Icici Bank Limited · NSE:ICICIBANK
Icici Bank — Debt Investor Presentation (November 2015)
43 slides from Icici Bank's debt investor presentation, November 2015
Slide 1: ICICI Group: Performance & Strategy
ICICI Group: Performance & Strategy November 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
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
India: strong long term fundamentals Healthy savings & investment rate Per Capita GDP (USD)1 Investment rate2 1,432 1,501 ~30%1,501 1,432 1,053 ~25% 1,053 1,608 840 840 749 2005 2014 FY2003 FY2015 Domestic consumption and investments driven by favourable demographics and rising income levels 1. Sour
Slide 7: 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 8: Banking sector framework
Banking sector framework Conservative regulatory framework Average capital adequacy for the system Capital adequacy ~13%1 Implementation of Basel III in FY2014 Capital requirements 1% higher as compared to BCBS Asset From April 1, 2015 loan restructurings lead to classification the asset bei
Slide 9: ICICI Bank: an overview
a ICICI Bank ICIC] Bank: an overview
Slide 10: ICICI Bank
ICICI Bank Largest private sector bank in India in terms of total assets1 Tier I capital adequacy of 12.84% at September 30, 20152 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
Slide 11: ICICI Bank: focus & objectives
ICICI Bank: focus & objectives 11
Slide 12: 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 12
Slide 13: Focus on 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 14: 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 ~77% at Sep 2015 Diversified loan mix ~ 16% CAGR in domestic loans since Mar 2011 ~21% CAGR in
Slide 15: 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 ~90 bps since FY2010 Overseas margins improved from 0.41% in FY2010 to 1.65% in FY2015 and 1.94% in H1-2016 Improvement in ope
Slide 16: Performance over the years: 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 15.2% in H1-2016 Driven by focused execution of articulated strategy 16
Slide 17: Q2-2016: performance review
Q2-2016: performance review Operating performance remained robust; healthy funding profile and strong retail portfolio growth maintained NIM improved by 10 bps y-o-y to NII grew by 13% 3.52% Retail fee growth remained healthy Y-o-Y growth in fee income improved Continued dividend from subsidia
Slide 18: Q2-2016: asset quality trends
Q2-2016: performance review Asset quality trends ` billion FY2014 FY2015 H1-2016 Gross NPA additions 45.40 80.78 38.58 Of which: slippages from 7.27 45.29 12.15 restructured loans Restructuring additions 66.33 53.94 20.89 Credit costs to average loans (annualised) at 96 basis points in H1-2016 compa
Slide 19: Q2-2016: performance review
Q2-2016: performance review Standalone RoA at 1.89% Consolidated RoE improved from 15.0% in Q1-2016 to 15.3% in Q2-2016 19
Slide 20: Looking ahead
a ICICI Bank Looking ahead
Slide 21: Operating environment
Operating environment Renewed optimism regarding India’s growth prospects Signs of improvement in economic indicators Repo rate However, positive trends CPI inflation at 5.0% in RBI cut repo rate by in private sector cash October 2015; core 125 bps between flows & investments yet CPI1 inflatio
Slide 22: 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 23: ICICI Group
ICICI Group Savings Protection Investments Capital Credit Flows Spanning the spectrum of financial services 23
Slide 24: Our positioning & strengths
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 25: Our positioning & strengths: distribution
Our positioning & strengths Significant investments made in distribution Branch network ~52% of branches in semi- urban and rural areas Supplemented by ~13,000 ATMs Focus on cross-sell along with customer service at branches 25
Slide 26: Our positioning & strengths: leadership in technology
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 26
