Axis Bank Limited · NSE:AXISBANK
Axis Bank — Debt Investor Presentation (June 2023)
58 slides from Axis Bank's debt investor presentation, June 2023
Slide 1: Stronger, Consistent and Sustainable Growth
Stronger, Consistent and Sustainable Growth Debt Investor Presentation June 2023
Slide 2: Macro Environment is normalizing
Macro Environment is normalizing 2
Slide 3: Global and India growth are normalizing
Both global and India growth are normalizing, after sharp contraction and recovery Global growth has normalized As has India GDP growth 9.1 7.2 6.3 6.5 6.4 3.9 2.8 3.4 2.8 -2.8 * -5.8 CY19 CY20 CY21 CY22 CY23F * FY19 FY20 FY21 FY22 FY23 FY24F Source: *IMF Estimates 3
Slide 4: High frequency indicators show moderate expansion
High frequency indicators show moderate expansion, despite high base 5.0 4.66 GST collections 12% YOY Mn trips Thousand tonnes 4.5 4.16 100 Air traffic 60% YOY 880 Rs. tn 4.0 91 3.57 90 860 3.5 Passenger(nos) 3.06 3.14 78 Cargo RHS 840 3.0 80 2.5 820 70 2.0 800 57 1.5 60 780 51 773 1.0 768 50 762 76
Slide 5: INR among the most stable EM currencies
INR among the most stable EM currencies, with recovering macros and healthy reserves Performance of INR and peers against the USD India FX reserves, USD bn 30% 700 Since Jan'22 11.8% 27.8% 650 20% 6.9% Since Jan'23 4.2% 600 1.3% 10% 550 0% 500 -0.8% -2.7% -3.5% 450 -4.6% -4.8% -10% -9.0% -9.4% 400 -
Slide 6: Headline CPI likely to ease to around 4.8% in FY24
Headline CPI likely to ease to around 4.8% in FY24 with upside risks emanating from agri disruptions, and downside risks from global slowdown CPI headline and core inflation, recent history and projections 8% 8% Forecast 7% 7% Core 6% 6% 5% 5% 4% 4% 3% 3% 2% 2% CPI - Headline 1% 1% Mar-18 Sep-18 Mar
Slide 7: India goods imports have grown due to prices and demand
India goods imports have grown due to both prices and demand, offset by services exports India exports over the years, USD bn India imports over the years, USD bn FY23 FY23 FY22 FY21 FY21 FY20 FY19 FY19 FY18 FY17 FY17 FY15 USD bn FY16 FY15 USD bn - 150 300 450 600 750 Petro Gold, silver, pearls & st
Slide 8: Yield curve has flattened
Yield curve has flattened, watch for steepening as rate cut cycle eventually starts 8 Repo rate 7.5 12m T-bill 7 10y G-sec 6.5 6 5.5 5 4.5 4 3.5 3 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-22 May-22 Sep-22 Jan-23 May-23 Source: Bloomberg 8
Slide 9: Transmission of monetary policy in progress; credit offtake elevated
Transmission of monetary policy remains in progress; credit offtake elevated 19% 11 % WALR(Fresh Rupee Loans) Non-food credit growth (%, YoY) 17% 10 WATDR outstanding deposits Deposit growth (%, YoY) Repo Rate 15% 9 13% 8 11% 7 9% 6 7% 5 4 5% 3 3% Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-19 Nov-19 Jun
Slide 10: Credit growth has improved, Retail and Services held up
Credit growth has improved, Retail and Services have held up Credit Growth by Segment Changing Segment Share in Credit 100% 25% YoY % Agri & allied % of total Industry 90% 16,200 Services 41,196 20% 80% Personal loans 70% 15% 18,022 60% 36,641 10% 50% Agriculture Industry 40% Services 5% 26,798 Pers
Slide 11: India continues to be an attractive investment opportunity
India continues to be an attractive investment opportunity FDI Inflows in India(1) Net FPI Investment in India(2) US$ bn 60 52 56 54 37 45 41 50 40 8 30 -19 20 10 -2 -2 0 -8 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 FY24TD GDP per capita, US$ at PPP, constant USD(4) 18.1 India China 10.3 7.1
Slide 12: India macro trends returning to longer term levels
