Axis Bank Limited · NSE:AXISBANK
Axis Bank — Q1 FY2017 Earnings Presentation
34 slides from Axis Bank's earnings presentation, Jul 22, 2016
Slide 1: Quarterly Earnings Presentation Q1 FY17
Quarterly Earnings Presentation Q1 FY17 1
Slide 2: 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 3: Performance Highlights
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 3
Slide 4: Summary of Key Metrics for Q1FY17
Summary of Key Metrics for Q1FY17 21% YOY Net Profit 11% YOY Net Interest Income 11% YOY Fee Income 21% YOY Advances1 Return on Equity 12.04% NIM 3.79% 16% YOY Deposits1 GNPA 1 2.54% 18% YOY CASA1 PCR 1 69% 1 as on 30th June, 2016 4
Slide 5: Our franchise continues to perform well
Our franchise continues to perform well Retail Franchise registered strong performance Deposits 16% YOY Advances 21% YOY Fee Income 11% YOY 43% 41% 42% CASA 18% YOY Retail Advances Retail Fee Income 24% YOY 19% YOY SA Deposits 18% YOY Stable Earnings Profile 14% 9% 1.19% 12.04% YOY YOY Operating Rev
Slide 6: There has been some moderation in shareholder return metrics
There has been some moderation in shareholder return metrics Return on Assets (in %) Return on Equity (in %) 1.78 1.83 1.70 1.72 20.51 18.23 18.57 17.49 1.19 12.04 FY13 FY14 FY15 FY16 Q1FY17* FY13 FY14 FY15 FY16 Q1FY17* Diluted EPS (`) Book Value Per Share (`) 223 230 34.4 30.9 188 26.4 26.1 163 23.
Slide 7: We are well capitalized to pursue growth opportunities
We are well capitalized to pursue growth opportunities 15.42% 15.47% 15.29% 15.67% 15.05% 3.29% ** 2.90% 3.21% 3.12% 2.78% 23 bps YOY 12.15% 12.21% 12.35% 12.51% 12.38% Jun-15* Sep-15* Dec-15* Mar-16 Jun-16* Tier 1 CAR Tier 2 CAR Total CAR * including unaudited Net Profit for the quarter / half year
Slide 8: Performance Highlights: Growth
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 8
Slide 9: We have delivered strong growth on key balance sheet parameters
We have delivered strong growth on key balance sheet parameters All figures in YOY growth Balance Sheet Advances 19% 20% 23% 23% 18% 18% 21% 21% 21% 14% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Savings Bank Deposits CASA 20% 18% 18% 17% 16% 17% 14% 14% 13% 12% Jun-15 Sep
Slide 10: Diversified loan mix with growth driven by retail
Diversified loan mix with growth driven by retail All figures in ` Crores Total Advances Loan Mix 21% YOY (As on June 30, 2016) 3,38,774 3,44,925 3,15,367 2,98,066 2,84,649 1,38,521 1,43,159 1,25,796 1,15,204 1,19,448 Retail Corporate 41% 46% 41,186 44,869 43,611 38,763 40,068 SME 1,38,550 1,48,385
Slide 11: Deposit franchise continues to be robust
Deposit franchise continues to be robust All figures in ` Crores Savings Bank Deposits Current Account Deposits 18% YOY 18% YOY 63,652 1,05,793 53,692 53,564 55,229 1,00,185 89,717 92,758 46,838 84,776 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Retail Term Deposits Trend i
Slide 12: Performance Highlights: Earnings Quality
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 12
Slide 13: Operating Profit delivery has been steady
Operating Profit delivery has been steady All figures in ` Crores Operating Revenue Operating Profit 14% YOY 9% YOY 7,247 7,255 4,399 4,469 6,354 6,500 4,092 6,103 3,985 3,628 2,694 2,738 2,298 2,041 2,338 4,056 4,062 4,162 4,553 4,517 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q
Slide 14: NIM has moderated during the quarter
NIM has moderated during the quarter All figures in ` Crores Cost of Funds NIM - Global NIM - Domestic 4.11% 4.11% 4.24% 6.12% 5.99% 4.04% 4.04% 5.86% 5.84% 5.81% 3.85% 3.97% 3.81% 3.79% 3.79% Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 3.81% Movement in NIM 3.79% Net Inter
Slide 15: Operating Profit margin has reduced compared to last year
Operating Profit margin has reduced compared to last year Operating Profit Margin Trend 3.60% 3.68% 3.43% 3.41% 3.32% 3.25% 3.29% 3.09% 3.11% Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Movement in Operating Profit Margin • Operating expenses - 102 new branches 3.68% 0.02% 0.08% 0
Slide 16: Fee growth is steady. Granular fees continue to grow.
