Idfc First Bank Ltd. · NSE:IDFCFIRSTB
Idfc First Bank — Q3 FY19 Earnings Presentation
43 slides from Idfc First Bank's earnings presentation, Feb 5, 2019
Slide 1: Investor Presentation on Q3FY19 - Exchange filing cover letter
~ IDFC FIRST EJ Bank IDFCFIRSTBANK/SD/SE/147/2018-19 February OS, 2019 The Manager-Listing Department The Manager-Listing Department National Stock Exchange of India Limited BSE Limited Exchange Plaza, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Bandra (East) Dalal Street, Fort, Mumbai- 400 051
Slide 2: Q3 FY19 Corporate Presentation
Q3 FY19 CORPORATE PRESENTATION
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: Table of Contents
4 SECTION 1: BACKGROUND OF MERGER 13 SECTION 2: PATH AHEAD 20 SECTION 3: PERFORMANCE HIGHLIGHTS Table SECTION 4: DISTRIBUTION of 23 Contents SECTION 5: ASSETS 25 31 SECTION 6: LIABILITIES 34 SECTION 7: FINANCIALS 37 SECTION 8: DIRCETORS & SHAREHOLDERS
Slide 5: Section 1: Background to the Merger
SECTION 1: BACKGROUND TO THE MERGER
Slide 6: The Founding of IDFC First Bank
The Founding of IDFC First Bank SECTION 1: BACKGROUND IDFC First Bank Ltd is founded by the merger of IDFC Bank, a scheduled commercial bank and Capital First Limited, a systematically important Non-Banking Financial Services Company. The merger was first announced on January 13, 2018, and formally
Slide 7: Background of IDFC Bank
Background of IDFC Bank SECTION 1: BACKGROUND IDFC Bank Limited was formed as a part of demerger from its parent IDFC Limited on October 21, 2014. 1997-2014 • IDFC Limited, was set up in 1997 as a public private platform to finance infrastructure focusing primarily on project finance and mobilizatio
Slide 8: Rationale for the merger (IDFC Bank Perspective)
Rationale for the merger SECTION 1: BACKGROUND (IDFC Bank Perspective) • After the inception in 2015, the Bank created a robust framework and created all the necessary building blocks which are required for growing a large banking operation. • The developed a strong and robust risk management system
Slide 9: IDFC Bank – Financial Parameters
IDFC Bank – Financial Parameters SECTION 1: BACKGROUND Networth (Rs Cr) CASA Deposits (Rs Cr) Loan Assets (Rs Cr) 15,257 6,426 75,337 5,710 73,055 14,776 70,248 13% 14,678 11% 4% 53,903 1% 72% 70% 69% 13,633 2,094 90% 20% 15% 445 26% 9% Mar-16 Mar-17 Mar-18 Sep-18 Mar-16 Mar-17 Mar-18 Sep-18 Mar-16
Slide 10: Background of Capital First
Background of Capital First SECTION 1: BACKGROUND 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) of the Company with equity backing of Rs. 810 Crore from Warburg Pincus, and
Slide 11: Capital First – Financial Parameters
Capital First – Financial Parameters SECTION 1: BACKGROUND Assets Under Management (Rs Cr) Net Worth (Rs Cr) NIM (%) 32,622 Retail 2,928 26,997 9.60% Wholesale 2,618 9.02% 2,304 7.63% 8.01%* 19,824 6.57% 16,041 1,704 91% 1,574 5.35% 4.86% 11,975 94% 1,172 9,679 961 7,510 93% 86% 81% 84% 74% 26% 19%
Slide 12: Rationale for the merger (Capital First Perspective)
Rationale for the merger SECTION 1: BACKGROUND (Capital First Perspective) • Since 2010, Capital First created a strong retail franchisee in niche areas with strong asset quality with the help of strong analytics and technology led underwriting framework. • In 2010, the GNPA and NNPA of the Company
Slide 13: Pro-Forma Financials of the two institutions
Pro-Forma Financials of the two institutions the last SECTION 1: BACKGROUND quarter (Q2 FY 19 )before the merger. CAPITAL FIRST IDFC BANK IDFC FIRST BANK LIMITED LIMITED LIMITED Loan Asset (on-Book) Rs. 27,351 Cr Rs. 75,337 Rs. 102,688 % of Retail Loan Assets 89% 13% 33% Total Borrowing + Deposits R
Slide 14: Section 2: Path Ahead
SECTION 2: PATH AHEAD
Slide 15: Disclaimer
