Axis Bank Limited · NSE:AXISBANK
Axis Bank — Axis Capital Conference November 2017
30 slides from Axis Bank's conference presentation, November 2017
Slide 1: Performance and Outlook
Performance and Outlook November 2017 NSE: AXISBANK BSE: 532215 LSE (GDR): AXB 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: Macro Economic Picture
Macro Economic Picture 3
Slide 4: Growth in industrial production has been weak
Growth in industrial production has been weak Growth in IIP and Components 14% Mining Manufacturing 12% Electricity 10% IIP 8% 6% 4% 2% 0% -2% (% YoY, 3MMA) -4% Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 4
Slide 5: Output parameters have partly rebounded
Output parameters have partly rebounded Select output indicators Cement shows moderate growth Steel production slows 20% Cement Production (RHS) 29 25% Steel Production (RHS) 10 Thousands Thousands Mn Tn Mn Tn 15% YoY % 27 20% YoY % 9 10% 15% 25 5% 10% 8 23 0% 5% 0.1% 21 -5% 0% 3.7% 7 19 -10% -5% 6
Slide 6: Inflation continues to be benign, but upside risks remain
Inflation continues to be benign, but upside risks from food prices, commodities and global factors remain … Urban vs Rural 7% CPI Inflation and components … %YoY Core_Rural Core_Urban 6% Core _Combined 9% Food+ (45.9%) Fuel+ (6.8%) 5% 8% Core (47.3%) 7% CPI Combined 4% 6% 5.56% 3% 5% 4.47% Sep-16 D
Slide 7: RBI continues to ease rates and easing is being transmitted by banks
In line with falling inflation, RBI continues to ease rates and the easing is being transmitted by banks Repo Rate vs Axis Bank Lending Rates 10.5% 10.15% 10.0% Axis Bank Average Base Rate 9.5% 9.00% • 200 bps rate cut by RBI since Jan’15 9.0% 9.35% • Bank responded with a reduction of 115 bps in th
Slide 8: Deposit growth aided by demonetization, while credit slowed
Deposit growth aided by demonetization, while credit slowed Banking system credit and deposit growth 19% YoY % Credit growth 16% Deposit growth 13% 10% 7% 4% Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 3.0 Industry Credit Growth (FYTD, ` Tn) 3.0 Services Credit Growth (FYTD ` Tn ) 2.4 Retail Credit Growth (F
Slide 9: Axis Bank Story
Axis Bank Story 9
Slide 10: Axis Bank Today
Axis Bank Today Retail franchise continues to show strong traction Strong market positioning in Payments space Continue to make investments in Digital and Analytics to build on strong position Focus remains on building a quality SME book Significant reduction in concentration risk in the Corporate s
Slide 11: The retail-ization of Axis Bank has been the bedrock of our financial performance
The retail-ization of Axis Bank has been the bedrock of our financial performance… All figures in ` billion Overall Deposits Overall Advances Overall Fee Income Bank CAGR 13% Bank CAGR 17% Bank CAGR 9% 4,144 3,731 79 3,580 3,388 75 3,224 2,811 68 2,809 2,301 60 2,526 1,970 55 Mar-13 Mar-14 Mar-15 Ma
Slide 12: We have grown retail advances faster than Industry
We have been able to grow retail advances faster than Industry by focusing on our core strengths Banking Industry Retail Advances Axis Bank Retail Advances 15% CAGR 27% CAGR ` ‘000 cr ` ‘000 cr 1,548 168 1,323 139 1,010 1,166 112 898 88 65 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-13 Mar-14 Mar-15 Mar-
Slide 13: Strong market position across Digital Payment Solutions
We have strong market position across Digital Payment Solutions Axis Bank Market Standing Across Products Product Credit Debit Mobile Point of Sale Forex Savings Cards1 Cards2 Banking3 Terminals Cards Accounts Market share 11% 7% 17% 16% 44% 4% 4th 4th 1st 2nd 1st 8th Ranking Source: RBI, Internal D
Slide 14: Our Cards Issuance business continues to grow
Our Cards Issuance business continues to grow and deepen the franchise Cards in Force – Market Share 11.2% 9.9% 8.2% 7.2% 5.6% Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Market Share grew 2X in last 4 years Cards Spends – Market Share 8.7% 8.0% 7.1% 5.8% 3.9% FY 13 FY 14 FY 15 FY 16 FY 17 Source: RBI Data R
Slide 15: We are ranked #1 in mobile spends market share
We are ranked #1 in mobile spends market share (in ` Crores) Market Share in Mobile Banking (by Value) Our Mobile Banking Spends and Volumes 29% YOY 33.2 33.1 31.3 31.4 Axis Bank Bank 17.1% 25.7 78% YOY ICICI Bank 17.1% HDFC Bank 16.3% State Bank of India 12.8% 41,501 36,745 37,536 29,760 23,279 Q2F
Slide 16: Freecharge helps us augment our digital capabilities
Freecharge helps us augment our digital capabilities and execution capacity More than 2x Customer Base Popular Digital-only Brand World Class Team with a start-up High Frequency Use-cases mind-set Digital Distribution 100% API based Technology Stack Through Freecharge, we intend to…. Leverage Paymen
