Icici Bank Limited · NSE:ICICIBANK
Icici Bank — Debt Investor Presentation (February 2016)
40 slides from Icici Bank's debt investor presentation, February 2016
Slide 1: ICICI Group: Performance & Strategy
ICICI Group: Performance & Strategy February 2016
Slide 2: Forward-looking statements disclaimer
Certain statements in these slides are forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. Mo
Slide 3: Indian economy & banking sector
Indian economy & banking sector 3
Slide 4: India: strong long term fundamentals
India: strong long term fundamentals Favourable Healthy savings & demographics investment rates Key drivers of growth High potential for Rising per capita infrastructure income development 4
Slide 5: India: strong long term fundamentals
India: strong long term fundamentals Favorable demographic profile A young population with median age of 25 years 1,432 1,4321,501 1,501 Rising share of working age population 1,053 1,053 840 • Addition of around 12 million to the 840 workforce every year for next five years • Working age population
Slide 6: India: strong long term fundamentals
India: strong long term fundamentals Healthy savings & investment rate Per Capita GDP (USD)1 Investment rate2 ~34%3 1,432 1,501 1,432 1,501 1,053 ~25% 1,053 1,688 840 840 749 2005 2015 FY2003 FY2015 Domestic consumption and investments driven by favourable demographics and rising income levels 1. So
Slide 7: Banking sector framework
Banking sector framework Under penetrated sector • Bank credit / GDP: ~59% Growth • Retail credit / GDP: ~10% potential • Mortgage / GDP: ~5% Funding • High proportion of deposit funding profile • Conservative equity to assets • 21.5% of net demand and time liabilities (NDTL) invested in government
Slide 8: Banking sector framework
Banking sector framework Conservative regulatory framework Average capital adequacy for the system Capital adequacy 12.7%1 Implementation of Basel III in FY2014 Capital requirements 1% higher as compared to BCBS Asset From April 1, 2015 loan restructurings lead to classification the asset be
Slide 9: ICICI Bank: an overview
a ICICI Bank ICICI Bank: an overview
Slide 10: ICICI Bank
ICICI Bank Largest private sector bank in India in terms of total assets Tier I capital adequacy of 12.76% at December 31, 20151 as per RBI’s guidelines on Basel III norms Diversified loan portfolio Large customer base Global presence in 17 countries (including India) Investment grade ratings from M
Slide 11: ICICI Bank: focus & objectives
ICICI Bank: focus & objectives 11
Slide 12: Focus & objectives
Focus & objectives Robust funding profile Balance sheet Diversified loan mix with increasing strength share of retail Leverage capital for growth Profitability Granular & stable income streams improvement Efficiency of operations 12
Slide 13: Performance over the years
Performance over the years Healthy balance sheet growth Robust funding profile ~17% CAGR in CASA deposits since Mar 2009 Retail deposits as % of domestic deposits increased from ~50% at Mar 2009 to ~76% at Dec 2015 Diversified loan mix ~ 17% CAGR in domestic loans since Mar 2011 ~21% CAGR in
Slide 14: Performance over the years
Performance over the years Strong core operating performance Granular revenue streams Margin improvement driven by focus across businesses Domestic margins improved by ~90 bps since FY2010 Overseas margins improved from 0.41% in FY2010 to 1.94% in 9M-2016 Improvement in operating efficiency Do
Slide 15: Performance over the years
Performance over the years Sustained improvement in return ratios About 90 bps improvement in standalone RoA over FY2009 Consolidated RoE improved from less than 8% in FY2009 to 14.6% in 9M-2016 15
Slide 16: Q3-2016: performance review
Q3-2016: performance review Growth driven by retail lending Growth in domestic loans improved to 20.4% y-o-y at December 31, 2015 from 17.0% y-o-y at September 30, 2015; retail loan growth at 24.0% Share of retail loans in total loans increased from 40.9% at December 31, 2014 to 43.8% at December 31
Slide 17: Q3-2016: performance review
Q3-2016: performance review Operating performance remained healthy NIM improved by 7 bps y-o-y to 3.53% NII grew by 13% Retail fee growth remained healthy Non-interest income Demonstrated value in insurance grew by 36.4% subsidiaries; concluded sale of 4% shareholding in ICICI Life Operating e
Slide 18: Q3-2016: performance review - asset quality trends
Q3-2016: performance review Asset quality trends ` billion FY2014 FY2015 9M-2016 Restructuring additions (A) 66.33 53.94 23.06 Gross NPA additions (B) 45.40 80.78 102.46 Of which: slippages from 7.27 45.29 25.41 restructured loans (C) Net fresh additions (A+B-C) 104.46 89.43 100.11 NPA additions of
Slide 19: Q3-2016: performance review - asset quality trends
Q3-2016: performance review Asset quality trends ` billion Dec 31, 2014 Dec 31, 2015 Gross non-performing assets (A) 132.31 213.56 Gross restructured loans (B) 131.05 120.37 Total (A+B) 263.36 333.93 Total as a % of gross customer assets 5.97% 6.58% 19
Slide 20: Q3-2016: performance review - asset quality trends
Q3-2016: performance review Asset quality trends ` billion Dec 31, 2014 Dec 31, 2015 Net non-performing assets (A) 48.31 100.14 Net restructured loans (B) 120.52 112.94 Total (A+B) 168.83 213.08 Total as a % of net customer assets 3.91% 4.31% 20
Slide 21: Looking ahead
a ICICI Bank Looking ahead Te
Slide 22: Operating environment
