Idfc First Bank Ltd. · NSE:IDFCFIRSTB
Idfc First Bank — Q3 FY20 Earnings Presentation
77 slides from Idfc First Bank's earnings presentation, Jan 29, 2020
Slide 1: Cover letter to stock exchanges: Investor Presentation Q3 FY20
� IDFCFIRST EJBank IDFCFIRSTBANK/SD/301/2019-20 January 29, 2020 The Manager-Listing Department The Manager-Listing Department National Stock Exchange of India Limited BSE Limited Exchange Plaza, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Bandra (East) Dalal Street, Fort, Mumbai - 400 051. Mum
Slide 2: Corporate Presentation – Q3 FY20
Corporate Presentation – Q3 FY20
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by and is the sole responsibility of IDFC FIRST Bank (together with its subsidiaries, referred to as the “Company”). By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute or form
Slide 4: Q3 FY20 Results Update: Rapid Strides across all Strategic Priorities
Q3 FY 20 Results Update: IDFC FIRST Bank: Rapid Strides across all the Strategic Priorities On merger between Capital First and IDFC Bank, the newly created Bank, IDFC First Bank, had put forward key Strategic Priorities. We are happy to report that we are staying steadfast on the course laid out as
Slide 5: Q3 FY20 Results Update: Rapid Strides across all Strategic Priorities
Q3 FY 20 Results Update: IDFC FIRST Bank: Rapid Strides across all the Strategic Priorities 3. Asset Quality remains high a. Bank GNPA at 2.83% ( 2.62% as of 30/09/19), Net NPA at 1.23% ( 1.17% as of 30/09/2019) b. Improved Retail Asset Quality: GNPA at 2.26% ( 2.31% as of 30/09/19), Net NPA at 1.06
Slide 6: Table of Contents
5 SECTION 1: THE FOUNDING OF IDFC FIRST BANK 11 SECTION 2: VISION & MISSION OF IDFC FIRST BANK 13 SECTION 3: MARKET OPPORTUNITY Table 21 SECTION 4: PRODUCT OFFERING of Contents 24 SECTION 5: FINANCIAL PERFORMANCES 47 SECTION 6: DIRECTORS & SHAREHOLDERS 52 SECTION 7: STRATEGY GOING FORWARD FOR THE CO
Slide 7: Section 1: The Founding of IDFC FIRST Bank
SECTION 1: The Founding of IDFC FIRST Bank • Events Leading to Merger – ✓ Erstwhile IDFC Bank - Origin & History ✓ Erstwhile Capital First - Origin & History ✓ Merger between Erstwhile IDFC Bank and Erstwhile Capital First ✓ Erstwhile IDFC Bank Financials Trends leading to merger ✓ Erstwhile Capital
Slide 8: IDFC FIRST Bank was founded by the merger of IDFC Bank and Capital First
Section 1: The Founding of IDFC FIRST Bank.. IDFC FIRST Bank was founded by the merger of Erstwhile IDFC Bank and Erstwhile Capital First on December 18, 2018. 7
Slide 9: The Founding of IDFC FIRST Bank: Erstwhile IDFC Bank and Capital First
Section 1: The Founding of IDFC FIRST Bank.. Erstwhile IDFC BANK Erstwhile CAPITAL FIRST LIMITED IDFC Limited was set up in 1997 to finance infrastructure focusing Mr Vaidyanathan who had built ICICI Bank’s Retail Banking business primarily on project finance and mobilization of capital for private
Slide 10: The Founding of IDFC FIRST Bank (continued)
Section 1: The Founding of IDFC FIRST Bank.. Erstwhile IDFC BANK Erstwhile CAPITAL FIRST LIMITED Continued from page 6 Continued from page 6 The bank was launched through this demerger from IDFC Limited in .. Between March 31, 2010 to March 31, 2018, the Company’s Retail November 2015. During the su
Slide 11: Merger announcement and founding of IDFC FIRST Bank
Section 1: The Founding of IDFC FIRST Bank.. In January 2018, Erstwhile IDFC Bank and Erstwhile Capital First announced a merger. Shareholders of Erstwhile Capital First were to be issued 13.9 shares of the merged entity for every 1 share of Erstwhile Capital First. Thus, IDFC FIRST Bank was founded
Slide 12: Table of Contents