Slide 17: SME - focus remains on building a quality book
SME - focus remains on building a quality book All figures in ` Crores SME Loan growth 87% of SME exposure* have rating of at least ‘SME3’ 14% 15% 10% 10% 7% 7% 6% 7% 6% 5% 14% 14% 14% 14% 15% 66% 66% 66% 64% 65% 52,718 49,172 47,918 45,857 43,208 8% 8% 9% 9% 8% 5% 5% 5% 6% 5% Sep-16 Dec-16 Mar-17 J
Slide 18: Corporate loan book is of much better quality with reduced concentration risk
Corporate loan book is now of much better quality with reduced concentration risk Incremental sanctions have been to better rated corporates Concentration Risk is reducing Percentage of sanctions rated A- & above Exposure to Top 20 single borrowers as a % of Tier I Capital 85% 85% 287% 81% 79% 79% 7
Slide 19: Corporate loan growth driven by Working Capital loans
Corporate loan growth driven by Working Capital loans All figures in ` Crores Trend in domestic and overseas corporate loan growth Working Capital loan growth has been strong 173,197 10% YOY 19% 158,029 45,148 36% YOY 33,308 10% 7% 6% 3% 128,049 3% YOY 124,721 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q2FY
Slide 20: Key Balance Sheet parameters continue to report healthy growth
Key Balance Sheet parameters continue to report healthy growth All figures represent YOY growth Savings Bank Deposits Current Account Deposits 37% 27% 30% 28% 22% 21% 20% 19% 16% 9% Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Advances Total Assets 18% 18% 16% 15% 13% 12% 11
Slide 21: Core Operating Profit engine continues to be steady
Core Operating Profit engine continues to be steady All figures in ` Crores Operating Profit and Core Operating Profit 4,500 4,640 4,375 4,291 4,000 4,100 8% YOY 3,947 3,500 3,777 3,565 3,467 3,400 3,000 3.10% 2.95% 3,115 3.01% 2.87% 2,500 5% YOY 2.39% 2,000 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Operat
Slide 22: Size of stressed asset pool has been reducing steadily
Size of stressed asset pool has been reducing steadily All figures in ` Crores BB and Below pool has reduced significantly in the last 6 quarters Watch List (WL) outstanding WL + Restructuring* dispensations Low Rated Corporate portfolio (BB and Below) 26,797 27,411 22,628 21,929 20,788 20,295 19,54
Slide 23: Long term trend in Credit Cost
Long term trend in Credit Cost Trend in Credit Cost : FY03 to H1FY18 We expect normalization by the second half of FY19 2.82% 2.56% 2.30% Credit Cost (excluding RBS impact) = 1.83% 1.35% 1.11% 0.99% 1.11% Long Term Average* = 94bps 0.61% 0.50% 0.70% 0.54% 0.61% 0.62% 0.61% 0.02% 0.21% FY03 FY04 FY05
Slide 24: Shareholder return metrics have seen moderation
Shareholder return metrics have seen moderation Return on Assets (in %) Return on Equity (in %) 1.83 18.23 18.57 1.78 1.72 17.49 0.65 7.22 6.82 0.57 FY14 FY15 FY16 FY17 H1 FY18* FY14 FY15 FY16 FY17 H1 FY18* Diluted EPS (`) Book Value Per Share (`) 233 234 34.93 223 30.85 188 26.45 163 15.34 14.42 FY
Slide 25: Subsidiaries' Performance
Subsidiaries’ Performance 25
Slide 26: Axis Finance: Has started contributing meaningfully
Axis Finance : Has started contributing meaningfully All figures in ` Crores Axis Finance has grown its overall book strongly… …driving over 7x growth in Income in 3 years 57% CAGR* 4,672 575 3,340 373 2,272 224 1,216 76 FY14 FY15 FY16 FY17 *3yr CAGR FY14 FY15 FY16 FY17 Growth in PAT has been steady
Slide 27: Axis Capital: Continues to maintain its leadership position
Axis Capital : Continues to maintain its leadership position All figures in ` Crores Equity League tables topper over the last decade Revenue from Operations * Number of deals 194 153 309 315 289 142 116 96 94 91 FY15 FY16 FY17 Source: Primedatabase (FY07 to FY17) Profit After Tax Major Highlights T
Slide 28: Axis Securities: Significant growth in customer additions
Axis Securities : Significant growth in customer additions Trend in customer base (in mn) Total Revenue All figures in ` Crores 46% CAGR* 1.38 756 1.00 562 455 585 0.68 314 432 0.44 331 252 124 130 171 62 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 * 3yr CAGR Non Broking Broking Healthy growth in profit
Slide 29: Axis AMC: Consistently gaining market share
Axis AMC : Consistently gaining market share ~4x jump in Average AUM in 3 years Gross Revenue All figures in ` Crores 52% CAGR* 48,829 531 381 33,163 23,483 206 13,939 88 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 * 3yr CAGR Growth in Profit has been strong Major Highlights The Income and PAT for H1FY1
Slide 30: Thank You
Thank You 30