Fee growth is steady. Granular fees continue to grow. All figures in ` Crores Fee Income Fee Composition 2,254 11% YOY 1,813 1,885 1,719 Corporate 1,551 Retail, 42% Credit, 25% Treasury & DCM, 2% SME, 4% Transaction Banking, 27% Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Fee Growth (YOY) Granular Fees** 23%
Slide 17: Performance Highlights: Retail Franchise
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 17
Slide 18: Retail Bank has market leading digital capabilities
Retail Bank has market leading digital capabilities Market Share* Mobile Banking Spends (`Cr) 20,861 159% YOY 13.2% 17,598 16,335 10,566 6,296 3.4% Deposits Mobile transactions (by value) Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 * Source : RBI as on March 2016 Transaction Volume Growth YOY Transaction Mix
Slide 19: We have also been opening new branches with renewed pace
We have also been opening new branches with renewed pace New Branches Opened Employee Strength 9,089 52,398 50,135 154 46,366 47,876 43,309 99 102 84 62 52 31 20 - Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Branch Mix* ATMs 2,589 2,743 2,805 2,9
Slide 20: Retail Lending continues to grow steadily
Retail Lending continues to grow steadily Retail Advances All figures in ` Crores Retail as % of Advances 24% YOY 40% 41% 41% 38% 1,38,521 1,43,159 33% 1,19,448 1,25,796 1,15,204 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Mar-13 Mar-14 Mar-15 Mar-16 Jun-16 Retail Advances Mix • Sourcing strategy focused on
Slide 21: Payments businesses continue to drive deep customer engagement
Payments businesses continue to drive deep customer engagement All figures in mn Credit Cards – Cards In Force Debit Cards – Cards In Force 44% YOY 13% YOY 2.6 2.4 16.3 2.2 2.0 1.8 15.5 14.4 14.5 14.1 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Cards Spends Strong positioni
Slide 22: Performance Highlights: Asset Quality
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 22
Slide 23: Gross and Net NPAs increased in Q1FY17
Gross and Net NPAs increased in Q1FY17 Gross NPA Net NPA 2.54% 1.08% 1.68% 1.67% 1.38% 1.38% 0.75% 0.70% 0.48% 0.48% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Net Restructured Assets Provision Coverage Ratio 2.80% (% of Net Customer Assets) 2.65% 78% 78% 2.31% 2.25% 72% 7
Slide 24: Most of the slippages on Corporate Lending were from the Watch List
Most of the slippages on Corporate Lending were from the Watch List All figures in ` Crores Watch List Activity, Q1 FY17 Watch List Outstanding 22,628 FB Outstanding 20,295 315 32 22,628 20,295 2,680 0 2,626 2,562 NFB Outstanding Mar-16 Jun-16 Mar-16 Devolvement Movement Slippage Upgrade Jun-16 of N
Slide 25: The composition and rating mix of the Watch List has changed
The composition and rating mix of the Watch List has changed 27% 26% Sectoral composition of Watch List Top 10 Sectors 7% 6% 6% 4% 3% 3% 3% 3% CRE Textiles Power Construction Shipping Mining Industrials Iron & Steel Cement Oil and Gas Infra Internal Rating Mix (by value) 98% 0% 0% 0% 2%BBB AAA AA A
Slide 26: Some corporate exposures were downgraded during the quarter
Some corporate exposures were downgraded during the quarter Corporate Lending SME Lending 6% 6% 6% 7% 6% 11% 12% 11% 12% 12% 14% 15% 14% 14% 14% 18% 18% 20% 20% 22% 31% 31% 31% 30% 30% 63% 64% 64% 63% 63% 29% 28% 27% 26% 20% 9% 8% 8% 8% 8% 11% 12% 16% 11% 11% 8% 7% 8% 8% 9% Jun-15 Sep-15 Dec-15 Mar-
Slide 27: Industry concentration is stable
Industry concentration is stable Industry Concentration Outstanding as on (% of total outstanding) 30th June, 2016 (%)1 Rank Sectors Non- Fund- Iron & Steel Power fund Total based based 1. Infrastructure2 7.22 10.31 7.91 6.8% 6.1% 2. Financial Companies3 4.45 13.40 6.44 6.0% 5.8% 5.6% 3. Engineering
Slide 28: Performance Highlights: Other important information
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 28
Slide 29: Treasury Portfolio and Non-SLR Corporate Bonds
Treasury Portfolio and Non-SLR Corporate Bonds Investment Bifurcation Book Value* (` Crore) Category Proportion Modified Duration* Government Securities1 94,702 Held Till Maturity (HTM) 56% 6.63 years Corporate Bonds2 20,049 Others 8,525 Available For Sale (AFS) 33% 2.95 years Total Investments 1,23
Slide 30: Bank continues to lead the league tables in Debt Capital Markets
Bank continues to lead the league tables in Debt Capital Markets All figures in ` Crores Key Highlights Placement & Syndication of Debt Issues Dominant player in placement and syndication of debt issuances Ranked No. 1 debt arranger by Prime Database 42,485 for year ended March 2016 40% YOY 30,4
Slide 31: We have a small, strategic international network
We have a small, strategic international network UK3 Shanghai1 DIFC1,Dubai2 Dhaka2 HongKong1 & Abu Dhabi2 Colombo1 Singapore1 1 – Overseas Branches; 2 – Overseas Representative offices; 3 – wholly-owned subsidiary Trend in overseas total assets (USD bn) Value Proposition Wholesale Banking solution
Slide 32: Shareholding Pattern (as on 30th June, 2016)
Shareholding Pattern (as on 30th June, 2016) Others 13.31% SUUTI GDR& 11.51% 3.57% Life Insurance Indian Institutions Corporation 9.24% 14.61% General Insurance Corp & others 3.59% Foreign Institutional investors 44.17% Share Capital `477 crores Shareholders’ Funds `54,871 crores Book Value Pe
Slide 33: The Bank continues to earn accolades from the external community
The Bank continues to earn accolades from the external community Ranked amongst the Top 75 Best Performing Private Bank, safest banks in the world Financial Advisor Awards15-16 Best among Large Banks for Best Corporate Payment Project – Technology Ranked Best Domestic Bank Digital Banking, Analytics
Slide 34: Thank You
Thank You 34