5 SECTION 1: THE FOUNDING OF IDFC FIRST BANK 11 SECTION 2: VISION & MISSION OF IDFC FIRST BANK 13 SECTION 3: MARKET OPPORTUNITY 21 SECTION 4: PRODUCT OFFERING 24 SECTION 5: FINANCIAL PERFORMANCES 47 SECTION 6: DIRECTORS & SHAREHOLDERS 52 SECTION 7: STRATEGY GOING FORWARD FOR THE COMBINED ENTITY 57 S
Slide 13: Key Excerpts about Vision, Mission and Strategy from MD and CEO's letter
Section 2: Key Excerpts about Vision, Mission and Strategy from MD and CEO’s letter to Shareholders in Annual Report 2019 On Our founding philosophy: On the Vision of the New Bank: “ ” On Our Mission: “ ” On Strategy for the new Bank: On the Future Outlook: “ “ “ ” On Contribution to the Country: “
Slide 14: Table of Contents
5 SECTION 1: THE FOUNDING OF IDFC FIRST BANK 11 SECTION 2: VISION & MISSION OF IDFC FIRST BANK 13 SECTION 3: MARKET OPPORTUNITY 21 SECTION 4: PRODUCT OFFERING 24 SECTION 5: FINANCIAL PERFORMANCES 47 SECTION 6: DIRECTORS & SHAREHOLDERS 52 SECTION 7: STRATEGY GOING FORWARD FOR THE COMBINED ENTITY 57 S
Slide 15: Addressable credit market is growing at ~15% in India
Section 3: IDFC FIRST Bank’s addressable credit market is growing at ~ 15% in India • The total credit market in India including lending by the Bank Credit in India (in Rs. Lac Crore) banks as well as non-banks was at Rs. 117 lac crore as of March 2019. 98.18 79.27 86.83 • Of this, around Rs. 64 Lac
Slide 16: Bank Deposits continue to grow at more than 9% in India
Section 3: Bank Deposits continue to grow at more than 9% in India Bank Deposits in India (in Rs. Lac Crore) • 42% of the total deposits are CASA deposits which have 125.59 grown by 9.6% in FY19 to Rs. 53 Lac crore. 29% of the 114.79 CASA deposits are held by private banks in India. 107.45 96.60 80.
Slide 17: Recently the Indian Economy has faced a few challenges
Section 3: Recently the Indian Economy has faced a few challenges The Food inflation has recently increased GDP growth in recent quarters has shown downward trend Real GDP growth YoY% 9.0 8.1 12.0 CPI inflation YoY 7.7 8.0 8.0 6.8 7.0 Forecasts 10.0 Core CPI Food inflation 7.0 6.6 6.0 5.8 6.0 5.3 5.
Slide 18: Green shoots of recovery in the economy
Section 3: There are some green shoots of recovery as well, will have to wait to see the trend going forward 56 PMI manufacturing IIP (YoY%)~rhs 10% 40.0 Domestic passenger vehicle sales (% 3mma) 2-wheelers (% 3mma) 55 8% 30.0 54 6% 20.0 53 4% 52 10.0 2% 51 - 0% 50 -2% -10.0 49 48 -4% -20.0 47 -6% -
Slide 19: Credit growth sluggish but slowly recovering; retail strong
Section 3: Although overall credit growth has been sluggish it is slowly recovering. Retail Credit growth has been strong and stable. Industry Services Retail Total bank credit 28.0 23.0 18.0 13.0 8.0 3.0 -2.0 -7.0 Credit growth YoY% Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Nov-14 Nov-15 Nov-16 Nov
Slide 20: NPAs in the Banks high but broadly stable during the last year
Section 3: The NPAs in the Banks have been high but broadly stable during the last year 16 14.8 GNPA (%) 14 12.6 12.7 Sep-18 Mar-19 Sep-19 12 10.8 10 9.3 9.3 8 6 3.6 3.8 3.7 3.9 4 3 2.9 2 0 Public Sector Foreign Banks Private Sector Schedule Banks Banks Commercial Banks Sources: RBI, IDFC FIRST Bank
Slide 21: Table of Contents
5 SECTION 1: THE FOUNDING OF IDFC FIRST BANK 11 SECTION 2: VISION & MISSION OF IDFC FIRST BANK 13 SECTION 3: MARKET OPPORTUNITY 21 SECTION 4: PRODUCT OFFERING 24 SECTION 5: FINANCIAL PERFORMANCES 47 SECTION 6: DIRECTORS & SHAREHOLDERS 52 SECTION 7: STRATEGY GOING FORWARD FOR THE COMBINED ENTITY 57 S
Slide 22: Product Offering (Assets): a bouquet of loan products
Section 4: Product Offering (Assets) – IDFC FIRST Bank offers a bouquet of loan products.. .. across varied customer segments including MSMEs and Consumers in different parts of India Loan Against Property: Business Loans: Consumer Durable Loans: Two Wheeler Loans: Home Loans: Unsecured Loans to the
