Axis Bank Limited · NSE:AXISBANK
Axis Bank — Debt Investor Presentation (June 2024)
41 slides from Axis Bank's debt investor presentation, June 2024
Slide 1: Stronger, Consistent and Sustainable Growth: Debt Investor Presentation
Stronger, Consistent and Sustainable Growth Debt Investor Presentation JUNE 2024
Slide 2: India remains the fastest growing large economy
India remains the fastest growing large economy, expect strong momentum to continue 2 Public
Slide 3: India remains the fastest growing large economy, expect strong momentum to continue
India remains the fastest growing large economy, expect strong momentum to continue India GDP growth continues to be strong • Strong upgrades to India GDP growth forecasts, with growth estimates of over 7% augers well for financials 9.7 ^ 8.2 6.5 7.0 • By 2027, India’s Affluent population1 (with ann
Slide 4: High frequency indicators continue to show expansion
High frequency indicators continue to show expansion GST collections (in Rs Trillion) 98 950 11.5% YOY Air traffic 7.3% YOY 5.19 5.06 5.05 96 4.88 900 4.66 94 4.47 18.4% YOY 92 850 90 800 88 86 Passenger (mn) LHS 750 84 Freight (KT) RHS 700 82 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 80 650 Q3FY23
Slide 5: INR among the most stable EM currencies
INR among the most stable EM currencies, with recovering macros and healthy reserves 0 USD bn 700 -0.4 India FX reserves, USD bn -0.7 -0.9 -1.0 -2 -1.6 600 -2.5 500 -4 -4.9 400 -6 -5.4 -6.1 300 -8 -7.1 -7.5 200 Since Jan'24 -10 Since Jan'23 100 -10.0 -12 0 ZAR MYR BRL INR CNY IDR Jun-19 Jun-20 Jun-2
Slide 6: Core CPI inflation performing exceptionally well, food inflation remains a bugbear
Core CPI inflation performing exceptionally well, food inflation remains a bugbear 12% CPI headline and core inflation trends 12% 10% 10% 8% 8% Core 6% 6% CPI - Headline 4% 4% 2% 2% 0% 0% Food -2% -2% Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Source:
Slide 7: India goods imports have grown due to both prices and demand, offset by services exports
India goods imports have grown due to both prices and demand, offset by services exports India imports over the years, USD bn India services imports and exports – record for exports FY24 180 75 90 81 67 49 45 22 60% 35 Receipts RHS Payments RHS USD bn FY23 209 71 77 81 73 59 42 25 Receipts Payments
Slide 8: Yield curve has flattened, watch out for steepening
Yield curve has flattened, watch out for steepening as markets begin to price in cuts (in %) 8.0 7.5 7.0 6.5 6.0 5.5 5.0 Repo rate 4.5 12m T-bill 4.0 10y G-sec 3.5 3.0 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 Jun-24 Source: Bloomberg 8 Public
Slide 9: Transmission of monetary policy remains in progress; credit offtake elevated
Transmission of monetary policy remains in progress; credit offtake elevated (in %) WALR(Fresh Rupee Loans) 11 21% % WATDR outstanding deposits 19.8% Non-food credit growth (%, YoY) Repo Rate 19% 10 Non-food credit growth (%, YoY) ex HDFC merger WATDR fresh deposits 9.55 Deposit growth (%, YoY) 9 17
Slide 10: Liquidity is now neutral, RBI guiding overnight rates at midpoint of corridor
Liquidity is now neutral, RBI guiding overnight rates at the midpoint of corridor India liquidity surplus along with overnight rates Rs. tn 7.00 -10.00 -9.00 6.75 -8.00 -7.00 6.50 -6.00 -5.00 6.25 -4.00 -3.00 6.00 Pent-up government spending with -2.00 seasonal trends -1.00 5.75 0.00 5.50 1.00 2.00
Slide 11: India continues to be an attractive investment opportunity
India continues to be an attractive investment opportunity • FY24 saw rebound in net FPI investments after the weakening seen in FPI flows in FY22 and FY23 in line with global monetary tightening. • India’s equity stock market capitalization is among the top 5 largest globally. MSCI raised India's w
Slide 12: Stronger, Consistent & Sustainable all weather Franchise
Stronger, Consistent & Sustainable all weather Franchise 12
Slide 13: House of GPS strategy further strengthened with distinctiveness and focus themes
House of GPS strategy initiated in 2019 has been further strengthened with distinctiveness and identified focus themes to take charge Identified areas of distinctiveness Sustained, Consistent Financial Outperformance with focus on Customer Obsession Deliver world class customer experience led by pro
Slide 14: Delivered GPS commitments in the last 5 years
Delivered GPS commitments in the last 5 years.... FY19 FY24 Advances mkt share 4.9% 5.9% Incremental market Deposits share of 6.6% and 6.1% mkt share 4.3% 5.0% in advances and Growth (1) (2) deposits for the last 5 Operating 8% 17% years Revenue growth Cons ROA 0.66% 1.84% Return on investment in Co
