Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Investor Day (August 2017)
47 slides from Edelweiss Financial Services's investor day presentation, Aug 7, 2017
Slide 1: Cover letter to National Stock Exchange
Gx Edelweiss Ideas create, values protect EW/Sec/2017/514 August 7, 2017 National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051. Dear Sirs, Ref.:- Symbol - EDELWEISS Sub: Investor Meet Presentation Please find enclosed the ‘Investor Day 2017’ pres
Slide 2: Cover letter to BSE Limited
‘oO Edelweiss Ideas create, values protect EW/Sec/2017/515 August 7, 2017 BSE Limited P J Towers, Dalal Street, Fort, Mumbai - 400 001. Dear Sirs, Ref.:- Scrip Code:- 532922 Sub: Investor Meet Presentation Please find enclosed the ‘Investor Day 2017’ presentation. Kindly take the same on record. Tha
Slide 3: Edelweiss Investor Day
Edelweiss Investor Day August 7, 2017
Slide 4: Agenda
Agenda 1 Introduction to Edelweiss Senior Management 2 Q1FY18 Results Update 3 Overview and Business Approach 4 Our Businesses 5 Building a High Quality Organisation 6 India Tailwinds 2
Slide 5: Introduction to Edelweiss Senior Management
Introduction to Edelweiss Senior Management 3
Slide 6: Senior Management
Senior Management Rashesh Shah Rujan Panjwani Venkat Ramaswamy Ramya Rajagopalan Himanshu Kaji S. Ranganathan 4
Slide 7: Q1FY18 Results Update
Q1FY18 Results Update 5
Slide 8: Q1FY18 Results Highlights
Q1FY18 Results Highlights 1 Sustained growth in profitability Consolidated PAT growth 41% YoY; Ex-Insurance PAT growth 43% YoY Balance Sheet growth 32% YoY 2 Profit growth across businesses Credit business grew 42% YoY Franchise & Advisory business grew 87% YoY 3 Continued improvement in key perform
Slide 9: PAT Growth of 41% YoY in Q1FY18
PAT Growth of 41% YoY in Q1FY18… (INR Cr) Q1FY17 Q4FY17 Q1FY18 YoY Growth PAT 140 170 196 41% Consolidated Credit 96 128 137 42% Franchise & 34 78 64 87% Advisory Insurance (16) (42) (26) - BMU, Corp 26 6 21 (19%) & Others PAT 155 212 222 43% Ex-Insurance 7 BMU, Corp & Others – Balance Sheet Managem
Slide 10: With Significant Scale and Growth in Assets
…With Significant Scale and Growth in Assets As on 30th June’17 (rounded off to nearest 100) INR Cr YoY Growth On Balance Sheet Assets 43,600 32% Off Balance Sheet Assets 127,800 95% Clients ~11,00,000 Distressed Credit (ARC Assets) 36,600 33% Assets Under Advice (Wealth Management) 65,900 112% Fund
Slide 11: And a Stronger Balance Sheet
…And a Stronger Balance Sheet Liquidity cushion at INR 4,500 cr is ~10.3% of Balance Sheet Increased quantum of long term liabilities to ~INR 18,000 cr Positive asset-liability matching across durations Comfortable capital adequacy ratio - stood at 17.05% as on June’2017 9
Slide 12: Overview and Business Approach
Overview and Business Approach 10
Slide 13: Our Journey Over the Last Years
Our Journey Over the Last 21 Years Profit after Tax INR cr Joyful Hyper Painful Mature 700 Birth Pangs Baby Steps Growth Consolidation Balanced Growth 600 FY17 FY08 • PAT 609 cr 500 • PAT 273 cr • Networth 5,290 cr • Networth 2,330cr 400 FY12 • PAT 128 cr • Networth 2,875cr 300 FY00 FY04 200 • PAT 4
Slide 14: We are now focused on scaling up existing businesses
We are now focused on scaling up existing businesses 12
Slide 15: We are a Diversified Financial Services Company
We are a Diversified Financial Services Company… Credit Multiple vectors of growth • Retail Credit • Corporate Credit • Distressed Credit Delivers consistent growth and profitability Franchise & Advisory Helps manage short term volatility in the business cycle • Wealth Management • Asset Management
Slide 16: With Consistent Growth Over the Past Years
…With Consistent Growth Over the Past 5 Years Profit after Tax Ex-Insurance PAT Consolidated PAT (INR Cr) 222 212 187 166 196 154 155 170 133 155 120 111 140 144 98 103 122 89 90 70 69 72 106 62 68 91 96 48 51 57 78 79 83 88 46 35 61 27 46 51 56 46 58 39 40 42 26 29 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY1