Slide 23: Product Offerings – Liabilities, Payments and other Services
Section 4: Product Offerings – Liabilities, Payments and other Services IDFC FIRST Bank provides wide range of Deposit facilities along with Wealth Management, Forex Services, Cash Management Services and Insurance services to its customers across different segments. Wealth Management Services, Paym
Slide 24: Table of Contents
5 SECTION 1: THE FOUNDING OF IDFC FIRST BANK 11 SECTION 2: VISION & MISSION OF IDFC FIRST BANK 13 SECTION 3: MARKET OPPORTUNITY 21 SECTION 4: PRODUCT OFFERING 24 SECTION 5: FINANCIAL PERFORMANCES 47 SECTION 6: DIRECTORS & SHAREHOLDERS 52 SECTION 7: STRATEGY GOING FORWARD FOR THE COMBINED ENTITY 57 S
Slide 25: Section 5: Financial Performance of the Bank
SECTION 5: FINANCIAL PERFORMANCE OF THE BANK FOR Q2-FY20 • Assets Update • Update on Liabilities • Key Business & Financial Parameters ✓ Snapshot for the quarter ✓ Income Statement ✓ Balance Sheet
Slide 26: Retail loans improved to 49% of total loans as of 31 December 2019
Section 5: Retail loans as a % of total loans has quickly improved to 49% as of 31 December 2019 Retail Funded Assets (includes Home Loan, MSME and Consumer Loans and Rural) Wholesale Funded Assets (includes Corporate and Infrastructure Loans) Rs. 1,06,140 Cr Rs. 1,07,656 Cr Total Funded Assets Rs.
Slide 27: Trend of Retail Loan book for both institutions over 10 years
Section 5: Trend of Retail Loan book for both institutions over the last 10 years. This slide seeks to represent the trend of retail business of both entities. All amounts are in Rs. crore unless specified Though the new merged entity started in Dec 2018, the retail loan book of this entity has prio
Slide 28: Trend of Wholesale Loan Book since the Bank's inception
Section 5: Trend of Wholesale Loan Book for both institutions since the Bank’s inception All amounts are in Rs. crore unless specified 57,137 56,809 55,532 55,626 53,760 53,649 52,675 46,377 42,951 Mar-16 Mar-17 Mar-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Erstwhile CFL Erstwhile IDFC Bank IDFC
Slide 29: Loan Assets Breakup
Section 5: Loan Assets Breakup Pre - Merger Post - Merger In Rs. Crore Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Loan Against Property 622 776 997 8,046 9,123 9,945 10,654 10,841 MSME Loans 1,342 1,597 2,069 5,891 7,122 7,925 8,491 9,498 Housing Loans 1,617 1,923 2,246 4,509 5,145 5,67
Slide 30: Sharp improvement in NIM from 1.56% pre-merger to 3.86%
Section 5: Sharp improvement in NIM from 1.56% pre-merger to 3.86% in a year. • Our NIM which was 1.56% pre merger grew to 2.89% at merger which moved to 3.86% in the Q3 FY20. • NIMs are increasing every quarter usually by 15-20 bps due to gradual shift towards retail banking businesses. • As per ou
Slide 31: Maintaining Strong Asset Quality
Section 5: Maintaining Strong Asset Quality overall, Retail Asset quality remains high In Rs. Crore Mar-19 Jun-19 Sep-19 Dec-19 GNPL 2,136 2,419 2,306 2,511 Provisions for GNPL 1,029 1,203 1,294 1,440 NNPL 1,107 1,216 1,012 1,071 GNPA (%) 2.43% 2.66% 2.62% 2.83% NNPA (%) 1.27% 1.35% 1.17% 1.23% • Si
Slide 32: Retail Loan portfolio trends over last 8 years (Capital First)
Section 5: Trendline: Retail Loan portfolio trends over the last 8 years (Capital First) which has been transported into the bank and is being scaled up, hence displayed below. Since most of the loan book in the merged entity has been built and seasoned in Capital First prior the merger and the same
Slide 33: Gross and Net NPA of Retail Loans broadly steady
Section 5: Gross and Net NPA pertaining to Retail Loans have broadly remained steady over the last four quarters on the banking platform. Gross NPA Net NPA 2.32% 2.31% 2.26% 2.18% 1.24% 1.14% 1.08% 1.06% Mar-19 Jun-19 Sep-19 Dec-19 32
