Idfc First Bank Ltd. · NSE:IDFCFIRSTB
Idfc First Bank — Q1 FY2022 Earnings Presentation
69 slides from Idfc First Bank's earnings presentation, Jul 31, 2021
Slide 1: Cover letter to stock exchanges
IDFCFIRSTBANK/SD/129/2021-22 July 31, 2021 The Manager-Listing Department The Manager-Listing Department 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. Mum
Slide 2: Investor Presentation – Q1 FY22
Investor Presentation – Q1 FY22
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by and is the sole responsibility of IDFC FIRST Bank (together with its subsidiaries, referred to as the “Company”). By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute or form
Slide 4: Bank At a Glance (as of 30 June 2021)
Bank At a Glance (as of 30 June 2021) Gross Retail Customer CASA Funded Assets (%) Deposits Ratio Assets ₹ 1,13,794 Cr 64%* ₹ 84,893 Cr 50.86% 9% (Y-o-Y) 36% (Y-o-Y) % of Gross Funded Assets % of Total Deposits Capital Net Rating Branches Adequacy Worth (#) Ratio (%) Tier-2 bonds: AA (CRISIL) 15.56%
Slide 5: Table of Contents
5 PROGRESS SINCE MERGER 7 MANAGEMENT COMMENTARY ON Q1-FY22 RESULTS CREATION OF IDFC FIRST BANK Table 15 of 24 VISION & MISSION OF IDFC FIRST BANK Contents 27 PRODUCT OFFERINGS 36 BUSINESS & FINANCIAL PERFORMANCE 54 BOARD OF DIRECTORS & KEY SHAREHOLDERS
Slide 6: Key Metrics and our progress vis-à-vis Guidance provided at the time of the merger
Key Metrics and our progress vis-à-vis Guidance provided at the time of the Progress Since Merger merger in Dec 2018 Dec-18 Guidance given at the time Particulars Mar-19 Mar-20 Mar-21 Jun-21 Status (At Merger) of merger for FY24-FY25 C A Net-worth Rs. 18,736 Cr Rs. 18,159 Cr Rs. 15,343 Cr Rs. 17,808
Slide 7: Key Metrics and our progress vis-à-vis Guidance provided at the time of the merger
Key Metrics and our progress vis-à-vis Guidance provided at the time of the Progress Since Merger merger in Dec 2018 Dec-18 Guidance given at the time Particulars Mar-19 Mar-20 Mar-21 Jun-21(YoY) Status (At merger) of merger for FY24-FY25 Retail Funded Assets Rs. 36,236 Cr Rs. 40,812 Cr Rs. 57,310 C
Slide 8: Table of Contents
5 PROGRESS SINCE MERGER 7 MANAGEMENT COMMENTARY ON Q1-FY22 RESULTS CREATION OF IDFC FIRST BANK Table 15 of 24 VISION & MISSION OF IDFC FIRST BANK Contents 27 PRODUCT OFFERINGS 36 BUSINESS & FINANCIAL PERFORMANCE 54 BOARD OF DIRECTORS & KEY SHAREHOLDERS
Slide 9: Q1 results: Sustainable Growth in Core Franchise
Management Q1 22 results: Sustainable Growth in Core Franchise commentary on Q1-FY22 results Strong Growth in Retail Assets: • Retail Book increased 30%^ YoY to Rs. 72,766 crore as on June 30, 2021 from Rs. 56,043 crore as on June 30, 2020. • Retail constitutes 68% of funded loan assets as on June 3
Slide 10: Asset Quality Trends: The Bank is confident of improving asset quality
Management Asset Quality Trends: The Bank is confident of improving asset quality commentary on over coming quarters Q1-FY22 results Asset Quality Trends Dec-19 Mar-21 Jun-21 Change from Pre-Covid PCR (%) Particulars (Pre-Covid) (Post Covid 1.0) (During Covid 2.0) Levels ( C – A ) As of 30 Jun 21 (A
Slide 11: Asset Quality Trends contd.