Operating environment Renewed optimism regarding India’s growth prospects Signs of improvement in economic indicators Repo rate However, positive trends CPI inflation at 5.7% in RBI cut repo rate by in private sector cash January 2016; core 125 bps since January flows & investments yet CPI1 in
Slide 23: Outlook for financial services
Outlook for financial services Revival in economic growth will present several opportunities Focus on manufacturing, infrastructure & Opportunities across all financial urbanisation services businesses Rising incomes & positive Continued opportunities for retail demographics financial services Oppor
Slide 24: ICICI Group
ICICI Group Savings Protection Investments Capital Credit Flows Spanning the spectrum of financial services 24
Slide 25: Our positioning & strengths
Our positioning & strengths Strong franchise across business segments Strong and growing retail franchise Well established corporate franchise along with overseas presence Sustained Sustained India’s second Strong franchises; private private largest AMC market-linked sector sector business
Slide 26: Our positioning & strengths
Our positioning & strengths Strong retail franchise Sustained Robust Healthy Stable growth in loan growth in asset granular portfolio fee quality deposits growth income trends The Bank continues to scale up its retail business and invest in strengthening the franchise and distribution infrastructure
Slide 27: Our positioning & strengths
Our positioning & strengths Significant investments made in distribution Branch network ~52% of branches in semi- urban and rural areas Supplemented by 13,372 ATMs Focus on cross-sell along with customer service at branches 27
Slide 28: Our positioning & strengths
Our positioning & strengths Leadership in technology Key initiatives: focus on customer experience Rich mobile banking Refreshed & intuitive app 24*7 Touch Banking internet banking branches website Banking on Social media India’s First Digital Bank e-wallet for all - whether customer or not 28
Slide 29: Our positioning & strengths
Our positioning & strengths Leadership in technology Key initiatives: focus on payments Contactless cards Transit cards Trade online Dedicated solutions for government clients FX online Corporate clients e-Auction i-Bizz 29
Slide 30: Our positioning & strengths
Our positioning & strengths Significant presence in rural & semi-urban markets Technology Approach to Network solutions lending Branches Aadhaar integration Selective geographical for DBT1 approach Gramin branches Mobile based Collateral based BCs1 & CSPs2 remittance services lending Bank on wheels
Slide 31: Our positioning & strengths
Our positioning & strengths Rural lending: diverse product suite & granular lending Key products include loans against gold jewelry, farm equipment loans, kisan credit card, agri term loans and loans to Self Help Groups (SHG) Portfolio contributes~14% ~25% y-o-y growth at to retail loans December 31
Slide 32: Way forward
Way forward Retail & rural business: sustain strong franchise and performance Continue to expand branch and ATM network Focus on maintaining technology leadership Drive operating efficiency & productivity across businesses Maintaining robust growth in the retail portfolio while monitoring risks 32
Slide 33: Way forward
Way forward Corporate business: selective approach to incremental business Key measures Limits on single borrower/group exposures significantly lower than the regulatory limit for lower rated companies/groups Increase in proportion of higher rated exposures in portfolio Limits on project finance exp
Slide 34: Way forward
Way forward International business: focus on profitability and returns Growth calibrated to global funding Branches markets & Indian corporate credit demand Focus on commercial banking, including Lending primarily working capital lines for Indian companies to Indian abroad & MNCs engaged in trad
Slide 35: Strong capital position
Strong capital position Capital ratios significantly higher than regulatory requirements Standalone capital 16.74% 12.76% Consolidated Basel III total capital CAR adequacy ratio at 16.75%, Tier 1 ratio Tier I at 12.73% at December 31, 20151 December 31, 20151 Excess Tier-1 ratio of 5.76% over the mi
Slide 36: Potential positives
Potential positives Aligning RBI norms to BCBS Treatment of deferred would increase Tier-1 capital by tax assets (DTA) ~₹ 25.00 bn at Dec 31, 2015 ICICI Bank’s Tier-1 capital is composed almost entirely of core equity capital; considerable headroom to raise additional Tier-1 capital BCBS: Basel Comm
Slide 37: Significant value in subsidiaries
Significant value in subsidiaries Aggregate value of shareholding post Life & general announced transactions at ~` 330 bn; insurance assuming retention of majority stake, further pre-tax gains of ~ ₹ 70 bn Second largest asset management ICICI AMC company in India ICICI Securities Largest online ret
Slide 38: In summary
In summary Sustained focus on strengthening franchise Scaled up retail business; continued investments in distribution & technology Achieved significant improvement in balance 2011 onwards sheet & operating parameters Focus on growth; 2009 onwards enhancing franchise Driving structural improvements
Slide 39: In summary
In summary Key strengths Strong capital position supported by healthy operating earnings Significant value in subsidiaries; demonstrated with recent transactions in insurance business Focus areas Growth to be driven by strong retail and rural franchise Focus on resolution of corporate exposures and
Slide 40: Thank you
a ICICI Bank Thank you
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