Slide 34: List of Stressed Accounts under watch (Corporate Book)
Section 5: List of Stressed Accounts under watch (Corporate Book) O/S Exposure Client Description Comments (Rs crore) Repayments are regular thus far but certain developments at the company give us reason to believe that repayments may Toll Road (BOT) project in MH 239 get delayed in future. Chance
Slide 35: Exposure to stressed assets reduced; provision coverage improved
Section 5: Exposure to identified Stressed Assets (under watch), mentioned in previous slide, has reduced during last 4 quarters. At same time, provision coverage improved from 23% to 51% All amounts are in Rs. crore unless specified O/s Exposure Provision Provision coverage 47% 47% 51% 22% 4,106 3,
Slide 36: Capital Adequacy Ratio strong with CET 1 ratio at 13.28%
Section 5: Capital Adequacy Ratio is strong with CET 1 ratio at 13.28%. In Rs. Crore Mar-19 Jun-19 Sep-19 Dec-19 Common Equity 17,373 16,340 16,416 14,638 Tier 2 Capital Funds 219 156 158 6 Total Capital Funds 17,592 16,496 16,574 14,644 Total RWA 1,13,744 1,17,733 1,13,104 1,10,228 CET 1 Ratio (%)
Slide 37: Section 5: Financial Performance of the Bank
SECTION 5: FINANCIAL PERFORMANCE OF THE BANK FOR Q2-FY20 • Assets Update • Update on Liabilities • Key Business & Financial Parameters ✓ Snapshot for the quarter ✓ Income Statement ✓ Balance Sheet
Slide 38: Quarterly Trends of CASA
Section 5: Quarterly Trends of CASA over the last 4 quarters All amounts are in Rs. Crore unless specified 16,204 * 12,473 9,594 7,893 5,274 31 Dec 18 31 Mar 19 30 Jun 19 30 Sep 19 31 Dec 19 *This is excluding CASA deposits of Rs. 1,346 crore from one government banking account which is non-sustaina
Slide 39: CASA Ratio improved by more than 15% in 12 months
Section 5: CASA Ratio has improved by more than 15% in 12 months CASA Ratio is computed in terms of CASA as a percentage of Total deposits (CASA+ Certificate of Deposits+ Term Deposits). Consistent growth in CASA and decreasing dependency on Certificate of Deposits and Wholesale Term Deposit has hel
Slide 40: Quarterly Trends of Core Retail Deposits
Section 5: Quarterly Trends of Core Retail Deposits All amounts are in Rs. crore unless specified Core Retail Deposits constitutes of Retail CASA and Retail Term Deposits. Because of its sticky nature it is sustainable and it will be our major driving force for the liability growth in coming years f
Slide 41: Core Retail Deposits now 43.45% of Total Deposits
Section 5: Core Retail Deposits now contribute 43.45% of all Total Deposits showing decreasing dependence on Wholesale Fixed Deposits & Certificate of Deposits The Core Retail Deposits i.e. the Retail CASA and Retail Term Deposits as a percentage of total Deposits have grown sharply from 17.11% as o
Slide 42: Core Retail Deposits as a percentage of Deposits and Borrowings
Section 5: Core Retail Deposits as a percentage of Total Deposits and Borrowings has also improved significantly in the last year post merger Our key strategy is to increase stability of our borrowings. In this reference, the Retail CASA and Retail Term Deposits are considered as stable source of fu
Slide 43: Strong growth in CASA and Retail Term Deposits
Section 5: The Bank continues to see strong growth in CASA and Retail Term Deposits In Rs. Crore Dec-18 Sep-19 Dec-19 YOY % Legacy Long Term Bonds 16,385 13,452 12,705 Infra Bonds 10,434 10,434 10,434 Refinance 3,446 14,197 13,478 Other Borrowings 27,388 18,996 15,196 Total Borrowings (A) 57,652 57,
Slide 44: Section 5: Financial Performance of the Bank