Slide 15: Consistent and robust improvement in shareholder return metrics
… along with consistent and robust improvement in shareholder return metrics Trend in Consolidated ROA and ROE 2.00% 1.8% 1.8% 1.80% 1.60% 1.3% 1.40% 0.7% 1.20% 1.00% 0.80% Consolidated ROA 0.60% 0.40% 0.2% 0.20% 0.00% 18.8% 19.3% 13.7% 8.2% Consolidated ROE 2.7% FY20 FY21 FY22 FY23 * FY24 * excludi
Slide 16: Consistent execution on our GPS strategy positions us well for the future
Consistent execution on our GPS strategy positions us well for the future A Resilient, all-weather franchise GPS commitments have been delivered… i. Core strengthened, with strong balance sheet position and next generation tech architecture ii. Lifted the growth trajectory across business segments i
Slide 17: Strengthened balance sheet with one of the best asset quality metrics
A Strengthened balance sheet significantly with one of the best asset quality metrics in the industry PCR 79% 75% 69% Net NPA ratio for large banks 52% (as of Mar’24) 0.42% 6.77% 0.31% 0.33% 4.86% 3.40% 2.82% 1.56% 1.43% 0.73% Axis Bank Peer 1 Peer 2 0.31% Mar-18 Mar-20 Mar-22 Mar-24 Gross NPA% Net
Slide 18: Legacy asset quality issues adequately addressed
A Legacy asset quality issues adequately addressed Overall Credit Costs: FY10 to Q4FY24 3.57% 3.53% Credit Cost 2.82% Net Credit Cost 2.78% 1.91% 2.15% 1.87% 1.89% 1.35% Long term (FY03 to FY23) 1.56% 1.68% 1.11% 1.04% 1.19% 0.70% 0.74% 0.74% 0.61% 0.62% 0.61% 1.06% 0.54% 0.72% 0.70% 0.68% 0.50% 0.5
Slide 19: Self-sustaining capital structure, resulting in value accretion for all stakeholders
A Self-sustaining capital structure, resulting in value accretion for all stakeholders Historically equity raise was supporting capital consumption… … profit accretion is adequate to fund organic growth Includes 44 bps 0 towards assets 2.36% 1.92% acquired 6.03% 7.10% 0.72% (1) 5.87% 1.91% 14.02% 13
Slide 20: Delivered significant improvement in the quality of our deposit franchise
A Delivered significant improvement in the quality of our deposit franchise We have grown deposits faster than the industry… … CASA to average assets ratio is the best amongst the peers… 15% 32.0% 11% 30.0% 26.0% Last 5 yrs CAGR CASA to Average Assets Industry Axis Peer 1 Peer 2 Axis Bank Source: RB
Slide 21: Lifted growth momentum across risk adjusted, higher yielding segments
A Lifted growth momentum across our risk adjusted, higher yielding segments 50% Retail Segment SBB, 43% 45% 40% 35% Business Segment wise Credit Cards, 29% 25% 30% Rural loan , 25% CAGR (since FY20) in Focus 25% LAP, 23% business segments Retail , 19% 25% SME, 19% 20% 20% Personal loan , 16% 15% Hom
Slide 22: Sustained execution resulting in consolidation of our position across businesses
A Sustained execution resulting in consolidation of our position across various businesses Credit cards CIF Market Share Burgundy AUM CASA deposits In Mn ` trillion 50% YOY ` trillion 32% CAGR 5.37 14% CAGR 4.6 14.0% 12.7% 2.4 1.33 Mar'19 Mar'24 FY19 FY24 Mar'19 Mar'24 4th largest Credit Card player
Slide 23: Structurally improved NIMs, while maintaining credit RWA
A Structurally improved NIMs, while maintaining credit RWA… (1) Structurally improved NIM trajectory… …led by key business drivers 4.07% 4.02% Retail & SME as % of loan book 71% 3.51% 3.53% 62% 3.43% 24 bps 3.47% Improvement in NIMs NIMs through cycle ** Mar-20 Mar-24 FY19 FY20 FY21 FY22 FY23 FY24 N
Slide 24: Strong growth in granular fees
A … and strong growth in granular fees which is among the best in industry Improved the fee profile significantly in last few years Granular* Fee 1.35% to Avg Assets 1.20% 1.18% 1.17% 1.10% 1.02% FY19 FY20 FY21 FY22 FY23 FY24 ~93% ~600 bps 19% Share of granular Retail & Improvement in proportion of
Slide 25: Consistent execution on our GPS strategy positions us well for the future
Consistent execution on our GPS strategy positions us well for the future A Resilient, all-weather franchise GPS commitments have been delivered… i. Core strengthened, with strong balance sheet position and next generation tech architecture ii. Lifted the growth trajectory across business segments i
Slide 26: Partnerships as a channel have significant potential to augment customer base
B Partnerships as a channel has significant potential to augment our customer base We have 100+ Partnerships across Platforms and Ecosystems Aggregators Mobility E-commerce Telecom Enablers Neo-Banks Remittance Platforms APIs hosted on Bank’s 410+ 285+ 25+ API Developer Portal Total APIs Retail APIs
