Idfc First Bank Ltd. · NSE:IDFCFIRSTB
Idfc First Bank — Shareholder Meeting (August 2023)
62 slides from Idfc First Bank's shareholder meeting presentation, Aug 31, 2023
Slide 1: Stock exchange covering letter for AGM presentation
IDFCFIRSTBANK/SD/123/2023-24 August 31, 2023 National Stock Exchange of India Limited BSE Limited Exchange Plaza, Plot No. C - 1, G - Block Phiroze Jeejeebhoy Towers Bandra-Kurla Complex, Bandra (East) Dalal Street, Fort Mumbai 400 051 Mumbai 400 001 NSE - Symbol: IDFCFIRSTB BSE - Scrip Code: 539437
Slide 2: Annual General Meeting – FY23
Annual General Meeting – FY23 31st August 2023
Slide 3: IDFC FIRST Bank AGM
IDFC FIRST Bank AGM Presentation at IDFC FIRST Bank AGM held on 31st August 2023 V. Vaidyanathan Managing Director & CEO
Slide 4: Sections: Deposits, Loan Assets, Profitability, Culture
Section 1: Deposits Section 2: Loans Assets Section 3: Profitability Section 4: Culture
Slide 5: Section 1: Deposits
Section 1: Deposits
Slide 6: Deposits: Market Opportunity
Deposits: Market Opportunity • Total Bank Deposit market in India as of 30th June 2023 is Rs. 196 lac crore which is growing at 10-13% YOY • IDFC FIRST Bank is 0.8% of the overall bank deposits and has significant room for growth going forward Total Deposits (June 2023) In Rs. Crore Banking Industry
Slide 7: IDFC FIRST Bank – Strengths
IDFC FIRST Bank – Strengths • IDFC first bank is an ‘Institution' like HDFC Bank & ICICI Bank • High focus on customer service • Customer friendly and attractive product propositions • Strong Digital capabilities • Ethical Banking • High level of corporate governance 6
Slide 8: Deposits: Strong growth in Total Customer Deposits
Deposits: Strong growth in Total Customer Deposits in Rs. crore 1,48,474 YoY – Jun-23 vs Jun-22 ↑44% 1,36,812 93,214 82,725 57,719 38,455 40,504 28,370 31 Mar 18 31 Dec 18 31 Mar 19 31 Mar 20 31 Mar 21 31 Mar 22 31 Mar 23 30 Jun 23 (Pre-Merger) (At Merger) ^ Excluding the outflow of Rs. 2,131 crore
Slide 9: CASA Ratio at 46.5%
CASA Ratio at 46.5% 51.7% 49.8% 48.4% 46.5% 31.9% 11.5% 11.4% 8.7% 31 Mar 18 31 Dec 18 31 Mar 19 31 Mar 20 31 Mar 21 31 Mar 22 31 Mar 23 30 Jun 23 (Pre-Merger) (At Merger) 8
Slide 10: 77% of customer deposits are now Retail
Bank has Diversified its liabilities base: 77% of customer deposits are now Retail Overall Customer Deposits in Rs. crore Rs. 1,48,474 Rs. 34,202 23% Rs. 38,455 2 Rs. 10,400 7… 77% 7 Rs. 1,14,272 Rs. 28,055 3… Dec-18 Jun-23 Retail Deposits Wholesale Deposits 9
Slide 11: Section 2: Loan Assets
Section 2: Loan Assets
Slide 12: Retail, Rural & SME Loans: Market Opportunity
Retail, Rural & SME Loans: Market Opportunity USD 15.6 trillion Bank Credit to Personal and Small Business Segment (Rs. Lac crore), simulated 1,288.8 • Personal Credit (includes Home Loan, Car Loans, Education Loans, Credit Card, Gold loans, Personal Loans and other such personal credit etc.) • Smal
Slide 13: Retail, Rural & SME Loans: Growth Potential for IDFC FIRST Bank
Retail, Rural & SME Loans: Growth Potential for IDFC FIRST Bank Simulated growth of IDFC FIRST Bank’s Retail, Rural and SME Book at different growth rate in the next 20 years (Rs Lac cr) USD 584.9 billion 48.31 40.25 USD 417.9 billion 33.55 34.52 27.95 23.30 USD 249.6 billion 19.41 20.62 16.18 13.48
Slide 14: Personal Credit Market
Personal Credit Market Includes HOME LOANS, CAR LOANS, GOLD LOANS, CREDIT CARDS, EDUCATION LOANS AND OTHER SUCH PERSONAL CREDIT United States – Personal Credit market In $ trillion Mortgages 15.50 Auto 1.55 Credit Cards 0.99 Student Debt 1.60 Others 0.51 Total 20.15 Total GDP of United States 25.0 R
Slide 15: Loan book diversified across more than 20 business lines