SECTION 2: PATH AHEAD Disclaimer Certain statements contained in this presentation that are not statements of historical fact constitute “forward- looking statements.” You can generally identify forward-looking statements by terminology such as “aim”, “anticipate”, “believe”, “continue”, “could”, “e
Slide 16: IDFC FIRST BANK - Path Ahead
SECTION 2: PATH AHEAD IDFC FIRST BANK - Path Ahead • Strong Systems and Processes • Strong Retail Franchise and in niche • Strong Loan assets of more than Rs. segments with strong credit skills ~104000 Cr • Over 200 bank branches • Presence in more than 220 locations • 34% of loans in retail segment
Slide 17: Asset Strategy
SECTION 2: PATH AHEAD 1 Asset Strategy • Growth of Assets: • The Bank plans to grow the retail asset book from Rs. 36,236 Cr to over Rs. 100,000 Cr in the next 5-6 years • The Bank plans to reduce the loans to infrastructure segments ( Rs. 22,710 as of 31 December 2018) as they mature. • For the Non
Slide 18: Liability Strategy
SECTION 2: PATH AHEAD 2 Liability Strategy • CASA Growth: • The key focus of the Bank would be to increase the CASA Ratio from 10.3% (Q3 FY 19) on a continuous basis year on year and strive to reach 30% CASA ratio with in the next 5-6 years, as well as set a trajectory to reach a CASA ratio of 40-50
Slide 19: Profitability
SECTION 2: PATH AHEAD 3 Profitability • Net Interest Margin: As the retail asset contribution moves towards 70% of the total fund assets, it is planned that the gross yield will continuously increase. Coupled with lower cost of funds (From improved CASA ratio), it is planned to expand NIM to about 5
Slide 20: Summary
SECTION 2: PATH AHEAD Summary As a result of the strategic directions mentioned earlier, the Bank plans to reach the following goals in the next 5-6 years of operation - Funded Assets To reach Rs. 1,80,000 Cr % Retail Funded To reach 70% of the total funded assets Assets Net Interest To reach ~5.5%
Slide 21: Section 3: Performance Highlights
SECTION 3: PERFORMANCE HIGHLIGHTS
Slide 22: Snapshot of Key Parameters
Snapshot of Key Parameters SECTION 3: PERFORMANCE HIGHLIGHTS (As of 31 December 2018) Rs. 1,04,660 Cr 34.62% Rs. 130,529 Cr 10.37%, 4.92% Funded Assets Retail Assets/Total Borrowing & Deposits CASA Ratio Funded Assets (as % of Total Deposit, as % of Total Borrowing & Deposits) Rs. 18,376 Cr 1.97%, 0
Slide 23: Snapshot of Financial Performance for the Quarter
Snapshot of Financial Performance for the Quarter SECTION 3: PERFORMANCE HIGHLIGHTS (For Q3-FY19) • The Net Interest Income for the quarter ended on 31 December 2018 was Rs. 1,145 Cr • The Total Operating Income (net of Interest Cost) for the quarter ended on 31 December 2018 was Rs. 1,449 Cr. • The
Slide 24: Section 4: Distribution
SECTION 4: DISTRIBUTION
Slide 25: The Bank has been continuously expanding its reach
SECTION 4: DISTRIBUTION The Bank has been continuously expanding its reach 203 206 170 150 140 127 129 99 85 61 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Bank Branches ATMs 30 530 102 354 100 STATES & UTs Districts CFL Branches IBL Branches BC Branches 24
Slide 26: Section 5: Assets
SECTION 5: ASSETS
Slide 27: Gross Loan Assets breakdown
SECTION 5: ASSETS Gross Loan Assets breakdown Funded Assets (In INR Cr) Dec-17 Mar-18 Jun-18 Sep-18 Dec-18* Retail Funded Assets 5,376 7,043 8,211 9,918 36,236 Rural 2,652 3,218 3,616 4,243 4,704 SME 1,173 1,794 2,151 2,772 13,574 Consumer 1,551 2,031 2,444 2,903 17,957 Wholesale Funded Assets 51,34
Slide 28: Retail Assets as a % of total Funded Assets has improved
Retail Assets as a % of the total Funded Assets has improved SECTION 5: ASSETS substantially from 13% to 35% post the merger.. 1,04,660* 35% 73,052 75,190 75,337 69,065 10% 11% 13% 8% 74% 74% 74% 72% 54% 5% 4% 4% 4% 3% 13% 12% 11% 11% 8% Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Retail Funded Assets Wholes
Slide 29: Spreads have increased from 1.7% to 3.6% post the merger