India macro trends returning to longer term levels, as early growth phase now over FY20 FY21 FY22 FY23 FY24 F GDP growth (%) 3.7 -5.8 9.1 7.2 6.4 CPI inflation (Avg.) 4.8 6.2 5.5 6.7 4.8 Current Account (% GDP) -0.9 +0.9 -1.6 -2.1 -2.0 Fiscal Deficit: (% GDP) 7.9 13.2 10.4 9.5 8.9 Repo rate (%) 4.40
Slide 13: The Axis Bank Story
The Axis Bank Story 13
Slide 14: Axis Bank at a glance
Axis Bank at a glance Axis Bank $160+ Bn 41 mn+ ~91,900 4,903 Balance sheet size Customers Employees Branches* 3rd largest Private Bank in India Traditional Banking Segment Digital Banking Segment Market Share 5.4% 5.1% 6.0% 18% 17% 14% 3 Assets 1 Deposits 2 Advances 2 UPI Mobile 3 Credit Cards ^^ P
Slide 15: Key Shareholder return metrics
Key Shareholder return metrics Return on Assets (in %) Return on Equity (in %) * 1.82 * 18.38 12.91 1.21 0.70 7.55 0.20 2.34 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Diluted EPS (`) Book Value Per Share (`) * 71.37 406 ** 375 332 42.48 301 22.15 5.99 FY20 FY21 FY22 FY23 Mar-20 Mar-21 Mar-22 Mar-23 *
Slide 16: We have made strong progress in our GPS journey
We have made strong progress in our GPS journey… Identified areas of Sustained, Consistent Financial Outperformance distinctiveness with Deliver world class customer experience focus on Customer Build India’s most profitable Bharat banking franchise Obsession and serving the large under banked Growt
Slide 17: Led by three core areas of execution
…led by three core areas of execution A Deepening a performance driven culture i. Lifted the growth trajectory across business segments ii. Improving profitability metrics iii. Fostering a winning mindset B Strengthening the core i. Built a strong balance sheet ii. Building next generation technolog
Slide 18: Surpassed ROE target and structurally improved NIMs
A Surpassed our aspirational ROE target and have structurally improved NIMs to deliver stronger, consistent and sustainable earnings in the last 4 years 0.39% 81% 14.02% Strengthened the Net PCR^ NPA CET 1 Bank significantly 2.06% 62% 11.27% 18.84% 4.02% Core Op 19% Improved profitability Cons. NIM
Slide 19: Lifted growth trajectory across business segments
A Lifted growth trajectory across business segments CASA deposits Loan growth Credit cards Market Share 1 Burgundy AUM Rs Tn 21% YOY 4 4yryrCAGR^ CAGR In Mn Rs Tn 37% YOY 16% CAGR^ 4.5 28% CAGR^ 3.57 11% CAGR^ for industry CASA 14.2% 2.61 3.7 20.8% 12.7% 2.13 12.3% 3.2 14.9% 1.47 11.5% 1.33 2.6 9.5%
Slide 20: Many all-time highs across different segments
A …substantiated by many ‘all-time highs’ across different segments New savings account opened New credit cards issued Overall retail disbursements (in mn) (in mn) (indexed) 8% YOY 57% YOY 14% YOY 4.20 4.68 4.34 211 3.55 185 2.67 2.95 2.84 1.96 1.94 125 125 100 0.99 FY19 FY20 FY21 FY22 FY23 FY19 FY2
Slide 21: Awards and recognitions
A Our winning mindset is reflected in multiple awards and recognitions Won “Best Private Bank for Client Won “Retail Banker’s International Won “Finnoviti Award for Project Best BFSI Customer Customer engagement initiative Acquisition, Asia”, 5th Annual Asia Trailblazer”, for use of AI & ML Maximus”
Slide 22: Strong momentum in Retail Bank across all businesses
A Strong momentum in Retail Bank across all businesses Deposits^^ Burgundy Wealth Cards and Payments management ^^ Retail loans^^ Bharat Banking • 15% YOY growth in overall • 3.6 trillion Burgundy • 22% YOY growth in retail • 17% incremental market • 26% YOY growth in MEB total deposits assets under
Slide 23: Deposit franchise growing faster than the industry