The Bank has diversified its loan book across more than 20 business lines Emerging Enterprises Financial Institutions Other Corporates Loan Book: June 30, 2023 7% 8% 3% Rs. 1,71,578 crore Infrastructure Financing Large Corporate 2% 1% Other SME Loans 5% Mortagages Rural Finance 23% 11% ~28% of the t
Slide 16: Bank has brought down the legacy Infrastructure Project financing Book
Bank has brought down the legacy Infrastructure Project financing Book In the last 5 years, the Infrastructure financing book as % of overall Loans & Advances has come down from 36.7% to 2.2% as of June 30, 2023 Legacy Infrastructure Financing Book (Rs. Crore) 36.7% % of Loans & Advances 26,832 19.4
Slide 17: Section 3: Risk Management & Asset Quality
Section 3: Risk Management & Asset Quality
Slide 18: The Bank has developed unique capabilities for Risk Management
The Bank has developed unique capabilities for Risk Management • The Bank has developed unique capabilities to access credit market in India • The credit model has been tested for over 12 years. • During this time, the asset quality of the credit book remained pristine with GNPA at less than 2% and
Slide 19: Break-down of asset quality by business components
Break- down of asset quality by business components. Retail has least Gross NPA and Net NPA for over a decade Segment Gross Advances Breakup Gross NPA Net NPA PCR% Retail, Rural and SME 1,36,066 1.53% 0.52% 83.93% Finance Corporate 26,101 2.65% 0.03% 99.42% (Non-Infrastructure) Infrastructure Financ
Slide 20: NPA levels have improved beyond pre-Pandemic levels
NPA levels have improved beyond the levels during pre-Pandemic times 3,500 90.00% GNPA (Rs Crore) NNPA (Rs Crore) PCR with technical write-offs % 83.93% 82.43% 85.00% 2,966 3,000 2,814 2,670 77.61% 77.21% 80.00% 2,490 2,432 2,500 75.00% 72.16% 2,230 2,182 69.59% 2,075 2,080 68.21% 70.00% 2,000 2,144
Slide 21: Asset Quality Early Indicators
Asset Quality Early Indicators Cheque returns on first presentation down 34% indicating better quality of loan booked Pre- Covid Period Post Covid Period • First EMI (FEMI) Cheque presentation is a direct indicator of the Quality of Booking. 9.9% • Our FEMI cheque Bounce is 34% lesser than FY 20 boo
Slide 22: Asset Quality Early Indicators
Asset Quality Early Indicators Collection Efficiency maintained at more than 99% level consistently over the last 24 months • The Current Bucket Collection % continues to be high at 99.5% • Thus only 0.5% of the portfolio moves to 0-30 bucket. • This in turn feeds into low Gross and Net NPA at the B
Slide 23: Asset Quality Early Indicators
Asset Quality Early Indicators High Collection % leads to low SMA. The SMA1 + SMA 2 is low at 0.85% 1.25% • SMA 1 is the overdue portfolio in Bucket 31-60 days, and SMA 2 is the overdue portfolio in 61-90 days. 0.85% • SMA 1 (31-60 days overdue) and SMA 2 (61-90 days overdue), put together are aroun
Slide 24: New Indian digital Ecosystem supports better controls in lending
New Indian digital Ecosystem supports better controls in lending Stage of Loan New Earlier Now Benefit Processing Ecosystem • Physical - copies of Passport, Ration Card, Identity is High Quality Identity KYC • Biometric KYC - eKYC, cKYC, Aadhaar OTP based KYC etc. Biometric check Risk • Advanced Sco
Slide 25: Cash Flow Assessment: Key Framework for Credit Underwriting
Key Framework for Credit Underwriting Cash Flow Assessment Mandate from customer to Debit Customer’s Bank Account for EMI repayment Main Driver for Good Asset Quality 24
Slide 26: Sector wise NPA show improvement
Sector wise NPA show improvement Personal Credit portfolio show better asset quality Source: RBI Financial Stability Report, June 2023 25
Slide 27: Section 3: Profitability
Section 3: Profitability
Slide 28: Cost to Income ratio: Background
Cost to Income ratio: Background. Bank had to make necessary investments to convert from DFI to commercial Bank • At merger, our total deposits & borrowings were Rs. 1,29,381 crores, of which only Rs. 10,400 crores (8.04%) were retail Deposits and Rs. 1,18,981 crores (91.96%) were institutional borr
