Hdfc Bank Limited · NSE:HDFCBANK
Hdfc Bank — Investor Day (October 2023)
47 slides from Hdfc Bank's investor day presentation, Oct 30, 2023
Slide 1: Exchange cover letter on analyst meeting
CIN: L65920MH1994PLC080618 HDFC Bank Limited, Email: shareholder.grievances@hdfcbank.com Zenith House, Website: www.hdfcbank.com Opp. Race Course Gate no. 5 & 6, Keshavrao Khadye Marg, Mahalaxmi, Mumbai- 400034 Tel.: 022 - 3976 0000 / 07 / 12 October 30, 2023 BSE Limited National Stock Exchange of I
Slide 2: HDFC Bank Day 2023 - Buy Side
Classification - Public HDFC Bank Day 2023 Buy Side October 30, 2023 Classification - Public
Slide 3: India provides opportunities
MACRO FACTORS India provides opportunities Execution key to capture growth; risk management in place to efficiently deliver returns • Credit – under-served and under-penetrated • Demographic advantage – over 50% population in the under 35 years age bracket • GDP per capita picking-up – increasing af
Slide 4: Leadership team
MANAGEMENT Leadership team Well poised for capturing growth opportunities • Organisation structure renewed effective 1st Oct’23 • Leadership rotations every 3 to 5 years – provides resiliency in management • Leadership depth – many levels below the senior leadership HDFC Bank Presentation, October 2
Slide 5: What we have – positioned to consistently create value
CEO PRIORITIES What we have – positioned to consistently create value What we have Create incremental value Priorities to drive Onboarding Employee first Harness people Growth capabilities strategy At-scale distribution Customer first The Next Customer 3-5 Years Customer Robust risk engagement service
Slide 6: Employee – Customer – Technology
CEO PRIORITIES Employee – Customer – Technology Employees Customers Technology • ~200K empowered personnel • 91 million customers – Sep’23; • Technology investments driving customers are the focal point and growth and efficiencies • Culture Elevation; fostering positive, customer service our obsessi
Slide 7: Group customer experience, avenue to deepen relationship
POWER OF THE GROUP Group customer experience, avenue to deepen relationship Group companies to provide synergistic benefits and avenue for future growth Customers Incoming 6 mn unique customers 3 mn Customers : 91 mn # Mn 7 9 11 6 5 3 4 2018 2019 2020 2021 2022 2023 H1 Sep23 New liability relationsh
Slide 8: Merger creating runway for growth in unsecured lending
SIGNIFICANT OPPORTUNITIES FOR THE BANK Merger creating runway for growth in unsecured lending % mix of personal loans and payment products in retail 41% 34% 25% 22% Mar'13 Mar'18 Mar'23 Sep'23 HDFC Bank Presentation, October 2023 7
Slide 9: To summarise – outcome of driving our priorities
HDFC BANK To summarise – outcome of driving our priorities • Granular and sustainable retail funding • Healthy mix of low-cost funds • Asset mix shift towards retail • Greater mobilisation through internal channels • Credit deployment – in quality assets • Home loans – step-up in activation of distr
Slide 10: Branch Banking
Classification - Public Branch Banking Classification - Public
Slide 11: Building a Strong Customer Franchise
Classification - Public • Building a Strong Customer Franchise LTD Unique Customer Trends (mn) Distribution Expansion- Incremental Deposit Growth Trends 10000 100 7821 80 2.30 6342 1.20 4715 X 60 X Rs In 5000 3241 Bln 40 56.1 61.9 71.0 82.8 2242 49.2 20 972 0 0 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 # F
Slide 12: Retail Banking Metamorphosis
Classification - Public • Retail Banking Metamorphosis Distribution : Brick & Mortar Distribution : Phygital ( Digital + Human) Distribution Format : Standard Branch – Only Distribution Format : Multiformat Standard based headcount variable format on Distbn. planning tool, Smart Banking Lobby, Digit
Slide 13: Evolving Paradigms - Retail Banking Imperatives
Classification - Public • Evolving Paradigms - Retail Banking Imperatives 2 4 6 Catchment Scoping Relationship Enabling phygital & Acquisition Architecture transformation AI Analytics driven Customer life Segmented Micro market Approach customer centric Insight focused multi format conversations Led
Slide 14: Multi-Format Distribution
