Axis Bank Limited · NSE:AXISBANK
Axis Bank — Q1 FY2021 Earnings Presentation
55 slides from Axis Bank's earnings presentation, July 2020
Slide 1: Investor Presentation Quarterly Results Q1FY21
Investor Presentation Quarterly Results Q1FY21 NSE: AXISBANK BSE: 532215 LSE (GDR): AXB
Slide 2: Major Highlights of Q1FY21
Major Highlights of Q1FY21 • Deposit book grew by 19% YOY and 5% QOQ on quarterly average balance, Loan book grew by 13% Healthy growth in deposits continue to • On QAB basis, CASA + RTD constituting 81%, grew 20% YOY, RTD grew 27% drive loan growth • On QAB basis, SA grew by 15% YOY & 5% QOQ, Retai
Slide 3: Key Metrics for Q1FY21
Key Metrics for Q1FY21 Snapshot (As on 30th June 2020) Deposits# 19% YOY Domestic Advances 12% YOY Q1FY21 YOY Growth Net Interest Income 1 6,985 20% Profit & Fee Income 1 1,651 (38%) Loss Operating Expenses 3,728 (2%) 53% 1 Operating Profit 5,844 (1%) 81% Net Profit 1 1,112 (19%) Q1FY21 YOY Growth C
Slide 4: The Bank has been proactive to mitigate Covid related impact on its functioning
The Bank has been proactive to mitigate Covid related impact on its functioning; Operations have further ramped up following ease in lockdown restrictions A Central Emergency Response Team (CERT) was activated a month before lockdown. Introduced a flexible 2D-3D working model (employees coming to of
Slide 5: Agenda
Financial Highlights 5 Capital and Liquidity Position 11 Business Segment performance 13 Asset Quality 34 Subsidiaries’ Performance 37 Other important information 46 Quarterly Results Q1FY21 5
Slide 6: Healthy growth in deposits continue to drive loan growth
Healthy growth in deposits continue to drive loan growth Deposits (QAB) ^ Loans All figures in ` Billion Our overall loan book (including TLTRO investments) grew by 17% YOY 5,501 5,714 5,613 5,216 13% YOY 6,290 19% YOY 4,973 6,001 7% 8% 8% 5,470 5,708 7% 5,301 7% 93% 93% 93% 92% 92% Jun-19 Sep-19 De
Slide 7: Progress on building a granular, stable low cost deposit franchise remains on track
Progress on building a granular, stable low cost deposit franchise remains on track SA Balances^ 15% CA Balances 13% All figures in ` Billion 12% 10% 10% 97% 89% 93% 4% 5% 82% 82% 3% 2% 3% 13% YOY 8% YOY 1,692 1,568 1,609 1,475 1,506 901 791 784 697 743 804 745 712 688 650 Jun-19 Sep-19 Dec-19 Mar-2
Slide 8: Operating performance has been steady
Operating performance has been steady All figures in ` Crores Operating Revenue Opex to Average Assets * 10,793 1% YOY 9,998 10,240 9,572 9,712 3,985 3,896 3,787 2,587 3,868 33% YOY 2.17% $ 2.15% 2.13% 2.09% 6,808 6,985 2.08% 5,844 6,102 6,453 20% YOY 2.00% Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 FY16 FY
Slide 9: Net Interest Margin
Net Interest Margin Advances mix by rate type Cost of Funds 8% 6% MCLR Duration Split 8% (Jun-20) 5.69% 5.70% 5.62% 5.44% 5.42% 28% 1M 5.20% 3% 4.93% 3M, 9% 12M, 17% 6M, 21% 50% Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 MCLR linked Fixed Foreign currency- floating Base Rate linked Repo linked
Slide 10: Retail continues to be major contributor to Bank's fee income
Retail continues to be major contributor to Bank’s fee income Overall Fee* Mix (Q1FY21) Retail Fee Mix (Q1FY21) All figures in ` Crores MF & Insurance Cards Distribution 36% 23% Retail Wholesale 57% 43% Other Retail Assets, Liabilities & Forex business 41% 1,861 1,869 1,651 1,704 43% YOY 1,012 1,062
Slide 11: Agenda
Financial Highlights Capital and Liquidity Position Business Segment performance Asset Quality Subsidiaries’ Performance Other important information Quarterly Results Q1FY21 11