Our Deposit franchise continues to grow faster than the industry 15% Continue to focus on improving the franchise quality further 10% 1 “Right fit” customers to accelerate ‘Premiumization’ • ~870 bps YOY increase in share of Premium segment in Retail SA portfolio 2 Higher digital channel contributio
Slide 24: Leading player in India's Wealth Management space
The Bank is a leading player in India’s Wealth Management space All figures In ₹ Cr Overall Burgundy AUM^ has grown steadily ** 29% CAGR* 37% YOY 3,57,447 Burgundy Private adjudged as “Best 2,60,768 Private Bank” for 2,13,085 Client Acquisition, 1,47,002 Asia 1,23,298 1,32,702 79,127 Mar-17 Mar-18 M
Slide 25: Rs 4.9 trillion Retail loan book well diversified
Rs 4.9 trillion Retail loan book remains well diversified ~ 78% of our retail book is secured in Rs Crores Mar-23** QOQ YOY % Prop Retail book** (in ₹ Billion) Home Loans 1,57,392 7% 10% 32% Rural loans 70,918 19% 26% 15% Disbursement mix in retail 25% 22% loans 23% Personal loans 54,561 8% 21% 11%
Slide 26: Highest ever Credit Cards issued during the quarter
Highest ever number of Credit Card’s issued during the quarter Increase in Cards in force (CIF) market share with increasing card issuances aided by KTB^ partnerships ~1mn cards issued for 5th consecutive quarter 32% share of KTB1 sourcing to total card issuances in FY23 1.11 1.13 2 1.04 1.04 0.99 1
Slide 27: Comprehensive Wholesale Banking franchise
A Amongst the best and most comprehensive Wholesale Banking franchise for our customers Growth in focus Project Neo Transaction Banking Leadership in DCM One Axis segments Digital transformation • 24% YOY growth in • 11.1% Foreign LC • 18% market share in • Deliver One Axis by being • Market leading
Slide 28: Strong growth in SBB+SME+MC book
Strong growth in SBB+SME+MC book despite tightening our risk standards 20% 18% 15% 14% 30% CAGR* 30% CAGR in combined MSME, MC and SBB segment since Mar’20 36,512 41% CAGR* 26,481 22% CAGR* 17,148 92,723 13,117 75,223 59,034 15.5% 51,620 46% CAGR* Axis Bank’s Incremental MSME 42,982 17,859 28,617 ma
Slide 29: Strengthened proposition as a Transaction Bank
We have strengthened our proposition as a Transaction Bank Current Account Digital Adoption 73% Current Account customers 17% YoY growth in Current Account Balances registered for internet/mobile banking Foreign LC Market Share Forex Turnover Market Share Increase in Market Share Increase in Market
Slide 30: Well placed to benefit from 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 bond book Amount mobilized / arranged^ Market share and Rank* 56,051 54,977 34% YOY 1st 1st 45,144 44,990 41,784 1,03,058 76,899 18.3% 18.0% FY22
Slide 31: One Axis: value creation in key group entities
One Axis : Significant value creation happening in our key group entities Detailed One Axis presentation Link Invst Banking Consumer Retail Fintech Asset Management Trustee TReDS platform Insurance & Inst Equities focused NBFC Brokerage platform One of the fastest Leadership position in AAA rated NB
Slide 32: Project NEO launches show strong product-market fit
Project NEO launches continue to demonstrate strong product- market fit across customer adoption and market recognition APIs power multiple archetypes of integration & continue to grow 3x TRANSACTION Large complex VOLUME ▪ Market leading depth and breadth of organizations Transaction Banking APIs ▪
Slide 33: Strong capital position with improved RWA profile
B Strong capital position with improvement in RWA profile Trend in Capital Adequacy Ratio 19.12% 18.54% 17.53% 17.64% 16.57% 15.84% 14.95% 13.34% 15.40% 15.24% 11.68% 11.27% 14.02% 11.13% CET 1 CAR 1.15% 1.07% 0.55% AT 1 CAR 1.10% 3.08% 3.53% 3.30% 3.04% 2.65% 3.07% 2.20% Tier 2 CAR Mar-17 Mar-18 Ma