Spreads have increased from 1.7% to 3.6% post the merger SECTION 5: ASSETS Spreads - Consolidated Q3 FY18 Q2 FY19 Q3 FY19 Yields 9.3% 9.4% 11.5% Retail 16.9% 15.7% 16.6% Wholesale Bank 9.7% 9.2% 9.5% Corporate Banking 8.9% 9.0% 9.5% Infrastructure 10.2% 9.4% 9.6% PSL Buyout 6.9% 6.5% 6.4% Stressed A
Slide 30: Stressed Assets
SECTION 5: ASSETS Stressed Assets In INR Cr Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Stressed Assets 5,316 3,884 3,836 3,120 3,826 NPL 2,777 1,779 1,774 895 1,671 Others Loans 1,342 927 918 856 787 Stressed Equity 1,197 1,178 1,144 1,149 1,149 Stressed SRs (NPI) - - - 220 219 Provisions 3,399 2,717 2,726
Slide 31: Investments
SECTION 5: ASSETS Investments In INR Cr Dec-17 Mar-18 Jun-18 Sep-18 Dec-18* CRR 2,798 3,124 3,089 3,081 3,510 SLR 15,243 16,334 16,483 16,806 17,946 LCR / Others 1,828 1,941 2,998 3,165 6,213 Bonds (Non - Repoable) 5,866 5,438 4,020 3,569 3,203 Certificate of Deposit - 249 - - - Commercial Paper 638
Slide 32: Section 6: Liabilities
SECTION 6: LIABILITIES
Slide 33: Borrowings and Deposits
SECTION 6: LIABILITY Borrowings and Deposits In INR Cr Dec-17 Mar-18 Jun-18 Sep-18 Dec-18* Borrowings 36,373 36,483 34,671 37,844 57,403 Others Short Term CASA Legacy Long Term Bonds 23,636 21,405 18,909 18,632 16,385 12% 5% Term Deposits Infra Bonds 10,434 10,434 10,434 10,434 10,434 25% Other Borr
Slide 34: CASA and Retail Deposits
SECTION 6: LIABILITY CASA and Retail Deposits 14,025 12,879 11,053 9,817 7,605 6,453 7,991 4,970 4,107 3,737 3,092 3,112 4,398 3,533 1,859 2,971 3,334 2,395 2,177 2,022 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Current Accounts Saving Accounts Retail Term Deposits All figures are in INR Crores unless speci
Slide 35: Section 7: Financial Statements
SECTION 7: FINANCIAL STATEMENTS
Slide 36: Income Statement
SECTION 7: FINANCIAL STATEMENTS Income Statement In INR Cr Q3 FY18 9M FY18 Q2 FY19 Q3 FY19* 9M FY19* Interest Income 2,284 6,649 2,334 3,664 8,319 Interest Expenses 1,789 5,304 1,883 2,519 6,233 Net Interest Income 495 1,345 451 1,145 2,086 Fee & Other Income 119 343 118 301 522 Trading Gains 112 68
Slide 37: Balance Sheet
SECTION 7: FINANCIAL STATEMENTS Balance Sheet In INR Cr Dec-17 Sep-18 Dec-18* Shareholders' Funds 15,208 14,776 18,376 Deposits 42,259 48,356 61,914 Borrowings 54,506 52,875 68,614 Other liabilities and provisions 6,226 7,248 8,012 Total Liabilities 1,18,199 1,23,255 1,56,916 Cash and Bank Balances
Slide 38: Section 8: Directors & Shareholders
SECTION 8: DIRECTORS & SHAREHOLDERS
Slide 39: Board of Directors
SECTION 8: BOARD & SHAREHOLDERS Board of Directors DR. RAJIV B. LALL - PART-TIME NON-EXECUTIVE CHAIRMAN Dr. Rajiv Lall is the Non-Executive Chairman of IDFC Bank. He was the Founder MD & CEO of IDFC Bank from October 1, 2015 till December 18, 2018. Previously, he was the Executive Chairman of IDFC L
Slide 40: Board of Directors
SECTION 8: BOARD & SHAREHOLDERS Board of Directors MR. ANAND SINHA - INDEPENDENT DIRECTOR Mr. Anand Sinha joined the Reserve Bank of India in July 1976 and rose to become Deputy Governor in January 2011. He was Adviser in RBI up to April 2014 after demitting the office of Deputy Governor in RBI on 1
Slide 41: Board of Directors
SECTION 8: BOARD & SHAREHOLDERS Board of Directors MR. PRAVIR VOHRA - INDEPENDENT DIRECTOR Mr. Pravir Vohra is a postgraduate in Economics from St. Stephen's College, University of Delhi and a Certified Associate of the Indian Institute of Bankers. He began his career in banking with State Bank of I
Slide 42: Current Shareholding Pattern (post listing of new shares)
SECTION 8: BOARD & SHAREHOLDERS Current Shareholding Pattern (post listing of new shares) Following the successful completion of the merger, on 16th January 2019, shares of Capital Key shareholders % Holding First Limited are converted to IDFC Bank shares and listed on NSE and BSE. The scrip IDFC (t
Slide 43: Thank You
THANK YOU IDFC FIRST Bank