Slide 12: Strong capital position with adequate liquidity
Strong capital position with adequate liquidity Bank’s Capital Adequacy Ratio Liquidity Coverage Ratio 17.47% (consolidated) 17.53% 16.57% 140% 15.84% 4.19% 3.97% 4.89% 130% 125% 4.57% 122% 123% 120% 120% 13.34% 13.50% 120% 113% 11.68% 11.27% 112% 110% 100% 90% Mar 18 Mar 19 Mar-20 Jun-20 80% CET 1
Slide 13: Agenda
Financial Highlights Capital and Liquidity Position Business Segment performance Asset Quality Subsidiaries’ Performance Other important information Quarterly Results Q1FY21 13
Slide 14: Business Performance: Retail
Business Performance Retail
Slide 15: Retail book has diversified over the years, is largely secured
Retail book has diversified over the years, is largely secured with significantly high proportion of ETB and Salaried customers 81% of our Retail book is secured 3% 2% 10% 9% 8% 9% 8% 9% 8% 12% 6% 1% 2% 3% 4% 2% 3% 4% 3% 4% 6% 2% 4% 5% 5% 7% 5% Key insights - Consumer portfolio 7% 8% 8% 6% 8% 9% 9%
Slide 16: We are the 4th largest in Credit Cards business in the country
We are the 4th largest in Credit Cards business in the country Featured Cards Credit Cards in Force – Market Share 12.7% Key insights 12.0% 12.1% 12.0% • More than 70% of sourcing is to the Co-branded Cards Pre Approved customers • Extensive use of data analytics to Mar-18 Mar-19 Mar-20 Apr-20 ident
Slide 17: Over 33,500 crores of card spends went through Axis Bank in Q1FY21
Over `33,500* crores of card spends went through Axis Bank in Q1FY21 Credit Cards Debit Cards Spends in quarter (` Cr) 20,556 19,181 Spends in quarter (` Cr) 18,633 18,321 14,021 12,767 12,672 12,056 41% YOY 7,492 57% YOY 8,055 24.5 1% YOY 24.1 24.3 23.0 23.3 7.0 6.8 9% YOY 6.6 6.8 6.2 Q1FY20 Q2FY20
Slide 18: The Bank is a prominent player in India's Wealth Management space
The Bank is a prominent player in India’s Wealth Management space Overall* Burgundy Performance (Apr’14 - Jun’20) AUM^ 26% Customer Base 27% Fee Revenue~ 38% • Overall AUM ` 1,55,571 Crores • Burgundy Private AUM ` 19,018 Crores *Includes Burgundy Priv ate , ^CAGR is f or 4.25 y rs f rom FY 16 to Q1
Slide 19: We have a very well distributed branch network
We have a very well distributed branch network Domestic Branch Network* 4,528 4,528 4,050 3,703 Mar-18 Mar-19 Mar-20 Jun-20 Branch presence across regions and categories (as of 30th Jun’20) 15% 16% 23% • Our network has been completely organic, 30% built over last 26 years 24% 19% • Total no. of dom
Slide 20: Business Performance: Corporate
Business Performance Corporate
Slide 21: Strong relationship led wholesale franchise driving synergies across One Axis Entities
Strong relationship led wholesale franchise driving synergies across One Axis Entities ‘One stop shop’ for Banking needs of Indian Corporates Investment Banking / Capital Markets 1 • Debt Capital Markets (DCM) • Equity Capital Markets (ECM) Axis Capital We have re-oriented Coverage • M&A & Advisory
Slide 22: Better rated originations and focussed on short term loans
…with better rated originations and focussed on short term loans All figures in ` Crores Corporate Loans 82% of the book is rated A- or better 16% YOY 2,04,103 2,05,556 1,83,402 18% YOY 21% 18% 17% 18% 1,74,446 29,015 29,137 27,980 41,855 15% YOY 1,75,087 1,76,419 79% 82% 83% 82% 1,55,421 1,32,591 M
Slide 23: We remain well placed to benefit from a vibrant Corporate Bond market
