strong Balance Sheet & Profitability Buffers in Place Capital Adequacy Pre Provision Operating Profit Margin (Rs. in Crores) 31 Dec 20 30 Sep 20 5.8% 5.7% 5.8% 5.5% Credit Risk, CVA and UFCE 2,28,995 2,24,353 4.9% Market Risk 8,105 8,977 2.4% 1.9% 3.6% 4.5% 3.9% Operational Risk 28,353 28,353 Total
Slide 29: Distribution Expansion to Drive Growth
Distribution Expansion to Drive Growth Strengthening Distribution Infrastructure Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Particulars 2019 2020 2020 2020 2020 Branches/Banking 1,851 1,911 1,911 1,910 1,915 Outlets BFIL Branches 2,163 2,071 2,079 2,144 2,249 Vehicle Finance 859 853 854 841 840 Marketi
Slide 30: Shareholding Pattern
Shareholding Pattern Paid up Capital as of December 31, 2020 MFs / Banks/ Promoters#, Insurance Co, 13.44% 14.83% Individuals, 7.55% Private Corporates, 2.74% NRIs/ Director/ Others, 2.73% GDR issue, 8.38% FIIs*, 50.33%, *includes FPIs # 14.92% with diluted capital including warrants/ESOP 30
Slide 31: Planning Cycle 5 Strategy
Planning Cycle 5 Strategy 31 IndusiInd Bank
Slide 32: PC5 Strategy Broad Themes
PC5 Strategy Planning Cycle 5 (2020–23) Strategy Scale with Sustainability Broad Themes Leapfrog Digital Banking Fortifying Liabilities Scaling up Domains of Expertise Investing in New Growth Engines Conservative & Robust Practices 32
Slide 33: PC5 Growth Driven with Conservative Beliefs
PC5 Growth Driven with Conservative Beliefs Credit to Deposit Ratio <95% Lower Non-Funded to Certificates of Funded Ratio Deposits 5%-10% PCR Retail LCR Deposits >65% 45%-50% Unsecured Retail <5% 33
Slide 34: PC5 Strategic Priorities
PC5 Strategic Priorities 1. Retail Liabilities Surge 5. New 2. Fine-tuning Growth Corporate Boosters Bank Underpinned by Approach 6. Digitization & 7. Sustainability 3. Holistic 4. Scaling Rural up Domains Banking 34
Slide 35: Retail Liabilities Surge
Retail Liabilities Surge Continued investment in distribution & leverage maturity of existing network Measures of Success – FY23 Scaling up new businesses such as Affluent, NRI, Gift City Doubling our Client acquisition run-rate Invest in digital sourcing through partnerships and building digi
Slide 36: Sharpening Corporate Bank
Sharpening Corporate Bank Domain Specialization Superior Risk Granularity of Management Assets & Fees Portfolio Liabilities Monitoring Focus 36
Slide 37: Holistic Rural Banking Approach
Holistic Rural Banking Approach Building Rural Stack Leverage extensive reach >100,000 Villages Distribution Unique Bharat Money Stores model – Scale up to 0.4mn Continue client acquisition growth of 15%-20% Micro- finance Meet lifestyle demand of clients through cross-sell Offer Deposit Products Fa
Slide 38: Scaling up Areas of Domain Expertise
Scaling up Areas of Domain Expertise Domains have demonstrated strong risk adjusted returns over long term Microfinance Diamond Financing - Continued - Business to rebound geographic expansion post Covid - Deepen product - Market share gains offerings on weak competition Vehicle Finance Search for
Slide 39: Adding Growth Boosters
Adding Growth Boosters New Growth Boosters Affluent Banking NRI Banking MSME “Pioneer” offering well accepted in the Ramp-up NR branches, international Full Stack of Differentiated Offerings market and will be scaled up presence and digital offerings for clients across the MSME spectrum Scale-up PC-
Slide 40: Digitizing to the Core Across Business Segments
Digitizing to the Core Across Business Segments Inclusive Retail Merchant Corporate / Our Beliefs: SME Banking Individual / Retailer Government Customer Centricity and human centered design Digital Onboarding Improving employee experience Analytics led Persona Specific Client Engagement Drive an “ag
Slide 41: Digitization: Way Forward
Digitization: Way Forward Individuals • Customized propositions for sub- segments • Integrated wealth platform • Innovation as a differentiation Efficiency • Employee engagement & productivity SME • Rationalising Physical Infra Retain Acquire • All in one merchant stack • Digital journeys for lendin
Slide 42: Business Strategy Underpinned by Sustainability
Business Strategy Underpinned by Sustainability SUSTAINABLE FINANCE GOVERNANCE • Lending themes adopted to build positive impact portfolio • Clear Governance Structure at Board & Management Level of ~40% of Bank’s Advances • Adopt best ESG practices for long term value creation • External Assurance
Slide 43: PC5 Expected Outcomes
PC5 Expected Outcomes Planning Cycle 5 (2020–23) Loan Growth 15% - 18%* CASA Ratio > 40% Resulting in Revenue Growth Exceed Balance Sheet Growth PPOP / Loans > 5% Branch Network 2,500 Customer Base Double to >45mn * For FY22-FY23 43
Slide 44: Accolades
Accolades 44 IndusiInd Bank
Slide 45: Accolades
Accolades First Bank to go live on RBI’s Awarded “Outstanding Response to COVID- Awarded Silver Category in “Best “Account Aggregator Framework” 19, Branchless Banking” in Global Retail Mobile Search Campaign” in 11th India (FIP Launch) Banking Innovation Awards 2020 – The Digital Awards – Internet
Slide 46: Accolades
Accolades IndusInd Bank is presented with 2 awards at the Finacle Innovations IndusInd Bank is awarded Awards 2020 for with the Infosys Finacle technology Client Innovations Awards implementations 2020 for Alexa and Chatbot IndusInd Bank received two awards Implementations at the CSR Times Awards 20
Slide 47: Thank You
Thank You \) IndusiInd Bank A7
Slide 48: 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