Slide 29: Wide Product Suite of a Universal Bank
The Bank has developed a wide Product Suite of a Universal Bank Corporate Lending Retail Lending Solutions Working Capital demand Loans, Cash Credit, Term Home Loans, vehicle Loans, Consumer Loans, Education Loans, Loans, Corporate Bonds / NCDs, Foreign Currency Corporate Retail Personal Loans, Used
Slide 30: Bank has launched and scaled up many new products
Bank has launched and scaled up many new products in the last few years to complete product suite Commercial Credit & Retail Credit Rural Products Retail Fee Businesses Wholesale Banking Prime Home Loans Commercial Vehicle Loans Gold Loans Wealth Management New Car Loans Construction Equipment Loans
Slide 31: Network expansion driving deposit growth
Since merger, the Bank has expanded its network driving the deposit growth Branches ATMs (Including Recyclers) 824 1,069 206 112 Dec-18 Jun-23 Dec-18 Jun-23 30
Slide 32: Cost to Income ratio reduced from 95% to 72%
Despite such investments, Bank has reduced Cost to Income ratio from 95% to 72% in 4 years • During the last three years the bank had to make significant investments in building liabilities and credit card franchise • Despite this, the cost income ratio has come down from 95% to 72% because of the s
Slide 33: How did the Bank reduce C:I ratio despite investments?
How did the Bank manage to reduce C: I ratio despite making necessary investments? • In parallel to making investments, the Bank launched various initiatives within the bank to cut costs. All business and functional teams worked in squads to deliver on this initiative. • Under this cost reduction in
Slide 34: Strong growth in Core Operating Profit
Strong growth in Core Operating Profit (excluding trading gains) The core operating profit (excluding trading gains) increased by 45% against the overall loan book growth of 25%. This demonstrates the power of incremental profitability of the core business model. Core Pre-Provisioning Operating Prof
Slide 35: Improving Operating Profit as % of total assets
Improving Operating Profit as % of total assets Core Pre-Provisioning Operating Profit (PPOP) as a % of Average Total Assets 2.34% 2.14% 2.02% 1.56% 1.22% 1.11% (Post-merger) (Pre-merger 0.76% standalone Bank) 0.32% H1 FY19 H2 FY19 FY20 FY21 FY22 FY23 Q1 FY23 Q1 FY24 (Annualized) (Annualized) (Annua
Slide 36: Consistent growth in operating profits every quarter
Consistent growth in crore operating profits every quarter Quarterly Core Pre-Provisioning Operating Profit (excluding the trading gains) in Rs crore 67% 4,607 2,763 1,427 1,342 1,225 987 1,052 836 745 540 555 601 571 428 468 465 484 405 276 275 328 32 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20
Slide 37: Bank has turned profitable on sustained basis
Bank has turned profitable on sustained basis based on strong Operating Profits and low credit costs Quarterly Net Profit / Loss (Rs crore) 701^ 765 556 605 474 281 343 94 101 130 128 152 72 -218 COVID -370 2nd wave -617 -680 -630 Provisions on Infra DTA A/Cs • This being early life-stage of the Ban
Slide 38: Bank is performing well on the guidance given at merger
We are happy to say that the Bank is performing well on the guidance given at merger Dec-18 Jun-23 Particulars Guidance for FY24-FY25 Status (At Merger) Last quarter CET – 1 Ratio 16.14% >12.5 % 13.70% On Track Capital Capital Adequacy (%) 16.51% >13.0 % 16.96% On Track 30% (FY24), CASA as a % of De
Slide 39: Bank is performing well on the guidance given at merger
We are happy to say that the Bank is performing well on the guidance given at merger. Dec-18 Jun-23 Particulars Guidance for FY24-FY25 Status (At Merger) Last quarter Top 10 borrowers as % of Total Loans & Advances (%) 12.8% < 5% 2.7% Achieved GNPA (%) 1.97% 2.0% - 2.5% 2.17% On Track Asset Quality