We remain well placed to benefit from a vibrant Corporate Bond market All figures in ` Crores Placement & Syndication of Debt Issues Movement in Corporate Bonds Amount mobilized / arranged^ Market share and Rank* 33,071 216% YOY 29,296 29,396 1st 1st 24,410 38,061 17% 21,303 16% 16% 12% 12,049 29.1%
Slide 24: Digital leadership and innovations continue to drive transaction banking opportunities
Digital leadership and innovations continue to drive transaction banking opportunities Market Share across Payment channels CMS Throughput (` Trillion) 10.4% 115 102 9.2% 9.5% 87 7.0% 6.0% 47% YOY 5.2% 5.1% 5.4% 16 CA QAB GST Payments RTGS Volume NEFT Volume FY18 FY19 FY20 Q1FY21 Source: RBI, Axis B
Slide 25: Industry-wise Distribution (Top 10)
Industry-wise Distribution (Top 10) All figures in ` Crores Outstanding1 as on 30th Jun ’20 Total Non-fund Rank Advances Investments based Sectors Value (in % terms) 1. Financial Companies 2 41,150 15,213 11,831 68,194 9.79% 2. Engineering & Electronics 9,535 2,019 25,256 36,810 5.28% 3. Infrastruct
Slide 26: Business Performance: Commercial
Business Performance Commercial
Slide 27: 88% of SME book is secured and predominantly working capital financing
88% of SME book is secured and predominantly working capital financing All figures in ` Crores SME book mix (by type) SME book mix (by tenure) 19% 15% 12% 21% 22% 24% 81% 85% 88% 79% 78% 76% Mar-19 Mar-20 Jun-20 Mar-19 Mar-20 Jun-20 Secured Unsecured Short term loan Long term loan Incremental sancti
Slide 28: SME lending book is well diversified across sectors and geography
SME lending book is well diversified across sectors and geography Segment Mix Book by Loan size Well diversified Geographical mix Well diversified Sectoral mix 12% 15% 12% 15% 17% 1% 18% 2% 3% 35% 4% 10% 17% 4% 35% 53% 19% 5% 27% 10% 5% 20% 15% 8% 7% 16% 7% 7% East North South 1 Trade Retail & Whole
Slide 29: Business Performance: Digital
Business Performance Digital
Slide 30: We have strong market position across most Digital Payment products
We have strong market position across most Digital Payment products Axis Bank market position across products Product Debit Credit Point of Sale Mobile UPI4 Forex Cards1 Cards2 Terminals ^ Banking3 Cards5 Market share 7% 12% 10% 10% 19% 22% Ranking 4th 4th 2nd 4th 3rd Source: RBI, Internal Data 1 –
Slide 31: Digital Channels are becoming central to most activities in the Bank
Digital Channels are becoming central to most activities in the Bank 87% of all financial Digital sourcing in Liabilities & transactions^ were digital Investment products Digital sourcing of Assets Branches, 3% • Over 2.12 lakh of Digital Savings Accounts • 65% of Personal loans* sourced through ATM
Slide 32: Mobile Banking transactions continue to grow strongly
Mobile Banking transactions continue to grow strongly 51% of Mobile Banking customers bank only on Mobile App Mobile Banking logins stand at 13 times of Internet Banking logins, 230+ DIY services are available on Axis Mobile and Internet Banking Axis Aha! answered 3.9 million messages in Q1FY21 Amon
Slide 33: UPI has scaled up tremendously to become a key channel
UPI has scaled up tremendously to become a key channel for customer transactions Axis Bank’s UPI Growth 1 109+ mn VPAs created till date 2 Over 2142 mn UPI transactions# story VPA base and Quarterly Transaction Volume (As Payer PSP) UPI transaction value (as Payer PSP) (in ` Crores) 83% YOY 169% YOY
Slide 34: Agenda