Classification - Public Multi - Format Distribution Multi Format Distribution Smart Banking Lobby / Digital Business Correspondents / Key Retail Phygital Branch Banking Units Partners • Open architecture • SBL -Presence in Captive Locations (Corporate Parks / Universities / Paramilitary) • Increment
Slide 15: Catchment Scoping and Acquisition
Classification - Public • Catchment Scoping and Acquisition Catchment Scoping Customer Need Potential Offering Solutions Potential Extraction & Segmentation Identification Dimensioning • The process of scoping and dimensioning has been migrated to CRM platform • Ensures better conversion efficiency
Slide 16: Customer Lifecycle Management enabled through Analytics
Classification - Public • Customer Lifecycle Management enabled through Analytics Feedback loop Robust feedback loops : Digital footprint and RM interactions incorporated for the first time CRM Scoring engine Integrator Product intent : Channel Multi-way prioritization of intent – propensity updated
Slide 17: Relationship Management Architecture
Classification - Public • Relationship Management Architecture # HNW Customers (Lakh) • Largest Relationship Management Programme in Industry : • 15.40 Mn Customers covered under Managed Programme 154 • 6.00 Mn Branch Managed and 9.4 Million Virtually Managed 126 128 135 104 • Largest Liability Book
Slide 18: Customer Insight based Propositions
Classification - Public Customer Insight based Propositions 1st Super Premium Senior Citizen A/c in Industry Super Premium Savings Account 1st Super Premium Minor Account in Industry Customer Insight : Protection Against Frauds, Assistance in Customer Insight : Lifestyle focused Customer Insight : N
Slide 19: Building Digital and Paperless Retail Experience
Classification - Public • Building Digital and Paperless Retail Experience Digital penetration : Savings Ac 87% | Salary Ac 60% | Fixed Deposit 67% | D Mat Ac 91% | Insta CA Ac 69% Insta Service Journeys : 18 Live Journeys | 15 Work in Progress 2 mn Instructions processed Xpressway : One destination
Slide 20: Leveraging post Merger Synergies
Classification - Public • Leveraging post Merger Synergies Significant Headroom for Mortgage Penetration in existing Customer base. 90% unpenetrated customer base 65% of HDFC’s existing borrowers not banking with HDFC Bank – Great opportunity for Deposits / X Sell / Upsell. Extensive distribution fo
Slide 21: Retail Mortgages
Classification - Public Retail Mortgages Classification - Public
Slide 22: Home Loan Strategy
Classification - Public Home Loan Strategy 1 Higher Sales Turnover 2 Large CASA Opportunity 3 Build on Distribution Strength 4 Build on Process Reengineering & Digital 5 ROA Accretive 6 Summary Classification - Public
Slide 23: Higher Sales Turnover
Classification - Public Higher Sales Turnover Significant higher business from the Branch network TAT Significant business growth from Open market distribution which includes physical & digital. 3X Faster Uptake in disbursals through Builder distribution Classification - Public
Slide 24: Large CASA Opportunity
Classification - Public Large CASA Opportunity Savings Account Opportunity for all incremental Home Loan customers Bouquet of Products (~65%-70% are NTB) which will act as an enabler for: Savings Account Family Accounts ✓ Platform to Cross sell minimum 9 products in customer journey… we expect subst
Slide 25: Build on Distribution Strength
Classification - Public Build on Distribution Strength Capitalising on Enhanced network in Tier 2 and Tier 3+ locations. Leveraging on already LAP operational geographies. ~90% branches are activated for lead generation, which will substantially improve each quarter. Strengthening open market lead g
Slide 26: Build on Process Reengineering & Digital
Classification - Public Build on Process Reengineering & Digital 3X Faster Turn Around Time Improvement in Turn Around Time (TAT) which results into Customer Satisfaction & Improves Employee Productivity Credit Buying Analytics with Digital ✓ Analyses Transaction Pattern of Customers to offer Produc
Slide 27: Home Loans ROA Accretive
Classification - Public ROA Accretive Every housing loan creates opportunity for minimum 9 other products – Customer Savings Account, Family Savings Account, General Insurance, life Insurance, Credit Card, Consumer Durable Loans, Wealth Products, Refurbishment Loan and other Retail Lending products.
