Indusind Bank Ltd. · NSE:INDUSINDBK
Indusind Bank — Investor Day (November 2022)
41 slides from Indusind Bank's investor day presentation, Nov 22, 2022
Slide 1: Investor Day
– Investor Day 22nd November 2022 1
Slide 2: IndusInd Bank – Investor Day: Bank's Strategy
IndusInd Bank – Investor Day Presentation-1 Bank’s Strategy
Slide 3: Presentation Path
Presentation Path 1 Backdrop of the Bank’s Strategy 2 Building Blocks in Place 3 Focused on Sustainable Growth
Slide 4: Evolving Operating Environment and Bank's Response / Performance
Evolving Operating Environment and Bank’s Response / Performance Macro Developments Bank’s Performance LCR of 125% | Surplus Liquidity of ~47,000cr | Tightening Liquidity Credit Deposit Ratio of 82% Deposit Growth of 15% | Retail Deposit Growth Competition for Deposits of 16% Loan Growth of 18% | Re
Slide 5: Backdrop of the Bank's Strategy
1 Backdrop of the Bank’s Strategy 2 Building Blocks in Place 3 Focused on Sustainable Growth
Slide 6: Management Beliefs Driving Our Strategy
1 Management Beliefs Driving Our Strategy Business Approach towards Technology Governance Philosophy Customers • Universal Banking Approach • Branch and Digital to Co-exist • Infrastructure to Support • Quality of Earning More and Complement Each Other Scale, Security and Reliability Important than
Slide 7: IndusInd Bank: A Differentiated Franchise
2 IndusInd Bank: A Differentiated Franchise Diversified Robust Strong Loan Book with Domain Liability / Funding Franchise Product Groups Expertise in Livelihood Loans Disproportionately Large Customer Centric Experienced Distribution Network with Future Ready Digital 2.0 Management Team Deep Rural P
Slide 8: Our Core Executive Team Refreshed with Smooth Succession
3 Our Core Executive Team Refreshed with Smooth Succession Mr. Sumant Kathpalia Managing Director & CEO Mr. Arun Khurana Mr. Sanjeev Anand Head - Corporate, Commercial, Mr. Bijayananda Pattanayak Mr. A. G. Sriram Deputy CEO Head - Gems & Jewellery Head – Consumer Finance Rural & Inclusive Banking Mr
Slide 9: The Bank has Delivered Scale with Profitability over the Years
4 FY08 FY08 180 12,795 FY09 FY09 FY10 FY10 FY11 FY11 FY12 FY12 FY13 FY13 FY14 FY14 FY15 FY15 23% CAGR FY16 FY16 FY17 Branches (#) FY17 Loan Book (Rs.cr) FY18 FY18 FY19 FY19 FY20 FY20 FY21 FY21 FY22 FY22 H1 FY23 H1 FY23 2,320 2,60,129 9 FY08 FY08 2,869 19,037 FY09 FY09 FY10 FY10 FY11 FY11 FY12 FY12 F
Slide 10: The Bank Faced a Few Internal and External Challenges
5 The Bank, however, Faced a Few Internal and External Challenges in Last Couple of Years Concerns on potential Corporate slippages and Profit After Tax (Rs.cr) 4,805 chunky exposures 3,436 Government Deposit Outflows 75 H1 FY23 FY15 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY16 FY17 FY18 FY19 FY20 FY21 F
Slide 11: The Bank Responded with Recalibration of Strategy Towards 'Scale with Sustainability'
6 The Bank Responded with Recalibration of Strategy Towards ‘Scale with Sustainability’ Planning Cycle 5 (2020–23) Strategy Scale with Sustainability Broad Themes Leapfrog Digital Banking Fortifying Liabilities Scaling up Domains of Expertise Investing in New Growth Engines Conservative & Robust Pra
Slide 12: With Strategic Priorities as
7 With Strategic Priorities as 1. Retail Liabilities Surge 5. 2. New Fine-tuning Growth Underpinned by Corporate Bank Boosters 6. Approach Digitization & 7. Sustainability 3. 4. Holistic Scaling up Rural Domains Banking 12
Slide 13: And Well Defined Sustainability Metrics
8 And Well Defined Sustainability Metrics Credit to Deposit Ratio <95% Lower Non-Funded to Certificates of Deposits Funded Ratio 5%-10% PCR Retail LCR Deposits >65% 45%-50% Unsecured Retail <5% 13
Slide 14: Planning Cycle (2020–23) Targets
Resulting in Planning Cycle 5 (2020–23) Loan Growth 15% - 18%* CASA Ratio > 40% Resulting in Revenue Growth Exceed Balance Sheet Growth PPOP / Loans > 5% Branch Network 2,500 Customer Base Double to >45mn * For FY22-FY23 14
Slide 15: Building Blocks in Place
1 Backdrop of the Bank’s Strategy 2 Building Blocks in Place 3 Focused on Sustainable Growth
Slide 16: Laying Foundation for Growth