Management Asset Quality Trends: The Bank is confident of improving asset quality commentary on over coming quarters.. Contd.. Q1-FY22 results • Due to COVID-19 second wave, there were strict lockdowns across the country in April and May 21, and in part of June-21 including in major states like Delh
Slide 12: Provisions: Bank has made prudent provision for COVID 2nd wave
Management Provisions: Bank has made prudent provision for COVID 2nd wave, commentary on provisions likely to taper off in coming quarters Q1-FY22 results Provisions for the Quarter: 1. The Bank has created additional COVID-19 provisions of Rs. 350 crore during the quarter taking the total COVID-19
Slide 13: Future Asset Quality Indicators
Management Future Asset Quality Indicators: Key quality Indicators showing commentary on improvement which points to lower delinquency and credit losses in future. Q1-FY22 results Improved quality of Sourcing: New to Credit customers as % incremental Improved quality of Sourcing: Customers having Bu
Slide 14: Profitability: Highest ever Core Operating Profits in Q1 FY22
Management Profitability: Highest ever Core Operating Profits posted in Q1 FY22, commentary on Q1-FY22 results strong NIM improvement. Steady Improvement in NIM% Highest ever Core Operating Profits in Q1-FY22 5.51% 4.86% 4.91% 5.04% 5.09% • Because of strong growth in Net Interest Margin of the bank
Slide 15: Future Profitability Drivers are getting stronger
Management Future Profitability Drivers are getting stronger. Incremental RoE is commentary on Q1-FY22 results healthy, will replace old book in due course 1. Legacy book being replaced by new book with strong incremental margins and strong Incremental ROE. a) The incremental yield of the retail boo
Slide 16: Table of Contents
5 PROGRESS SINCE MERGER 7 MANAGEMENT COMMENTARY ON Q1-FY22 RESULTS CREATION OF IDFC FIRST BANK Table 15 of 24 VISION & MISSION OF IDFC FIRST BANK Contents 27 PRODUCT OFFERINGS 36 BUSINESS & FINANCIAL PERFORMANCE 54 BOARD OF DIRECTORS & KEY SHAREHOLDERS
Slide 17: The Creation of IDFC FIRST Bank: Merger of erstwhile Capital First & IDFC Bank
The Creation of IDFC FIRST Bank : Merger of erstwhile Capital First & Creation of IDFC FIRST Bank IDFC Bank IDFC FIRST Bank was created by the merger of Erstwhile IDFC Bank and Erstwhile Capital First on December 18, 2018. Prior to this IDFC First Bank was a premier infrastructure Financing Domestic
Slide 18: Background information of the two merging entities
Creation of IDFC FIRST Bank Background information of the two merging entities Erstwhile IDFC BANK Erstwhile CAPITAL FIRST LIMITED IDFC Limited was set up in 1997 with equity participation from the Mr Vaidyanathan had built ICICI Bank’s Retail Banking business Government of India, to finance infrast
Slide 19: Background information of the two merging companies.. Contd.
Creation of IDFC FIRST Bank Background information of the two merging companies.. Contd. Erstwhile IDFC BANK Erstwhile CAPITAL FIRST LIMITED … The bank was launched through this demerger from IDFC Limited in … He then turned around the company from losses of Rs. 30 crore and November 2015. During th
Slide 20: Erstwhile IDFC Bank pre-merger history and track record
Creation of IDFC Erstwhile IDFC Bank pre-merger history and track record FIRST Bank • IDFC raises Rs. 700 million in a second • IDFC incorporated in Chennai on the growth equity fund and Rs. 930 million in • IDFC Mutual Fund ranked 10th in the recommendation of the Expert Group on a new asset-class
Slide 21: Erstwhile Capital First pre-merger history and track record
Creation of IDFC FIRST Bank Erstwhile Capital First pre-merger history and track record Background AUM (Rs. Cr) Profit (Rs. Cr) Wholesale AUM Retail AUM Total AUM 32,623 327 26,997 Capital First was a successful NBFC, 239 19,824 206 growing its loan book and net profits at 16,041 114 166 11,975 a 5