Slide 27: Multiplicative forces through One Axis, partnerships and new age tech platforms
B Multiplicative forces through unification of One Axis, partnerships and new age tech platforms gives the right to win Digital 2.0. Partnerships One Axis `1,591 Cr Combined PAT for operating Retail domestic subsidiaires Assets 64,550+ Wholesale Retail Bharat Banking Common Service Centre Village Ba
Slide 28: Consistent execution on our GPS strategy positions us well for the future
Consistent execution on our GPS strategy positions us well for the future A Resilient, all-weather franchise GPS commitments have been delivered… i. Core strengthened, with strong balance sheet position and next generation tech architecture ii. Lifted the growth trajectory across business segments i
Slide 29: Leadership in technology with several industry firsts
C Leadership in technology with several industry firsts… 1st 1st 1st Indian Bank to be ISO Indian Bank to roll-out MS Indian Bank to launch certified for its AWS GenAI Co-pilot BBPS for B2B and Azure Cloud security 7000+ 75M 810 WAN Links Upgraded Daily API Hits Best-in-class BitSight (a) rating in
Slide 30: Sparsh, our Customer Obsession program, delivering Smart Banking
C Sparsh, our Customer Obsession program, is committed to delivering Smart Banking by improving institutional capabilities across the Bank Sparsh embedded across all customer touchpoints, Sparsh is committed to deliver Smart Banking: Industry-first LIVE processes & metrics Initiatives Getting more c
Slide 31: Inherent strengths in Bharat Banking give right to win in RuSu markets
C Inherent strengths in Bharat Banking, gives us the right to win in RuSu markets 2,480+ 64,550+ 80+ Large and deep distribution Bharat Banking branches Common Service Centre Village Partners as of Mar 2024 level entrepreneurs Delivered strong growth at 30% 30% 12% current scale YOY growth in Rural
Slide 32: We have a distinctive people proposition
C We have a distinctive people proposition Building an Internal Talent Marketplace 5X the internal mobility 20% of movements saw promotions thrive Significant impact on advocacy and attrition Strengthening the talent pipeline AbLE ABYB ASA ARISE ASPIRE Axcept + more campus and skill factories Increa
Slide 33: ESG focus continues to have Bank-wide sponsorship
C ESG focus continues to have Bank-wide sponsorship Our Purpose Statement: Banking that leads to a more inclusive and equitable economy, thriving community and a healthier planet Steady Performance on Global ESG Benchmarks Above 80th percentile among global banks on DJSI in 2023 Environmental Social
Slide 34: Axis remains well positioned to capitalize on India's growth story
Axis remains well positioned to capitalize on India’s growth story Manufacturing surge GDP share to increase to 25% by 2025 Revival in capex / investment cycle Innovation India emerging as a leader in Investment to GDP ratio has bottomed, and Wholesale & set to rise to 34% by 2030 FinTech innovation
Slide 35: Other important information
Other important information • Debt instruments currently outstanding • Credit Ratings • Financials 35 Public
Slide 36: Axis Bank MTNs currently outstanding
Axis Bank MTNs (Senior Notes + Subordinate) currently outstanding Sr. No Issue Coupon Issue Date Maturity / Call Date Size (US$ Mn) 1 Senior Fixed Rate Note 3.75% 17-Feb-15 17-Feb-25 55 Subordinate Fixed Rate Note 2 4.10% 08-Sept-21 Perpetual* 600 (ESG Bond) 655 *Call option on 8-Sep-2026 Indicative
Slide 37: Credit Ratings (as of May'24)
Credit Ratings (as of May’24) Foreign Currency Ratings Domestic Currency Ratings Rating Agency Long term Issuer rating Outlook Rating Agency Long term Issuer rating Outlook Moody’s Baa3 Stable CRISIL CRISIL AAA Stable Update as of 21-Feb-2024 Update as of 22-Nov-2023 S&P Ratings BBB- Positive ICRA I
Slide 38: Financial Performance (as reported)
Financial Performance (as reported) Financial Performance ($ mn) Q4FY24 Q4FY23 % Growth FY24 FY23 % Growth Interest Income A 3,504 2,874 22% 13,113 10,211 28% Other Income B = C+D+E 811 574 41% 2,691 1,935 39% - Fee Income C 676 548 23% 2,429 1,901 28% - Trading Income D 122 10 - 208 (29) - - Miscel
Slide 39: Balance Sheet
Balance Sheet Balance Sheet As on 31st Mar’24 As on 31st Mar’23 As on 31st Mar’24 As on 31st Mar’23 % Growth CAPITAL AND LIABILITIES In ` Crores In ` Crores in $ Mn in $ Mn Capital 617 615 74 74 0.3% Reserves & Surplus 1,49,618 1,24,378 17,939 14,913 20% ESOP Outstanding 827 424 99 51 95% Deposits 1
Slide 40: 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 41: Thank you
Thank you A's BANK