Slide 27: Our positioning & strengths: 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 27
Slide 28: Our positioning & strengths: strong capital position
Our positioning & strengths Strong capital position Standalone capital 16.90% 12.84% Consolidated Basel III total capital CAR adequacy ratio at 16.87%, Tier 1 ratio Tier I at 12.77% at September 30, 20151 September 30, 20151 1. Basel III capital ratios include profits for H1-2016 28
Slide 29: Key priorities going forward
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 29
Slide 30: Key priorities going forward
Key priorities going forward Sustain domestic loan growth of 3-4% higher than banking system Continue focus on diversification & granularity 30
Slide 31: Retail assets: segment wise priorities
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 32: Focus on rural & semi-urban markets
Key priorities going forward Focus on rural & semi-urban markets 2,108 branches Approach to Network lending Branches Diverse product suite Selective geographical approach Gramin Branches ~14% of retail loans Collateral based BCs & CSPs lending ~30% y-o-y growth in Partner linkages Granular portfolio
Slide 33: Corporate & SME lending: selective approach
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 33
Slide 34: International business: focus on profitability and returns
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 35: 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 36: In summary: key priorities
In summary: key priorities Continue to expand retail & rural franchise Targeting 17- Maintain technology leadership 18% consolidated Sustain operating efficiency RoE Selectively grow corporate portfolio Leverage strong capital position & improve efficiency Focus on profitability of subsidiaries & re
Slide 37: Thank you
a ICICI Bank Thank you ee
Slide 38: Profit & loss statement
Profit & loss statement ` billion H1-o-H1 FY2014 FY2015 H1-2015 H1-2016 growth NII 164.75 190.40 91.49 103.66 13.3% Non-interest income 104.28 121.76 55.88 59.97 7.3% - Fee income 77.58 82.87 40.39 43.45 7.6% - Other income1 16.53 21.96 10.24 12.23 19.4% - Treasury income 10.17 16.93 5.25 4.29 (18.3
Slide 39: Profit & loss statement
Profit & loss statement ` billion H1-o-H1 FY2014 FY2015 H1-2015 H1-2016 growth Operating profit 165.94 197.20 92.15 101.96 10.6% Provisions 26.26 39.00 15.76 18.98 20.4% Profit before tax 139.68 158.20 76.39 82.98 8.6% Tax 41.58 46.45 22.75 22.92 0.7% Profit after tax 98.10 111.75 53.64 60.06 12.0%
Slide 40: Balance sheet: Assets
Balance sheet: Assets ` billion March March September September Y-o-Y 31, 2014 31, 2015 30, 2014 30, 2015 growth Cash & bank balances 415.30 423.05 473.78 315.45 (33.4)% Investments 1,770.22 1,865.80 1,495.02 1,541.90 3.1% - SLR investments 951.65 1,056.02 997.25 1,115.40 11.8% - Equity investment i
Slide 41: Balance sheet: Liabilities
Balance sheet: Liabilities ` billion March March September September Y-o-Y 31, 2014 31, 2015 30, 2014 30, 2015 growth Net worth 732.14 804.29 788.77 865.66 9.7% - Equity capital 11.55 11.60 11.57 11.62 0.4% - Reserves 720.59 792.70 777.20 854.04 9.9% Deposits 3,319.14 3,615.63 3,520.55 3,846.18 9.2%
Slide 42: Yield, cost & margin
Yield, cost & margin Movement in yield, costs & FY2014 FY2015 H1-2016 margins (Percent)1 Yield on total interest-earning assets 8.92 8.96 8.82 - Yield on advances 10.00 9.95 9.68 Cost of funds 6.21 6.17 5.98 - Cost of deposits 6.11 6.18 6.00 Net interest margin 3.33 3.48 3.53 - Domestic 3.68 3.89 3.
Slide 43: Other key ratios
Other key ratios Movement in yield, costs & FY2014 FY2015 H1-2016 margins (Percent)1 Return on average networth1 13.7 14.3 14.4 Return on average assets1 1.76 1.86 1.90 Weighted average EPS1,2 17.0 19.3 20.7 Book value (`)2 127 139 149 Fee to income 28.9 26.5 26.6 Cost to income 38.2 36.8 37.7 Avera
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