Laying Foundation for Growth 1 Fortified Liability Franchise with Strong Liquidity Buffers in Place 2 Fine-tuned Corporate Bank Approach 3 Domains Outperformed Industry 4 Maintained Healthy Operating Margins & Improved Stressed Coverage 5 Continued Investment in Growth Boosters 6 Strengthened Leader
Slide 17: Fortified Liability Franchise with Focus on Retailisation of Deposits
1a Fortified Liability Franchise with Focus on Retailisation of Deposits Robust Deposit Growth Driven by Retail & CASA Ramped up Client Acquisition Continue Investment in Distribution Network ~81% of incremental deposits from retail & CASA (Rs.cr) NTB CASA & Retail TD Acquisition (#) Narrowing Diffe
Slide 18: Strong Liquidity Buffers with Diverse Sources of Funding
1b Strong Liquidity Buffers with Diverse Sources of Funding Healthy Liquidity Coverage Ratio (%) With Buffers in Place Credit / Deposit Ratio (%) Average Surplus Liquidity (Rs.’000cr) 145% 112% 126% 125% 51 42 47 102% 83% 81% 82% Q4FY20 Q4FY21 Q4FY22 Q2FY23 Q4FY21 Q4FY22 Q2FY23 Mar-20 Mar-21 Mar-22
Slide 19: Fine Tuned Corporate Bank Franchise with Focus on Granular Low Risk Portfolio
2 Fine Tuned Corporate Bank Franchise with Focus on Building Granular Low Risk Portfolio 1 Loan book orientation towards higher Corporate Book: No New Surprises Corporate Slippages – Trailing 4 Quarters rated granular portfolio Standard book slippages (exc. restructured) Gross slippages 5.1% 2 Portf
Slide 20: Domains Outperformed Industry Amidst Macro Challenges
3 Domains Outperformed Industry Amidst Macro Challenges Vehicle Finance Micro Finance Gems & Jewellery 60 DPD (%) 100 100 100 100 100 86 82 100 100 100 76 • No Restructuring • No NPA 52 • No SMA1 & SMA2 28 29 35 12 CV CE PV Tractor TW 30 DPD (%) 60 DPD (%) 90DPD (%) Industry IBL Industry IBL Indexed
Slide 21: Maintained Healthy Operating Margins & Improved Stressed Coverage
4 Maintained Healthy Operating Margins & Improved Stressed Coverage Stable NIMs Granular Fee Mix Range-bound Cost to Income Ratio 15% 8% 4% 1% 1% Investment Banking 23% 21% 21% 19% 42.9% 42.6% 43.9% 4.25% 4.20% 4.24% Other 27% 41.1% 4.13% Corporate 52% 57% 64% 71% Retail 49% 9% 21% 16% 14% Trading 7
Slide 22: Continue Investment in New Initiatives to Boost Growth
5 Continue Investment in New Initiatives to Boost Growth Holistic Rural Banking Affluent Banking NRI Banking Rural Focused Loans Net Relationship Value (Rs.cr) Deposits (Rs.cr) Tractor KCC BFIL Agri Business Group 31 % 17 % 15 % CAGR CAGR 59,935 63,287 26,801 28,358 CAGR 25,706 50,903 19,506 32,076
Slide 23: Strengthened Leadership and Talent Base
6 Strengthened Leadership and Talent Base Continue to Strengthen Human Capital Organisation Structure Audit Committee of Board (ACB) 1 Smooth succession planning across leadership positions MD & CEO Deputy CEO 2 Reorganised Corporate Banking Unit with Lateral Hiring and Internal Reallocations • Prod
Slide 24: Reinforced Risk Management Framework
7 Reinforced Risk Management Framework Incorporating Past Learnings & Evolving Macro Environment 1 Reduced corporate exposure Concentration; Increased focus on granular high rated working capital loans 2 Conservative Capping of Sensitive Sector Exposures; Tightened overall Concentration Exposure nor
Slide 25: IT Strategic Priorities Aligned to Bank's Strategic Objectives
8a IT Strategic Priorities Aligned to Bank’s Strategic Objectives Building Highly Scalable and Performance oriented Customer Experience is at Centerpiece of our environment initiatives • Enhancing Core Banking System Architecture • Future ready enterprise solution CRM NEXT • End-to-end paperless, pr
Slide 26: Multiple HR Initiatives for Enhanced Employee Experience & Engagement
8b Multiple HR Initiatives for Enhanced Employee Experience & Engagement Curated and Rolled out HR Mobile App: One Multiple Activities and Gamified Learning AI based Chat Bot with Stop Solution for all Programs for Women Modules 24x7 Support Employee needs Employees under ELEVAT 26
Slide 27: Overall, We have moved towards Improving Sustainability of Organisation
Overall, We have moved towards Improving Sustainability of Organisation FY20: 102% FY21: 83% FY22: 81% H1FY23: 82% Credit to Deposit Ratio <95% FY20: 3.15x Certificates of FY20: 16% FY21: 2.34x Lower Non-Funded Deposits FY21: 3% FY22: 2.30x to Funded Ratio FY22: 3% H1FY23: 2.85x 5%-10% H1FY23: 3% CR