Slide 17: Our Aim Over the Next 3 Years is to
Our Aim Over the Next 3 Years is to… 1 Consistently grow our PAT at 25% - 35% annually 2 Reach a Consolidated RoE of 18% 3 Reach an Ex-Insurance RoE of 22% 4 Bring down Ex-Insurance Cost to Income Ratio below 50% 5 Increase Retail Credit Book to 50% of Total Credit Book 6 Maintain our asset quality
Slide 18: Our Businesses
Our Businesses 16
Slide 19: Credit
Credit
Slide 20: Senior Management
Senior Management Anil Kothuri R.K Bansal (Advisor) Retail Mortgage Distressed Assets & SME Resolution Ravi Bubna Siby Antony Corporate Distressed Assets Credit Resolution Randhir Singh Amit Agarwal Structured Distressed Assets Collateralised Credit Resolution Sanjeev Rastogi Wholesale Mortgage 18
Slide 21: Growth Driven by Our Diversified Credit Book
Growth Driven by Our Diversified Credit Book… As on 30th June’2017 Book Size (INR Cr) % Share Retail Credit 10,245 34% Blend of loans to home owners and home buyers Retail Mortgage 4,032 13% SME & Business Loans 2,327 8% Highly scalable, focus area for future Loan against shares 3,007 10% Catering t
Slide 22: With Improving NIMs and Robust Asset Quality
…With Improving NIMs and Robust Asset Quality At the end of FY15 FY16 FY17 Q1FY18 Credit Book 15,036 20,014 27,608 28,869 Days Past Due 180 dpd 150 dpd 120dpd 90 dpd Net Interest Margin 6.7% 6.8% 7.2% 7.6% Gross NPA % 1.31% 1.40% 1.59% 1.71% Net NPA % 0.38% 0.47% 0.60% 0.61% Total Provision Cover 94
Slide 23: Retail Credit is Expanding Footprint
Retail Credit is Expanding Footprint Capital Employed (INR Cr) Products tailored for target segments that are large, growing, underpenetrated and profitable 10,245 Established and optimized business infrastructure and 8,952 platform 6,031 Digital initiatives to drive operational efficiency 4,188 und
Slide 24: Steady Growth in Corporate Credit
Steady Growth in Corporate Credit Capital Employed (INR Cr) Amongst the top 5 players in the Structured Collateralised Credit space in India 14,491 13,875 In house team of experts carrying out detailed 12,088 evaluations -Counterparty, Collateral and Cash flows 9,622 Ring fenced structures and hybri
Slide 25: EARC is the Largest Asset Reconstruction Company in India
EARC is the Largest Asset Reconstruction Company in India Capital Employed AUM (INR Cr) Large opportunity : NPA of ~8Lakh Cr. and Stressed 41,680 assets of ~10Lakh Cr. 39,500 5,133 Focus on large operational assets but financially 4,781 broken 27,100 Focused on delivering long term risk adjusted ret
Slide 26: While Credit remains the core, Franchise & Advisory gives a Diversified Model
While Credit remains the core… Franchise & Advisory businesses give us a truly Diversified Model 24
Slide 27: Franchise & Advisory
Franchise & Advisory
Slide 28: Senior Management
Senior Management Nitin Jain Hemant Daga Global Asset & Asset Wealth Management Management Ashish Kehair Vikas Khemani Wealth Capital Management Markets Deepak Mittal Vidya Shah Life EdelGive Insurance Foundation 26
Slide 29: Wealth Management Scaling Up Rapidly
Wealth Management Scaling Up Rapidly Assets Under Advice (INR Cr) 65,900 60,300 • Amongst the top 3 Wealth Management players in India 29,500 17,750 • Large market opportunity o UHNI segment: INR 35 lac Cr AUM o HNI & Mass Affluent: INR 30 lac Cr AUM FY 15 FY 16 FY17 Q1FY18 • Focus on offering diffe
Slide 30: Asset Management – Building a Sustainable Franchise
Asset Management – Building a Sustainable Franchise Assets Under Management (INR Cr) Mutual Fund Alternative Assets • Leading player in the Private Debt space across real estate credit, distressed assets 18,200 19,700 credit and special opportunities 11,800 • Established track record in Private Debt
Slide 31: Capital Markets – Pioneer and Market Leaders