SECTION 5: FINANCIAL PERFORMANCE OF THE BANK FOR Q2-FY20 • Assets Update • Update on Liabilities • Key Business & Financial Parameters ✓ Snapshot for the quarter ✓ Income Statement ✓ Balance Sheet
Slide 45: Income Statement
Section 5: Income Statement Growth (%) In Rs. Crore Dec-18 Sep-19 Dec-19 Q-o-Q Interest Income 3,664 4,018 4,100 Interest Expense 2,519 2,655 2,566 Net Interest Income 1,145 1,363 1,534 13% Fee & Other Income 257 335 413 Trading Gain 3 14 166 Operating Income 1,406 1,712 2,113 23% Operating Expense
Slide 46: Balance Sheet
Section 5: Balance Sheet In Rs. Crore Dec-18 Sep-19 Dec-19 Shareholders' Funds 18,376 16,866 15,240 Deposits 61,914 69,321 68,697 Borrowings 68,614 68,665 67,025 Other liabilities and provisions 8,012 8,925 9,100 Total Liabilities 156,916 163,777 160,062 Cash and Bank Balances 1,636 2,901 3,097 Net
Slide 47: Table of Contents
5 SECTION 1: THE FOUNDING OF IDFC FIRST BANK 11 SECTION 2: VISION & MISSION OF IDFC FIRST BANK 13 SECTION 3: MARKET OPPORTUNITY 21 SECTION 4: PRODUCT OFFERING 24 SECTION 5: FINANCIAL PERFORMANCES 47 SECTION 6: DIRECTORS & SHAREHOLDERS 52 SECTION 7: STRATEGY GOING FORWARD FOR THE COMBINED ENTITY 57 S
Slide 48: Board of Directors
Section 6: Board of Directors Mr. V. Vaidyanathan is the first Managing Director and CEO of IDFC FIRST Bank, a bank founded by the merger of Erstwhile Capital First and Erstwhile IDFC Bank in December 2018. He is a banker turned entrepreneur turned banker by merging the NBFC he founded with an exist
Slide 49: Board of Directors
Section 6: Board of Directors DR. RAJIV B. LALL - PART-TIME NON-EXECUTIVE CHAIRMAN Dr. Rajiv Lall is the Non-Executive Chairman of IDFC Bank. He was the Founder MD & CEO of IDFC Bank from October 1, 2015 till December 18, 2018. Previously, he was the Executive Chairman of IDFC Limited. A veteran eco
Slide 50: Board of Directors
Section 6: Board of Directors DR.(MRS.) BRINDA JAGIRDAR - INDEPENDENT DIRECTOR Dr. (Mrs.) Brinda Jagirdar, is an independent consulting economist with specialization in areas relating to the Indian economy and financial intermediation. She is on the Governing Council of Treasury Elite, a knowledge s
Slide 51: Shareholding Pattern as of 31st December 2019
Section 6: Shareholding Pattern as of 31st December 2019 Scrip Name : IDFC FIRST Bank (BSE: 5394437, NSE:IDFCFIRSTB) Key Shareholders % Holding (through their respective various funds and affiliate companies wherever applicable) Other Body Trusts and IDFC Financial Holding Company Limited 40.00 Pres
Slide 52: Table of Contents
5 SECTION 1: THE FOUNDING OF IDFC FIRST BANK 11 SECTION 2: VISION & MISSION OF IDFC FIRST BANK 13 SECTION 3: MARKET OPPORTUNITY 21 SECTION 4: PRODUCT OFFERING 24 SECTION 5: FINANCIAL PERFORMANCES 47 SECTION 6: DIRECTORS & SHAREHOLDERS 52 SECTION 7: STRATEGY GOING FORWARD FOR THE COMBINED ENTITY 57 S
Slide 53: Section 7: Strategy Going Forward for the Combined Entity
SECTION 7: STRATEGY GOING FORWARD FOR THE COMBINED ENTITY • Key Strategies for the combine entity – ✓ Asset Strategy • Growth of Assets • Diversification of Assets • Gross Yield expansion ✓ Liability Strategy • CASA Growth • Diversification of Liability • Branch Expansion ✓ Profitability • Expand Ne
Slide 54: Asset Strategy as guided at the time of merger
Section 7: Asset Strategy for IDFC FIRST Bank as guided at the time of merger in December 2018. • Growth of Assets: • The Bank plans to grow retail loan assets from Rs. 36,236 crore (December 31, 2018) to over Rs. 100,000 crore in the next 5 years • The Bank plans to wind down loans to infrastructur
Slide 55: Liability Strategy as guided at the time of merger
Section 7: Liability Strategy for IDFC FIRST Bank as guided at the time of merger in December 2018. • CASA Growth: This is a key focus and growth area for the bank. We plan to increase the CASA Ratio from 8.68% as of December 31, 2018 on a continuous basis year on year and strive to reach 30% CASA r