Slide 22: Asset quality trends at erstwhile Capital First
The asset quality trends over the last 8 years at erstwhile Capital First is displayed below Creation of IDFC as a demonstration of our capabilities in this space. Bank is moving to safer credit FIRST Bank categories based on lower cost of funds. Since the retail loan book of the Bank has been built
Slide 23: Pre merger - Proforma Financials of IDFC Bank and Capital First
Pre merger - Proforma Financials of IDFC Bank and Capital First – Creation of IDFC FIRST Bank P&L (H1 FY19) Proforma Total In Rs. Crore Erstwhile IDFC Bank Erstwhile Capital First (H1 FY 19) Funded Assets / AUM 75,332 32,623 1,07,955 Net-Worth 14,776 2,928 17,704 NII 912 1,143 2,055 Fees & Other Inc
Slide 24: Since merger, IDFC FIRST Bank has been building strong foundation
Creation of IDFC Since merger, IDFC FIRST Bank as a merged entity, has been building FIRST Bank strong foundation for a long term growth engine In January 2018, Erstwhile IDFC Bank and Erstwhile Capital First announced a merger. Shareholders of Erstwhile Capital First were to be issued 13.9 shares o
Slide 25: Table of Contents
5 PROGRESS SINCE MERGER 7 MANAGEMENT COMMENTARY ON Q1-FY22 RESULTS CREATION OF IDFC FIRST BANK Table 15 of 24 VISION & MISSION OF IDFC FIRST BANK Contents 27 PRODUCT OFFERINGS 36 BUSINESS & FINANCIAL PERFORMANCE 54 BOARD OF DIRECTORS & KEY SHAREHOLDERS
Slide 26: Vision and Mission of IDFC FIRST Bank
Vision, Mission & Culture of the Bank Vision and Mission of IDFC FIRST Bank Our Vision: To build a world class bank for aspiring India, driven by human values and technology, and be a force for social good.. Our Mission: We want to touch the lives of millions of Indians in a positive way by providin
Slide 27: Culture setting at IDFC FIRST Bank
Vision, Mission & Culture of the Culture setting at IDFC FIRST Bank Bank Message from MD and CEO to the Bank employees and shareholders. Source: Annual Report 2019, 2020 26
Slide 28: Table of Contents
5 PROGRESS SINCE MERGER 7 MANAGEMENT COMMENTARY ON Q1-FY22 RESULTS CREATION OF IDFC FIRST BANK Table 15 of 24 VISION & MISSION OF IDFC FIRST BANK Contents 27 PRODUCT OFFERINGS 36 BUSINESS & FINANCIAL PERFORMANCE 54 BOARD OF DIRECTORS & KEY SHAREHOLDERS
Slide 29: Our key philosophy: Ethical & transparent Banking
Our key philosophy: Ethical & transparent Banking. In all products we launch, we are driven about one thing: to deliver high quality products and services at affordable rates. Employees’ DNA are being coded to be sincere about working in the customer’s interest at all times. 28
Slide 30: Customer First
Key Value Driver for the Bank “Customer First” IDFC First Bank is insanely focused on Customer experience and Customer Service. We believe to build a bank where we can offer High Quality Banking at affordable rates to reach millions of customers is a great privilege of our lifetime. Being a new bank
Slide 31: Customer First Approach
Customer First Approach We have an unique approach to new and existing products and services, manifested in the many First’s to our credit viz., - Higher interest rates on savings - Monthly interest credits on savings accounts, - Higher spending limits and insurance cover on Debit Cards than the mar
Slide 32: Bank has wide bouquet of Consumer and MSME loans
Bank has wide bouquet of Consumer and MSME loans .. across varied customer segments including Consumers and MSMEs in different parts of India Prime Home Loans: Affordable Home Loans: Loan Against Property: New and Pre-owned Car Business Loans: Starting at 6.9% to select Prime Smaller ticket size hom
Slide 33: Comprehensive product suite on Savings, Current, Transaction services, Payments