Financial Highlights Capital and Liquidity Position Business Segment performance Asset Quality Subsidiaries’ Performance Other important information Quarterly Results Q1FY21 34
Slide 35: BB & Below Corporate Book and Segmental NPA
BB & Below Corporate Book and Segmental NPA All figures in ` Crores Bank’s Net NPA and Fund based BB and Below* portfolio PCR (excluding technical write offs) has improved from 69% to 75% QoQ; Retail SME Corporate net NPA declined 33 bps QoQ 63%^ 54%^ 80%^ 75% 8.56% 69% 62% 62% 6.37% 4.00 % 60% 3.3%
Slide 36: Detailed walk of NPAs over recent quarters
Detailed walk of NPAs over recent quarters All figures in ` Crores Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Gross NPAs - Opening balance A 29,789 29,405 29,071 30,073 30,234 Fresh slippages B 4,798 4,983 6,214 3,920 2,218 Upgradations & Recoveries C 2,177 2,213 2,422 2,489 608 Write offs D 3,005 3,104 2,7
Slide 37: Agenda
Financial Highlights Capital and Liquidity Position Business Segment performance Asset Quality Subsidiaries’ Performance Other important information Quarterly Results Q1FY21 37
Slide 38: Bank's subsidiaries contribution to the overall profitability
Bank’s subsidiaries contribution to the overall profitability All figures in ` Crores Subsidiary Investments Bank’s Investments PAT Growth profit as % of Subsidiary made as % of Q1 FY21 Profit ** stake (% ) made (in % YOY) consolidated Bank’s Networth profit Axis Capital 100% 73.50 0.10% 7.73 (50%)
Slide 39: Axis Finance: Remain cautious on growth, investing for growing the Retail book
Axis Finance : Remain cautious on growth, investing for growing the Retail book All figures in ` Crores Growth in Loan Book Major Highlights (Q1FY21) 30% CAGR** • Remain cautious, but utilizing this opportunity to ramp up the mass retail 3% YOY business, net hiring of 488 people in FY20 8,040 7,959
Slide 40: Axis AMC: Strong performance under current market conditions
Axis AMC : Strong performance under current market conditions All figures in ` Crores Average AUM has shown strong growth 1,34,316 31% YOY 1,17,254 1,02,221 39% CAGR* 84,544 70,902 48,829 33,163 23,483 FY15 FY16 FY17 FY18 FY19 FY20 Q1FY20 Q1FY21 * CAGR f or period FY 15 to Q1FY 21 Trend in PAT Major
Slide 41: Axis Securities: Strong growth in broking revenues in Q1FY21
Axis Securities : Strong growth in broking revenues in Q1FY21 Total customer base (in mn) 9% YOY 27% CAGR* 2.27 2.33 2.10 Major Highlights 1.84 Moved from discount brokerage model last year to being a full 1.39 service broker and is focusing on building an advisory model 1.00 Has one of the high
Slide 42: Axis Capital: Continuing dominance in ECM markets
Axis Capital : Continuing dominance in ECM markets Major Highlights • Axis Capital has been the leader in equity and equity linked deals over the last decade • In FY20, Axis Capital maintained its leadership position with highest number of transactions (17 transactions across IPO, QIP, Right Issues,
Slide 43: A.TReDs: The Invoicemart product continues to be a market leader
A.TReDs: The Invoicemart product continues to be a market leader Axis Bank is one of the three entities allowed by RBI to set up the Trade Receivables Discounting System (TReDS), an electronic platform for facilitating cash flows for MSMEs TReDS is an electronic platform that connects MSME sellers w
Slide 44: Freecharge: Among the top non-bank financial services platforms