Slide 56: Profitability
Section 7: Profitability • Net Interest Margin: The bank plans to expand the NIM to about 5.0% - 5.5% in the next 5 years based on better cost of funds and carefully selecting the product segments where we have strong proven capabilities over the years. • Asset Quality: Over 90% of the Retail Loan B
Slide 57: Table of Contents
5 SECTION 1: THE FOUNDING OF IDFC FIRST BANK 11 SECTION 2: VISION & MISSION OF IDFC FIRST BANK 13 SECTION 3: MARKET OPPORTUNITY 21 SECTION 4: PRODUCT OFFERING 24 SECTION 5: FINANCIAL PERFORMANCES 47 SECTION 6: DIRECTORS & SHAREHOLDERS 52 SECTION 7: STRATEGY GOING FORWARD FOR THE COMBINED ENTITY 57 S
Slide 58: Section 8: Capital First Strategy, Loan Growth and Profitability Trends
SECTION 8: CAPITAL FIRST STRATEGY, LOAN GROWTH AND PROFITABILITY TRENDS FOR 8 YEARS (BEFORE MERGER WITH IDFC BANK) • History of Capital First Limited • Transformation into Retail Franchise • Business Areas of Focus • Past Financial Performances
Slide 59: Successful Trajectory of Growth and Profits at Capital First
Section 8: Successful Trajectory of Growth and Profits at Capital First Since the business model of Capital First is an important part of the business to be built in the merged bank, we present to you the business model, business lines, business and profitability trajectory, and financial trends of
Slide 60: History of Capital First Limited
Section 8: Successful Trajectory of Growth and Profits at Capital First History of Capital First Limited The Company was first listed on Stock Exchanges in January 2008. Between 2010 to 2012, Mr Vaidyanathan acquired a stake in the company and executed a Management Buyout (MBO) of the Company with e
Slide 61: History of Capital First Limited: Transformation 2010-2018
Section 8: Successful Trajectory of Growth and Profits at Capital First History of Capital First Limited From 31-March-2010 to 31-Mar-2018, the company has transformed across all key parameters including: • The total Capital has grown from Rs. 691 crore to Rs. 3,993 crore 8-Yr CAGR% %Growth – FY18 •
Slide 62: Transformation into Retail Franchise
Section 8: Successful Trajectory of Growth and Profits at Capital First Transformation into Retail Franchise * As per Ind - AS Since 2010, the company has consistently stayed with the founding theme of financing entrepreneurs, Rs. 32,622 Cr* MSMEs and consumers through the platform of technology & h
Slide 63: Transformation into Retail Franchise: Retail Loan Book growth
Section 8: Successful Trajectory of Growth and Profits at Capital First Transformation into Retail Franchise The company’s product launches had been highly successful in the marketplace and the company had emerged as a significant player in Indian retail financial services within eight years of ince
Slide 64: Business Area of Focus: Lines of Business
Section 8: Successful Trajectory of Growth and Profits at Capital First Business Area of Focus LINES OF BUSINESS: Capital First provided financing to select segments that are traditionally underserved by the existing financing system • By staying focused on a specific niche (small entrepreneurs and
Slide 65: Speciality: MSME Financing
Section 8: Successful Trajectory of Growth and Profits at Capital First Business Area of Focus SPECIALITY: MSME Financing – A key area of focus for Capital First Capital First has emerged as a Specialized Player in financing MSMEs by offering different products for their various financing needs Typi
Slide 66: Credit Framework: Strong Risk Management Procedures