Slide 34: Self sustaining capital structure to fund future growth
B Self sustaining capital structure to fund future growth Historically capital raise was supporting capital consumption… … profit accretion getting adequate to fund growth Includes 44 bps 2.65% 1.96% 0 towards assets acquired 1.91% 15.24% 15.24% 5.87% 3.38% 5.14% 14.02% 11.13% CET-1 Mar'17 Accretion
Slide 35: Legacy asset quality adequately dealt with
B Legacy asset quality adequately dealt with Improvement in Asset Quality metrics with significant Overall Credit Costs: FY10 to FY23 build up of provision coverage 81% 3.57% 75% 72% 3.53% 69% PCR Gross Credit Cost 62% 2.82% Net Credit Cost * 2.78% 5.26% 4.86% 2.15% 1.91% 1.87% 3.70% 1.89% 1.35% 1.5
Slide 36: Liquidity & Funding profile remains healthy
B Liquidity & Funding profile remains healthy Liquidity Coverage Ratio continues to remain Bank has diversified and stable funding profile higher than regulatory requirements Higher than average LCR Liquidity Coverage Ratio maintained in Q4FY23, partly to pay for Citibank CB* acquisition Other Liabi
Slide 37: Building next generation technology architecture
B Building next generation technology architecture ▪ Cloud-first, Cloud-native architecture leading to leadership in Cloud adoption with 76 apps on Cloud Modernizing the Core ▪ 38% increase in new apps adopting cloud in FY23; 100+ containerized environments for micro services ▪ Reduction in infra p
Slide 38: Cloud adoption leading to significant outcomes
B Cloud adoption leading to significant outcomes Architecture & Security 38% 3000+ Increase in new apps adopting Virtual Machines running across cloud in FY22-23 multiple operating system 50+ 10+ Reference architecture created Standard Security Document created 96%+ 98%+ for Cloud services with S
Slide 39: Transformation projects accelerated our GPS journey
B Organization wide transformation projects have accelerated our GPS journey Triumph (Liabilities) Zenith (Credit Cards) Unnati ( Retail Assets) 870 bps 4.2 mn 2.1 times YOY improvement in Credit Cards issued in FY23 Retail disbursements in FY23 by premium retail SA mix value as compared to that in
Slide 40: Digital: Early traction visible
C Digital: Early traction visible, our relentless focus continues We are investing heavily in building capabilities… …and introduced re-imagined customer journeys …that has led to improvement in digital adoption and new innovative offerings … Digital transactions * (%) 95% 91% 1,750+ 390+ 88% People
Slide 41: 'Bharat Banking' strategy scaling up well
C ‘Bharat Banking’ strategy has been scaling up well Customer centric framework that is connecting all parts of the Bank Drive higher business growth and increase market share in Rural and Semi Urban markets through asset led liability strategy Lending opportunities in RuSu markets to complement the
Slide 42: Sparsh: our Customer Obsession program
C Sparsh: our Customer Obsession program, has been set-up in line with best-in class globally, with focus on impact and sustenance Sparsh is creating a distinctive position for Axis Bank in the space of “Customer Delight”; Program running with focus across four pillars Build institutional capabiliti
Slide 43: ESG has Bank-wide sponsorship
C ESG has 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 Environmental Social Governance Above 80th percentile among global banks on DJSI in 2022 ~14,600
Slide 44: Recent Quarterly performance
Recent Quarterly performance 44
Slide 45: Key metrics for Q4FY23