Slide 28: Focused on Sustainable Growth
1 Backdrop of the Bank’s Strategy 2 Building Blocks in Place 3 Focused on Sustainable Growth
Slide 29: Themes for the Coming Years: Growth with Sustainability
Themes for the Coming Years: Growth with Sustainability 1 Loan growth acceleration 6 2 Deposit Sustainable mobilization Banking to continue apace Becoming Leapfrogging Employer of Digital 2.0 Choice 5 New Growth 3 Boosters 4 29
Slide 30: Acceleration in Loan Growth Led by Areas of Domain Expertise
1 Acceleration in Loan Growth Led by Areas of Domain Expertise Steadily Pivoting towards Loan Growth All Businesses are Poised for Loan Growth Acceleration Vehicle Finance Loan Book (Rs.’000cr) MFI Loan Book (Rs.’000cr) Domains Poised for Loan Growth 55 56 58 57 58 59 61 61 60 59 61 62 65 67 18 19 2
Slide 31: Deposit Mobilization to Continue Apace; Multiple Initiatives in Place
2 Deposit Mobilization to Continue Apace; Multiple Initiatives in Place Multipronged Strategy in Place with Data Intelligence Driven Client Engagement Approach Best-in-Class Experience at ‘’PIONEER‘’ Branches Strengthening the Core Business 1 • • • • Branch Network Expansion Market Share Gain in Hom
Slide 32: Leapfrogging Digital 2.0
3 Leapfrogging Digital 2.0 Digital 2.0 Strategy to drive 3 main Continued Execution on Our Digital 2.0 Initiatives objectives across business lines Launched in FY22 Work in Progress 5. SME Digital 4. Differentiated Offering payments & finance 1 Build Enriched Digital Value Proposition Stacks 3. Merc
Slide 33: Scaling-up New Growth Boosters
4 Scaling-up New Growth Boosters Scaling Up Existing Initiatives… …Adding New Boosters Affluent Banking NRI Banking • Pioneer” offering well accepted in the market • Ramping-up NR branches, international • Product & customer segment expansion to presence Home Loans boost growth • End to end digital
Slide 34: Becoming Employer of Choice
5 Becoming Employer of Choice Work Opportunities Rewards Culture Work Environment Advancement Pay & Benefits Affiliation 1. Recognition & Autonomy 1. Continuous learning 1. Market-linked 1. Pride & Trust 2. Work environment – at work compensation 2. Collaboration & team quality infrastructure 2. Car
Slide 35: Sustainable Banking: Integrating ESG with Business, Risk & Operations
6 Sustainable Banking : Integrating ESG with Business, Risk & Operations Integration of ESG Risk with Credit Risk 2022 Highlights Launch of ESG Theme Products Green Fixed Deposit Risk Sharing with Multilateral Agencies NR Home Coming with Akshay Patra Foundation GHG Intensity down from 3
Slide 36: We are thus Committed to the PC-5 Ambitions
We are thus Committed to the PC-5 Ambitions Planning Cycle 5 (2020–23) Loan Growth 15% - 18%* CASA Ratio > 40% Resulting in Revenue Growth Exceed Balance Sheet Growth PPOP / Loans > 5% Branch Network 2,500 Customer Base Double to >45mn * For FY22-FY23 36
Slide 37: A Peep Into Potential 'Planning Cycle 6'
A Peep Into Potential “Planning Cycle 6” Domains to Contribute >50% of Loans Addition of a New Domain Asset Management, Traditional + Surge in Client Retail Broking, Para Banking Digital >4 mn per Acquisition Insurance year Green Ops, Lending, Vehicles, “Sustainability” at Consistent Gain in Employe
Slide 38: Potential Initiatives to Drive the Themes
Potential Initiatives to Drive the Themes Ramping up Micro Banking in Rural India Used Vehicles Scale-up Secured Retail Assets INDIE Launch & Scale-Up Investment in Distribution Doubling of Affluent & NRI Business Driving SME & MSME Imbibing ESG in Business Addition of 4th Domain / Para Penetration
Slide 39: Potential 'Planning Cycle 6' Outcomes
Potential “Planning Cycle 6” Outcomes Tentative Indicators Loan Growth CAGR Ahead of PC-5 Loan Mix 60%:40% Retail: Corporate Resulting in CASA Ratio > 45% PPOP / Loans > 5.5% Branch Network > 3,000 Customer Base > 50mn 39
Slide 40: Thank You
THANK \ielu, IndusInd Bank
Slide 41: Disclaimer
Disclaimer This presentation has been prepared by IndusInd Bank Limited (the “Bank”) solely for information purposes, without regard to any specific objectives, financial situations or informational needs of any particular person. All information contained has been prepared solely by the Bank. No in