Comprehensive product suite on Savings, Current, Transaction services, Advisory, Payments, Fleet, Corporate solutions digitally. IDFC FIRST Bank provides wide range of Deposit facilities along with Savings Accounts, Deposit accounts, Wealth Management, Forex Services, Cash Management Services and In
Slide 34: Our Savings Account Proposition Highlights
Our Savings Account Proposition Highlights Monthly Interest credit on Savings account: India’s first large universal bank to offer this feature, a Customer First Interest up to 5% : This enables our customers to earn between 34% and 58% more with IDFC FIRST Bank Savings Account as compared to leadin
Slide 35: India's truly unique net and mobile banking
Self-Service Mobile App India’s truly unique net and mobile banking, with new age look and advanced Industry first features. Seamless customer servicing via our newly launched net banking application Settle your bills in a one click with automated reminders, eg: Netflix, Cult fit etc. Your card your
Slide 36: Since Launch in Jan 2021, the Bank has issued 3+ Lac Credit Cards
Since Launch in Jan 2021, the Bank has issued 3+ Lac Credit Cards till June 30, 2021 INDUSTRY IDFC FIRST Bank Credit Cards customer friendly A Credit Card, like no other initiatives Customer friendly card launched by the Bank, keeping in line with the ethos of always customer first. Multiple Fees (A
Slide 37: Table of Contents
5 PROGRESS SINCE MERGER 7 MANAGEMENT COMMENTARY ON Q1-FY22 RESULTS CREATION OF IDFC FIRST BANK Table 15 of 24 VISION & MISSION OF IDFC FIRST BANK Contents 27 PRODUCT OFFERINGS 39 BUSINESS & FINANCIAL PERFORMANCE 57 BOARD OF DIRECTORS & KEY SHAREHOLDERS
Slide 38: Business & Financial Performance of the Bank for Q1 FY22
BUSINESS & FINANCIAL PERFORMANCE OF THE BANK FOR Q1 FY22 • Update on Liabilities • Assets Update • Key Financial Parameters ✓ Income Statement ✓ Balance Sheet ✓ Net Interest Margin ✓ Capital Adequacy
Slide 39: Built a strong retail Deposit Base from millions of customers
Business & Financial Performance Built a strong retail Deposit Base from millions of customers. • The Bank quickly raised deposits from millions of customers because of our relentless focus on excellent service to our customers, our Customer First approach, our superior product propositions, and cap
Slide 40: The Bank now has a strong and well diversified liability franchise
Business & Financial The Bank now has a strong and well diversified liability franchise Performance CASA Deposits has grown by Rs. 41,166 crore since merger with As a result, the CASA Ratio (%) of the Bank has grown from 8.68% 1 in Rs. crore 2 (Dec-18) at merger to 50.86% (Jun-21) YoY growth (FY21)
Slide 41: Granularization of the Customer Deposits through quality liability franchise
Business & Financial Performance Granularization of the Customer Deposits through quality liability franchise As part of the granularization, the Bank increased its Deposits Similarly, the Bank increased Deposits with balance Rs. 1 crore 1 2 and less, as % of total customer deposits, from 18% (Mar-1
Slide 42: Strong growth in retail deposits has reduced dependence on wholesale deposits
Business & Strong growth in retail deposits has reduced the dependence on wholesale Financial deposits and has provided greater stability. Performance In Rs. Crore Jun-20 Mar-21 Jun-21 YOY% Legacy Long Term Bonds 10,638 7,892 7,645 -28% Legacy Infra Bonds 10,166 9,508 9,487 -7% Refinance 12,000 15,4
Slide 43: Business & Financial Performance of the Bank for Q1 FY22
BUSINESS & FINANCIAL PERFORMANCE OF THE BANK FOR Q1 FY22 • Update on Liabilities • Assets Update • Key Financial Parameters ✓ Income Statement ✓ Balance Sheet ✓ Net Interest Margin ✓ Capital Adequacy
Slide 44: Strong and consistent growth in consumer financing over the last decade