Key metrics for Q4FY23 Snapshot (As on 31st March 2023) Absolute (` Cr) QOQ | YOY Growth Deposits** 15% YOY Advances 19% YOY Q4FY23 Q3FY23 FY23 Q4FY23 Q4FY23 FY23 23%YOY1 Net Interest Income 11,742 11,459 42,946 2% 33% 30% Fee Income 4,676 4,101 16,216 14% 24% 25% Operating Expenses 7,470 6,847 27,3
Slide 46: Net interest margin improved 73 bps YOY
Net interest margin improved 73 bps YOY Advances mix by rate type Cost of Funds MCLR Duration Split 32% (Mar-23) 2% ~ 68% of loans floating 4.75% 1%4% 1M 2% 20% 3M, 2% 4.34% 4.10% 4.09% 6M, 5% 3.97% 3.87% 3.83% 3.89% 3.77% 41% 12M, 11% Repo linked MCLR linked Other EBLR* Base Rate linked Q4FY21 Q1FY
Slide 47: NIM improvement led by structural drivers
NIM improvement led by structural drivers across the businesses 1 Improvement in balance sheet mix 2 Reducing share of low yielding RIDF bonds 3 Improvement in composition reflected through improvement in average CASA % Retail & SME as % of loan book 69% As a % to total assets 67% 5.1% 4.7% 64% 3.5%
Slide 48: Strong growth in fees across business segments
Strong growth in fees; granularity built across our business segments All figures in ₹ Crores Retail Banking fees Retail fee mix 31% YOY 14% QOQ 43% 42% 37% 3,227 26% 2,612 2,819 19% 22% ^ 19% 18% 18% 18% 20% 18% 2,463 2,375 TPP Retail Cards & Payments Retail Assets excl cards & Retail Liabilities &
Slide 49: Cost growth at 14% YoY
Cost growth at 14% YoY; integration expenses contribute 2% to YoY growth; continue to invest in technology and growth-related businesses YoY Incremental Opex in Q4FY23 was led by volume linked 28% 34% 22% 16% expenses and Growth Business 199 142 305 Incremental YOY cost break up 248 (Rs 893 Crore) (
Slide 50: Other important information
Other important information • Debt instruments currently outstanding • Credit Ratings • Sustainability at Axis Bank • Shareholding Pattern • Financials 50
Slide 51: 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 Senior Fixed Rate Note 3 3.817% 18-Apr-19 18-Apr-24 40 (Green Bond) Subordinate Fixed Rate Note 4 4.10% 08-Sept-21
Slide 52: Credit Ratings (as of June'23)
Credit Ratings (as of June’23) 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 19th May 2023 Update as of 13th March 2023 S&P Ratings BBB- Stable I
Slide 53: Committed to Positive Climate Action and the SDGs
Committed to Positive Climate Action and Achieving the SDGs • Axis Bank is the first Indian Bank to constitute a standalone ESG Committee of the Board • In September 2021, the Bank announced commitments aimed at supporting India’s low-carbon and equitable economic transition • The Bank’s commitments
Slide 54: Financial Performance
Financial Performance Financial Performance ($ mn) Q4FY23 Q4FY22 % Growth FY23 FY22 % Growth Interest Income A 2,917 2,163 35% 10,364 8,200 26% Other Income B = C+D+E 596 514 16% 2,008 1,852 8% - Fee Income C 569 457 24% 1,973 1,582 25% - Trading Income D 10 28 (64%) (29) 198 - - Miscellaneous Incom
Slide 55: Balance Sheet
Balance Sheet Balance Sheet As on 31st Mar’23 As on 31st Mar’22 As on 31st Mar’23 As on 31st Mar’22 % Growth CAPITAL AND LIABILITIES In ` Crores In ` Crores in $ Mn in $ Mn Capital 615 614 75 75 0.2% Reserves & Surplus 1,24,378 1,14,411 15,137 13,924 9% ESOP Outstanding 424 149 51 18 185% Deposits 9
Slide 56: Details of key Business metrics
Details of key Business metrics Axis Bank (Reported) Axis Bank (excl. Citi portfolio) Balance sheet YOY Growth QoQ Growth YOY Growth QoQ Growth (in $ Mn) Q4FY23 Q4FY23 (%) (%) (%) (%) Total deposits 1,15,242 15% 12% 1,10,213 10% 7% - Current Account 18,148 17% 18% 17,926 15% 16% - Savings Account 36
Slide 57: 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 58: Thank you
Thank you A's BANK