Slide 40: Section 4: Culture
Section 4: Culture
Slide 41: Employee Engagements
Employee Engagements x5 Thank you so much IDFC FIRST for this activity of family dinner its a memorable time spend with family because of Idfc first bank 9:9) Pradip Kambli ion (Gurren IDFC FIRST BANK Gives best opportunity for employees. This Platforms is best for grow in banking sector. | am happy
Slide 42: Employee Engagements
Employee Engagements Ge Ihave Completed 4 years and 7 months with Idfe Bank Mother of a 2 year old Toddler People say its beyond difficult to manage i Agree but the way i Got support and the motivation to continue definitely make 99 Srashti Agrawal Debt Manager-Fiows-Personal Loan Itwas very nice to
Slide 43: Employee Engagements
Employee Engagements C6 Ihave Completed 4 years and 7 months with Idfe Bank Mother of a 2 year old Toddler People say its beyond difficult to manage i Agree but the way i Got support and the motivation to continue definitely make 99 Srashti Agrawal Dept Manager-Fiows-Personal Loan IDFC FIRST BANK LT
Slide 44: Employee Engagements
Employee Engagements 43
Slide 45: Employee Engagements
Employee Engagements Executive Education Programmes
Slide 46: Employee Engagements
Employee Engagements 45
Slide 47: Employee Engagements
Employee Engagements 46
Slide 48: Employee Engagements
Employee Engagements 47
Slide 49: Top Of Mind Awareness (TOMA) is a measure of brand awareness
Top Of Mind Awareness (TOMA) is a measure of consumer’s awareness of a brand 22 20 18 16 14 12 10 8 6 4 2 IDFC FIRST 0 2% TOMA in 2021 8/31/2023 SOURCE: KANTAR Brand Track Study 48
Slide 50: TOMA increased from 2% in 2021 to 22% in 2023
Our TOMA (Top of Mind Awareness Score) increased from 2% in 2021 to 22% in 2023 22 Our TOMA was low at 2% in FY 21 20 because we were an Infrastructure 18 DFI which had recently converted to a Bank. 16 14 As result of the initiatives taken in the last few years, our TOMA has IDFC Our Bank’s TOMA Sco
Slide 51: But we are still not well known enough
But we are still not well known enough 75 Top of Mind Awareness about our Brand is still quite low as Top 3 Banks Top of 70 compared to other leading Banks. Mind Awareness is 65 73-75% Our vision is to build a world class bank for the long run. 60 55 We need to raise significant quantum of deposits
Slide 52: Title Sponsor Nomenclature in all official BCCI Communication
Title Sponsor Nomenclature in all official BCCI Communication
Slide 53: IDFC FIRST Bank Cup Title for all BCCI Home series
“IDFC FIRST Bank Cup” Title for all BCCI Home series
Slide 54: Presence on Perimeter Boards & Pitch Mats
Presence on Perimeter Boards & Pitch Mats during all BCCI matches
Slide 55: Logo Presence on Stumps
Logo Presence on Stumps during all BCCI matches
Slide 56: Logo Presence on in-match content activations
Logo Presence on in-match content activations during all BCCI matches
Slide 57: Logo in Man of the Match & Man of the Series Awards
Logo in Man of the Match (MOM) & Man of the Series (MOS) Awards
Slide 58: Logo Presence on match backdrops & media walls
Logo Presence on match backdrops & media walls
Slide 59: Logo Presence on BCCI match tickets
Logo Presence on all BCCI organized match tickets
Slide 60: Sponsors for Domestic Home Series
In addition, we are the sponsors for Domestic Home Series
Slide 61: Important tournaments coming up between 2023–2026
Important tournaments coming up between 2023 – 2026, including with top tier teams such as South Africa, England, New Zealand and Australia Freedom Trophy 2 Tests, 3 ODIs & 5 Tests, 3 ODIs & 3 Tests, 3 ODIs & 3 ODIs & (Ind Vs. SA) 5 T20Is 5 T20Is 5 T20Is 5 T20Is 8/31/2023 60
Slide 62: Thank You
Thank You IDFC FIRST Bank