Business & Strong and consistent growth in consumer financing over the last decade. This is our DNA. Financial Disbursed millions of loans life to date, including new-to-credit and new-to-bank. Performance • The Bank provides financing for prime home loans, affordable home loans, business banking, l
Slide 45: Strong and consistent growth in consumer financing over the last decade
Business & Strong and consistent growth in consumer financing over the last Financial Performance decade. All amounts are in Rs. crore unless specified • The bank has a rich history of 10 years of growing the retail loans book. Rs. 94 crores to ~ Rs. 36,000 crores in 10 years, and to Rs. 72,766 cror
Slide 46: Retail Funded Assets Mix
Business & Financial Retail Funded Assets Mix Performance Dec-18 Jun-20 Jun-21 ECLGS Others ECLGS Others Others ECLGS Portfolio Rural (JLG/KCC) 4% Portfolio 1% 1% Portfolio 0% 12% Rural (JLG/KCC) 2% 0% 10% Credit Card Rural Home Loan Credit Card Home Home 0% (JLG/KCC) 12% Loan Loan 0% Credit Card 12
Slide 47: The Bank reduced wholesale, infrastructure loan assets since merger
Business & The Bank reduced wholesale, infrastructure loan assets since merger; Top 10 Financial Performance borrowers’ concentration reduced. The Bank reduced the wholesale funded assets by 15% Out of this, infrastructure financing (Rs crore) has reduced by 23% in 1 in Rs. crore 2 in Rs. crore duri
Slide 48: Diversified Loan Book
Business & Financial Diversified Loan Book Performance In Rs. Crore June-20 Mar-21 Jun-21 Growth% (YoY) Growth% (QoQ) Home Loans 7,681 10,613 10,919 42% 3% Loan against Property 12,445 15,320 15,087 21% -2% SME Loans 8,427 10,812 10,100 20% -7% Wheels 8,718 10,763 10,169 17% -6% Consumer Loans 11,08
Slide 49: Detail of the identified stressed pool
Detail of the identified stressed pool, where the Bank has proactively identified the Business & accounts, which are standard on the books as of now, but are stressed or potential NPAs, Financial Performance and taken provisions for the same O/S Client Description (Rs. Crore) Provision PCR% Comments
Slide 50: Identified Stressed Assets pool reduced by 57%
Business & Identified Stressed Assets pool (apart from the declared NPAs) reduced by 57% from Rs. Financial 3,195 crores to Rs. 1,375 crore during the last one year. Provision Coverage rises to 67%. Performance During the last one year, because of COVID-1.0 followed by COVID-2.0 in the recent quarte
Slide 51: Business & Financial Performance of the Bank for Q1 FY22
BUSINESS & FINANCIAL PERFORMANCE OF THE BANK FOR Q1 FY22 • Update on Liabilities • Assets Update • Key Financial Parameters ✓ Income Statement ✓ Balance Sheet ✓ Net Interest Margin ✓ Capital Adequacy
Slide 52: Quarterly Income Statement
Business & Financial Performance Quarterly Income Statement Growth (%) Growth (%) In Rs. Crore Q1 FY21 Q4 FY21 Q1 FY22 Q-o-Q Y-o-Y Interest Income1 3,949 3,993 4,089 2% 4% Interest Expense 2,205 2,033 1,905 -6% -14% Net Interest Income 1,744 1,960 2,185 11% 25% Fee & Other Income 148 600 449 -25% 20
Slide 53: Balance Sheet
Business & Financial Performance Balance Sheet Growth (%) Growth (%) In Rs. Crore Jun-20 Mar-21 Jun-21 (Q-o-Q) (Y-o-Y) Shareholders' Funds 17,436 17,808 20,170 13% 16% Deposits 69,832 88,688 91,312 3% 31% - Retail Deposits 39,872 63,894 63,894 0% 60% - Wholesale Deposits (including CD) 29,959 24,795
Slide 54: Capital Adequacy Ratio is at 15.56% with CET-1 Ratio at 14.86%
Business & Financial Capital Adequacy Ratio is at 15.56% with CET-1 Ratio at 14.86% Performance In Rs. Crore Jun-20 Mar-21 Jun-21 Common Equity 17,065 16,974 19,460 Tier 2 Capital Funds 528 647 916 Total Capital Funds 17,593 17,622 20,376 Total RWA 117,077 1,27,943 130,946 CET 1 Ratio (%) 14.58% 13.
