Icici Bank Limited · NSE:ICICIBANK
Icici Bank — Debt Investor Presentation (June 2015)
38 slides from Icici Bank's debt investor presentation, June 2015
Slide 1: ICICI Group: Performance & Strategy
ICICI Group: Performance & Strategy June 2015
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 - demographics
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 - domestic demand
India: strong long term fundamentals Strong domestic demand Per Capita GDP (USD) 1,432 1,501 1,053 840 1,509 Rising per capita GDP accelerating 7 domestic demand 749 2005 2013 Healthy private consumption driven by favourable demographics and rising income levels 6
Slide 7: India: strong long term fundamentals - savings & investment
India: strong long term fundamentals Healthy savings & investment rate Investment rate ~32% ~25% Savings & investment rates continue to be in excess of 30% FY2003 FY2014 7
Slide 8: 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 9: Banking sector framework - regulation
Banking sector framework Conservative regulatory framework Average capital adequacy for the system Capital adequacy ~13% Implementation of Basel III in FY2014 Capital requirements 1% higher as compared to BCBS Asset From April 1, 2015 loan restructurings will lead classification to the asset
Slide 10: ICICI Bank: an overview
a ICICI Bank ICIC] Bank: an overview
Slide 11: ICICI Bank
ICICI Bank Largest private sector bank in India in terms of total assets Tier I capital adequacy of 12.78% at March 31, 2015 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 Moody
Slide 12: ICICI Bank: focus & objectives
ICICI Bank: focus & objectives 12
Slide 13: Focus & objectives
Focus & objectives Robust funding profile Balance sheet Diversified loan mix with increasing strength share of retail Profitability Granular & stable income streams improvement Efficiency of operations Achieved sustained improvement in return ratios 13
Slide 14: Focus & objectives: improvement in return on equity
Focus & objectives Robust funding profile Balance sheet Diversified loan mix with increasing strength share of retail Leverage capital for growth Granular & stable income streams Profitability Efficiency of operations improvement Normalisation of credit costs Focus on improvement in retu
Slide 15: Performance over the years: healthy balance sheet growth
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 Mar 2015 Diversified loan mix ~ 16% CAGR in domestic loans since Mar 2011 ~20% CAGR in
Slide 16: Performance over the years: strong core operating performance
Performance over the years Strong core operating performance Granular revenue streams Margin improvement driven by focus across businesses Domestic margins improved by ~100 bps since FY2010 Overseas margins improved from 0.41% in FY2010 to 1.65% in FY2015 Improvement in operating efficiency Co
Slide 17: Performance over the years: sustained improvement in return ratios
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 15.0% in FY2015 Driven by focused execution of articulated strategy 17
Slide 18: FY2015: performance review
FY2015: performance review Operating performance remained robust; healthy funding profile and strong retail portfolio growth maintained NII grew by 16% NIM improved by 15 bps to 3.48% Retail fee growth remained healthy Non-interest income ~20% growth in dividend income grew by 17% Operating ef
Slide 19: FY2015: slippages from restructured loans
FY2015: performance review Slippages from restructured loans increased given prolonged economic weakness & slow recovery ` billion FY2014 FY2015 Gross NPA additions 45.40 80.78 Less: slippages from restructured loans 7.27 45.29 New NPA formation 38.13 35.49 Restructuring additions 66.33 53.94 New NP
Slide 20: FY2015: RoA and RoE
FY2015: performance review Standalone RoA improved by 10 bps to 1.86% despite higher credit costs Consolidated RoE at 15.0% 20
Slide 21: Looking ahead
a ICICI Bank Looking ahead
Slide 22: Operating environment
Operating environment Renewed optimism regarding India’s growth prospects Signs of improvement in economic indicators However, positive trends Inflation eased from RBI initiated policy rate in private sector cash 8.5% in April 2014 to reduction; Repo rate flows & investments yet 5.2% in March
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: strong franchise
Our positioning & strengths Strong franchise across business segments Strong and growing retail franchise Well established corporate franchise along with overseas presence Sustained Sustained Improved market Strong franchises private private position capitalising on sector sector favourabl
Slide 26: Our positioning & strengths: geographical presence
Our positioning & strengths Extensive geographical presence ~52% of branches in semi- urban and rural areas Supplemented by ~12,450 ATMs 26
Slide 27: Leadership in technology: customer experience
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 27
Slide 28: Leadership in technology: payments
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 28
Slide 29: Strong capital position
Our positioning & strengths Strong capital position Standalone capital 17.02% 12.78% Consolidated Basel III total capital CAR adequacy ratio at 17.20%, Tier 1 ratio Tier I at 12.88% at March 31, 2015 March 31, 2015 29
Slide 30: Key priorities going forward: funding profile
Key priorities going forward Sustain strong funding profile Focus on leveraging investments made so far Expanded branch network Significant investments made in technology Focus on sustaining average CASA ratio in 38-40% range 30
Slide 31: Key priorities going forward: domestic loan growth
Key priorities going forward Sustain domestic loan growth of 3-4% higher than banking system Continue focus on diversification & granularity 31
Slide 32: Key priorities going forward: retail assets
Key priorities going forward Retail assets: segment wise priorities Home loans • Sustain momentum while maintaining healthy mix Vehicle •Auto: Focus on improving profitability loans •CV: Recovery in economic activity to provide push Business • Focus on scaling up growth; closely linked to banking cu
Slide 33: Key priorities going forward: rural & semi-urban markets
Key priorities going forward Focus on rural & semi-urban markets 2,106 branches Approach to Network lending ~20 mn basic banking Branches a/cs Selective geographical approach Gramin Branches Diverse product suite Collateral based BCs & CSPs ~15% of retail loans lending Partner linkages ~35% y-o-y gr
Slide 34: Key priorities going forward: corporate & SME lending
Key priorities going forward Corporate & SME lending: selective approach to credit growth Focus on granular lending Increase lending to high rated clients Continued close monitoring and proactive action 34
Slide 35: Key priorities going forward: international business
Key priorities going 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 & MNC
Slide 36: 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 37: In summary: key priorities
In summary: key priorities Continue to expand retail franchise Targeting Maintain technology leadership higher consolidated Sustain operating efficiency RoE Selectively grow corporate portfolio with focus on granularity & higher rated clients Improve capital efficiency Focus on profitability of subs
Slide 38: Thank you
a ICICI Bank Thank you aes