Freecharge: Among the top non-bank financial services platforms in the industry with a significant consumer franchise footprint One of the top financial services App in India … With massive potential for cross selling Bank products Registered with FreeCharge 81 MN Ever transacted on FreeCharge 42 MN
Slide 45: Evolving from Digital payments platform to Digital Financial Services platform
Business is now focused on evolving from a leading Digital payments platform to a Digital Financial Services platform by offering new services DIGITAL PAYMENTS DIGITAL FINANCIAL SERVICES MOBILE FC CREDITLINE RECHARGES FC DEBIT EMI DTH, UTILITIES MUTUAL FUND & INVESTMENTS BUS TICKETS DEALS INSURANCE
Slide 46: Agenda
Financial Highlights Capital and Liquidity Position Business Segment performance Asset Quality Subsidiaries’ Performance Other important information Quarterly Results Q1FY21 46
Slide 47: Sustainability at Axis Bank
Sustainability at Axis Bank “Striving to create positive, financial as well as non-financial impact among our diverse stakeholder spectrum across rural and urban India” Green Banking Banking for Emerging India • First certified Green Bond by an Asian Bank, launched in 2016 for • 1.7 million women bo
Slide 48: We have created a differentiated identity and are amongst the most valuable Brands in India
We have created a differentiated identity and are amongst the most valuable Brands in India Featured amongst Top 20 most valuable brands in India Axis Bank Mobile App Store Rating 4.6 2018 Global Rank #14 4.7 vs. #32 in 2017 People’s Choice Among 42 leading banks worldwide Quarterly Results Q1FY21 4
Slide 49: Major awards won by the Bank and its subsidiaries
Major awards won by the Bank and its subsidiaries Best Cyber Security Project, Best Use of IT in Risk Anti-Money Laundering Best Financial AI Project & Management / Fraud Technology Implementation Best Risk Management Project Prevention • Best Contactless Payments Excellence in Operations Financial
Slide 50: Financial Performance
Financial Performance Financial Performance (` crores) Q1FY21 Q1FY20 % Growth Interest Income A 16,539 15,255 8% Other Income B = C+D+E 2,587 3,869 (33%) - Fee Income C 1,652 2,664 (38%) - Trading Income D 622 832 (25%) - Miscellaneous Income E 313 373 (16%) - Recoveries in written-off a/c’s 228 119
Slide 51: Financial Performance ($ mn)
Financial Performance Financial Performance ($ mn) Q1FY21 Q1FY20 % Growth Interest Income A 2190 2,020 8% Other Income B = C+D+E 343 512 (33%) - Fee Income C 219 353 (38%) - Trading Income D 82 110 (25%) - Miscellaneous Income E 42 49 (16%) - Recoveries in written-off a/c’s 30 16 92% Total Income F
Slide 52: Balance Sheet
Balance Sheet Balance Sheet (` crores) As on 30th Jun’20 As on 30th Jun’19 As on 30th Jun’20 As on 30th Jun’19 % Growth CAPITAL AND LIABILITIES In ` Crores In ` Crores in $ Mn in $ Mn Capital 564 524 75 69 8% Reserves & Surplus 85,507 70,704 11,325 9,364 21% Deposits 6,28,150 5,40,678 83,193 71,608
Slide 53: Comparative performance with and without effect of changes in policy and NII reserves
Comparative performance with and without effect of changes in policy and NII reserves All figures in ` Crores QoQ Impact of Q1FY21 YoY YoY QoQ Financial Performance Growth (%) Q1FY20 Q4FY20 Q1FY21 policy change excluding Growth (%) (excl. Growth (%) Growth (%) (` crores) (excl. policy (all adverse)
Slide 54: Safe Harbor
Safe Harbor Except for the historical information contained herein, statements in this release which contain words or phrases such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “futu
Slide 55: Thank You
Thank You Quarterly Results Q1FY21 55