Slide 55: Table of Contents
5 PROGRESS SINCE MERGER 7 MANAGEMENT COMMENTARY ON Q1-FY22 RESULTS CREATION OF IDFC FIRST BANK Table 15 of 24 VISION & MISSION OF IDFC FIRST BANK Contents 27 PRODUCT OFFERINGS 36 BUSINESS & FINANCIAL PERFORMANCE 54 BOARD OF DIRECTORS & KEY SHAREHOLDERS
Slide 56: Board of Directors: MD & CEO Profile
Board of Directors & Key Board of Directors: MD & CEO Profile Shareholders With over two decades in financial services in India, V. Vaidyanathan has seen India through many lens – first as a banker (1990-2010, Citibank), then as an entrepreneur (2010-2019, Capital First) and a professional banker ag
Slide 57: Board of Directors
Board of Directors & Key Shareholders Board of Directors MR. AASHISH KAMAT - INDEPENDENT DIRECTOR Mr. Aashish Kamat has over 30 years of experience in the corporate world, with 24 years being in banking & financial services & 6 years in public accounting. He was the Country Head for UBS India, from
Slide 58: Board of Directors
Board of Directors & Key Shareholders Board of Directors MR. SANJEEB CHAUDHURI - INDEPENDENT DIRECTOR Mr. Sanjeeb Chaudhuri is a Board member and Advisor to global organizations across Europe, the US and Asia. He has most recently been Regional Business Head for India and South Asia for Retail, Comm
Slide 59: Shareholding Pattern & Key Shareholders as of June 30, 2021
Board of Directors & Key Shareholding Pattern & Key Shareholders as of June 30, 2021 Shareholders Scrip Name : IDFC FIRST Bank (BSE: 539437, NSE:IDFCFIRSTB) Key Shareholders % Holding (through their respective various funds and affiliate companies wherever applicable) Other Body President of Corpora
Slide 60: IDFC FIRST Bank
IDFC FIRST Bank ✓ Set for Growth. ✓ Set for Profitability. ✓ Set for Scale. ✓ Customer First. ✓ Digital. 59
Slide 61: Thank You
THANK YOU IDFC FIRST Bank
Slide 62: Annexure 1
Annexure 1 5 YEAR ROADMAP AS GUIDED AT MERGER THE COMBINED ENTITY IN DECEMBER 2018
Slide 63: Asset Strategy for IDFC FIRST Bank as guided at the time of merger
5-Y Guidance at Asset Strategy for IDFC FIRST Bank as guided at the time of merger in December Merger 2018. • Growth of Assets: • The Bank plans to grow retail loan assets from Rs. 36,236 crore (December 31, 2018) to over Rs. 100,000 crore in the next 5 years • The Bank plans to wind down loans to i
Slide 64: Liability Strategy for IDFC FIRST Bank as guided at the time of merger
Liability Strategy for IDFC FIRST Bank as guided at the time of merger in 5-Y Guidance at Merger December 2018. • CASA Growth: This is a key focus and growth area for the bank. We plan to increase the CASA Ratio from 8.68% as of December 31, 2018 on a continuous basis year on year and strive to reac
Slide 65: Profitability Goals for IDFC FIRST Bank as guided at the time of merger
5-Y Guidance at Profitability Goals for IDFC FIRST Bank as guided at the time of merger in December Merger 2018. • Net Interest Margin: The bank plans to expand the NIM to about 5.0% - 5.5% in the next 5 years based on better cost of funds and carefully selecting the product segments where we have s
Slide 66: Annexure 2
Annexure 2 Since the business model of Capital First is an important part of the business being built in the merged bank, the brief history and the progress of Capital First is being provided for ready reference to investors. 65
Slide 67: Successful Trajectory of Growth and Profits at Capital First
Business Model Successful Trajectory of Growth and Profits at Capital First of Capital First History of Capital First Limited The Company was first listed on Stock Exchanges in January 2008. Between 2010 to 2012, Mr Vaidyanathan acquired a stake in the company and executed a Management Buyout (MBO)
Slide 68: Successful Trajectory of Growth and Profits at Capital First
Successful Trajectory of Growth and Profits at Capital First. Business Model This page is an extract from Capital First investor Presentation of September 2018, which is the last quarter prior to merger. of Capital First Presented here to demonstrate the capability of the core loan book and the trac
Slide 69: Capital First: the Return on Equity continuously improved over the quarters
Capital First: the Return on Equity continuously improved over the quarters… Business Model This page is an extract from Capital First investor Presentation of September 2018, which is the last quarter prior to merger. Presented of Capital First here to demonstrate the capability of the core loan bo