Section 8: Successful Trajectory of Growth and Profits at Capital First Credit Framework STRONG RISK MANAGEMENT PROCEDURES: Capital First is structured with inherent checks and balances for effective risk management Credit Policy Credit Portfolio Business Loan Booking & (For defining Underwriting Mo
Slide 67: Credit Framework: Rigorous Credit Underwriting Process
Section 8: Successful Trajectory of Growth and Profits at Capital First Credit Framework Rigorous Credit Underwriting Process helped in maintaining high asset quality 2-3 ✘ In the Mortgages business at Capital First, about 38% of 38-40 ✘ the total applications were disbursed after passing through se
Slide 68: Asset Quality: Stable over 8 years
Section 8: Successful Trajectory of Growth and Profits at Capital First Asset Quality STABLE ASSET QUALITY: The Company’s asset quality consistently remained high consistently over 8 years. Over 8 years, the GNPA was ~1.7% and NNPA was ~1.0% which came down from 5.28% and 3.78% respectively (31-Marc
Slide 69: Asset Under Management 8-year CAGR of 52%
Section 8: Successful Trajectory of Growth and Profits at Capital First Financial Performance: The Asset Under Management has consistently grown at a 8 year CAGR of 52%, FY18 – 37% FY18: YoY Growth 32,622 Asset Under Management (In Rs. Crore) 37% 26,997 19,824 16,041 11,975 9,679 7,510 6,186 2,751 9
Slide 70: Return on Equity increased over the years
Section 8: Successful Trajectory of Growth and Profits at Capital First Financial Performance: the ROE of the Company increased over the years as a result of transformation Yearly Return on Equity (%) Note: RoE for Q4-FY18 (quarterly annualized) was ~ 15% and trending consistently upwards. 14.51% 13
Slide 71: Yearly Trend of Profit After Tax
Section 8: Successful Trajectory of Growth and Profits at Capital First Financial Performance: Yearly Trend of Profit After Tax In FY 08 and 09, the Company had made losses. Even after the new leadership took over, for two years the company continued to post losses as the building blocks for new age
Slide 72: Yearly Earning per Share (EPS) Trend
Section 8: Section 8: Successful Trajectory of Growth and Profits at Capital First Financial Performance: Yearly Earning per Share (EPS) Trend Earning per Share (EPS) has consistently grown at CAGR of 46% in the last 5 years, this created value for all shareholders. Earning Per Share (Rs.) 33.04 24.
Slide 73: Trend of Cost to Income Ratio
Section 8: Section 8: Successful Trajectory of Growth and Profits at Capital First Financial Performance: Trend of Cost of Income Ratio (yearly) The Cost to Income ratio, which was high at ~130% in the early stages of the company, reduced to <50% once the business model stabilized over the years. Co
Slide 74: Market Cap has grown 800% since inception
Section 8: Successful Trajectory of Growth and Profits at Capital First The Market Cap of the Company has grown 800% since inception and 1,000% since the Management Buyout in 2012 Market Capitalization (Rs. 8,282# crore) 7,628 During this phase, the Company - • built the Retail Platform, technologie
Slide 75: Trend of Dividend Payouts
Section 8: Successful Trajectory of Growth and Profits at Capital First Financial Performance: Trend of Dividend Payouts The Company has been steadily increasing dividend pay-out every year starting from 10% in FY10 to 28% in FY18. Dividend (as % of face value per share) 28% 26% 24% 22% 20% 18% 15%
Slide 76: Summary – Strategy for IDFC FIRST Bank
Section 8: Summary – Strategy for IDFC FIRST Bank In summary, under our stated strategy for the combined entity, IDFC FIRST Bank, the same successful model of Capital First lending business is now being built on a Bank platform from IDFC Bank, thus the business becomes more profitable, robust and su
Slide 77: Thank You
THANK YOU IDFC FIRST Bank