Capital Markets – Pioneer and Market Leaders Present across the spectrum of Capital Markets Team strength of 500+ across businesses Institutional Equities Debt Capital Markets Investment Banking • Largest domestic • Leadership position in • Multi product, multi sector institutional brokerage Public
Slide 32: Life Insurance
Life Insurance
Slide 33: Life Insurance Expected to Break Even by 2022
Life Insurance Expected to Break Even by 2022 Products Traditional Par Traditional Non Par ULIP Group • Great partnership with Tokio Marine 33% 11% • Focus on Agency and Non Par Business Model 32% 24% • Indian Embedded Value (IEV) at INR 1,034 cr as on Q1FY18 Individual Annual Premium Equivalent • P
Slide 34: Building a High Quality Organisation
Building a High Quality Organisation 32
Slide 35: Building a High Quality Organisation
Building a High Quality Organisation 1 Human Resources & Leadership 2 Culture of Ownership 3 Focus on Risk 4 EdelGive Foundation 33
Slide 36: Human Resources & Leadership
Human Resources & Leadership 1 Focus on attracting and retaining talent 2 Balanced mix of organic as well as inorganic talent 3 Committed towards creating a continuous talent and leadership pipeline 4 Fostering culture and promoting an all encompassing diverse culture 34
Slide 37: Our Risk Governance Structure
Our Risk Governance Structure Oversight by Board Risk Committee Global Risk Committee Corporate Controller & audit Business Risk Group Risk Risk Council • Define Organisation risk framework Business • Implementation of • Identify key current risk framework • Risk aggregation and and potential risks
Slide 38: EdelGive Foundation - Our Philanthropic Focal Areas
EdelGive Foundation - Our Philanthropic Focal Areas Education Livelihood Women Empowerment Empowering children Water and soil conservation, Promoting safety, gender through holistic learning skill development, financial justice, and economic approach, life skill & inclusion, livelihood generation em
Slide 39: Philanthropic Ecosystem of Giving
Philanthropic Ecosystem of Giving Impacted more than 455,000 lives EW Employees contributed over 22,000 Influenced over 94 crores in philanthropy Supported over 100 NGOs in nine years hours of pro bono support Presence in 14 states Collaborate Financial Grants Towards a high impact social sector HNI
Slide 40: India Tailwinds
India Tailwinds 38
Slide 41: Global Investors see India as the Next China
Global Investors see India as the Next China… 1 Macroeconomic Environment - Best it has ever been 2 Stable Government has taken several big ticket reforms 3 India’s age of compounding has started Wide spread conviction on India’s growth and potential transformation 39
Slide 42: India is Expected to be a $5 Trillion Economy by 2025
India is Expected to be a $5 Trillion Economy by 2025 … India GDP $5 2.5x in next 11 years trn Another 2.5x in following 9 years Grew 2x in 9 years $2 trn $ 800 $ 400 bn bn 2018 2020 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2019 20
Slide 43: Within India Financial Services is Growing even faster
Within India Financial Services is Growing even faster
Slide 44: Key Trends Driving Growth in Financial Services
Key Trends Driving Growth in Financial Services 1 Privatization of Credit 2 Democratization of Credit 3 Shift towards Financial Assets 4 Increasing Affluence 5 Rising Insurance Penetration 6 Increasing Capital Markets Participation 42
Slide 45: These Trends will Transform Financial Services Landscape in India
These Trends will Transform Financial Services Landscape in India.. USD billion 2017 2025 Revenue 250 1,250 5x PAT 25 150 6x Market cap 300 1,500 5x Number of Ultra HNIs 1,50,000 8,00,000 5x 43 Source: Edelweiss Research
Slide 46: What Will it Take to be a Part of the India Growth Story?
What Will it Take to be a Part of the India Growth Story? Capital Volatility allocation Management efficiency 4 Key Aspects.. Opportunism Bifocal vision 44
Slide 47: Q&A
Q&A (*) 45
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