Slide 28: Summary
Classification - Public Summary Clear Notch higher sales turnover Post Merger Better Quality Portfolio Better Quality Maintaining clear notch higher growth over peers Quarter on Quarter Portfolio Sensible Sensible Pricing Offering 9 Bouquet of Products seamlessly through digital platforms… for Prici
Slide 29: Retail Assets
Classification - Public Retail Assets HDFC Bank Day 2023
Slide 30: Retail Assets overview
Classification - Public RETAIL ASSETS ▪ Retail Assets Strategy ▪ Business Growth Programs ▪ Merger Synergies ▪ Portfolio Quality HDFC Bank Day 2023 Classification - Public
Slide 31: Retail Assets Strategy
Classification - Public RETAIL ASSETS Strategy Merger Synergies and Focus on internal Customer Industry First Digital Offerings Pristine Portfolio Quality and Franchise Risk based pricing • Pioneers in Indigenous Digital • Capitalize on opportunities arising Products & Processes. • Lowest delinquenc
Slide 32: Retail Assets Business Growth Programs
Classification - Public RETAIL ASSETS Retail Assets Business Growth Programs • Digital unassisted New to Bank • 8000+ Branches across 3700+ cities and growing • 20+ million salaried customers across Corporates and Government segments • Leveraging Analytics for scoring and targeting high propensity c
Slide 33: Xpress Loans Journeys: Unsecured Loans
Classification - Public RETAIL ASSETS Xpress Loans Journeys: Unsecured Loans (Digital % of Total Volume) • 10 second loans - New To Bank customers Chart Title • End to End Digital Journey 2% 1% 1% 61% 59% 49% 23% 23% 25% • Digital verification of Employment and Business in the journey 14% 17% 25% YT
Slide 34: Changing the way consumers buy cars
Classification - Public RETAIL ASSETS Changing the way consumers buy cars • Targeting Existing and New to Bank Customers 96,200+ • End to End Digital 31% Happy Customers New to Bank Customers • Integration with leading OEM portals 33 What’s New Zero paper; zero Bank statement through In principle ap
Slide 35: Two-Wheeler Loan with best in Industry TAT
Classification - Public RETAIL ASSETS • 95% of Loans moved to Xpress Two-Wheeler Loan with best in Industry TAT - Approval in 2 Minutes & Disbursal in 1 Hour • 90% Straight Through Processing - Manual underwriting has moved to proprietary algo based model Digital Capabilities • Digital Partnerships
Slide 36: DiGiLife - Financial Solution against HDFC Life Insurance Policies
Classification - Public RETAIL ASSETS DiGiLife - Financial Solution against HDFC Life Insurance Policies Launched for Select • Funding against Insurance Policies issued by HDFC Life customers from September 2023 • Seamless Journey within minutes • Opportunity - 8 lac customer base What’s New Reducti
Slide 37: Gold Loan
Classification - Public RETAIL ASSETS Gold Loan Distribution Strategy Growth • With incremental distribution, Gold Loan is now available in ~ 4.5k 3.0x branches. 2.0x • Increased opportunity to bring back internal customers from competition. 1.6x 1.3x 1.0x • Increased reach to untapped segment espec
Slide 38: Merger Synergies
Classification - Public RETAIL ASSETS Merger Synergies • eHDFC Ltd customers with significant New to Bank • Opportunity to X-sell Retail Asset products through NTB customers • Offers for propositions : • Pre-Approved Auto Loans • Pre-Approved / Pre-Qualified Personal Loan • Extending to rest RA busi
Slide 39: Classification - Public Classification - Public
Classification - Public Classification - Public
Slide 40: Commercial and Rural Banking
Classification - Public Commercial and Rural Banking
Slide 41: Commercial and Rural Banking – Business Metrics 2Q FY'24
Classification - Public COMMERCIAL AND RURAL BANKING Commercial and Rural Banking Business Metrics – 2Q FY’24 TFG EEG Transportation ECG Group Emerging Emerging SLI / MFI Enterprise Group • CV CE Asset Growth ~30% Corporate Group • IFG • Tractor BBG RBG HCF Business Banking Rural Banking Healthcare
Slide 42: Market Position
Classification - Public COMMERCIAL AND RURAL BANKING Market Position ECG MSME CV CE HCF KCC SLI Source : ECG – Greenwich report, MSME - Transunion Cibil, CVCE – Manufacturer data, KCC – SLBC Data, HCF & SLI – Internal assessment and reported numbers of industry players 41 Classification - Public
Slide 43: Priority Sector Lending
Classification - Public COMMERCIAL AND RURAL BANKING Priority Sector Lending PSL At Bank Level PSL Core PSL Total PSL Category Overall 46.8% 56.1% PSL OPSL 26.7% 27.1% Micro 11.0% } Surplus by 15.6% 10.9% Other Agri 7.1% 9.9% SMF 2.1% } Short by 8.8% 8.2% 42 Classification - Public
Slide 44: CRB Assets Growth
Classification - Public COMMERCIAL AND RURAL BANKING CRB Assets Growth Clockwork Growth Portfolio Quality - GNPA Sept ’23 Sept ’23 29.2% CRB 1.61% CRB Ex Agri 1.13% PSL book on ANBC Jun ’21 Sept ’23 25.1% 78% CRB average growth rate for FY ’20 and FY ’21 was 15% ₹ 1.66 Lakh crores Assets Added in th
Slide 45: CRB Strategy
Classification - Public COMMERCIAL AND RURAL BANKING CRB Strategy Q2 Customer 1 + 1 Strategy Outreach Plan to Add # of H1 Progress on Customers in # customer 11 Major NTB Abhiyaan’s conducted across all FY’24 Addition segments in 1100 locations 31,091 potential 1.15 lakh customers 1 + 1 Strategy to
Slide 46: Conclusion
Classification - Public COMMERCIAL AND RURAL BANKING Conclusion FY ’22 FY ’25 2x FY ’23 FY ’26 2x 45 Classification - Public
Slide 47: Safe Harbour Statement
Classification - Public SAFE HARBOUR STATEMENT Certain statements are included in this release proceedings in India and in other jurisdictions we and political conditions, instability or uncertainty which contain words or phrases, such as ‘will’, are or become a party to, the future impact of new in