Axis Bank Limited · NSE:AXISBANK
Axis Bank — Debt Investor Presentation (March 2024)
42 slides from Axis Bank's debt investor presentation, March 2024
Slide 1: Stronger, Consistent and Sustainable Growth
Stronger, Consistent and Sustainable Growth Debt Investor Presentation March 2024
Slide 2: Macro Environment is normalizing
Macro Environment is normalizing 2 Public
Slide 3: India remains the fastest growing large economy, expect strong momentum to continue
India remains the fastest growing large economy, expect strong momentum to continue Global growth has normalized India GDP growth continues to be strong 9.7 6.3 7.0 7.6 6.5 3.5 3.1 3.1 3.9 2.8 -2.8 * -5.8 * CY19 CY20 CY21 CY22 CY23 CY24F FY19 FY20 FY21 FY22 FY23 FY24E ^ Source: *IMF Estimate ^ MoSPI
Slide 4: High frequency indicators continue to show expansion
High frequency indicators continue to show expansion 100 860 GST collections (in Rs Tn) 12.9% YOY Air traffic 10% YOY 5.06 5.05 840 95 4.88 820 90 800 4.66 85 780 4.47 4.40 760 80 Passenger (mn) LHS 740 75 Freight (KT) RHS 720 70 700 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q2FY23 Q3FY23 Q4FY23 Q1F
Slide 5: INR among the most stable EM currencies, with recovering macros and healthy reserves
INR among the most stable EM currencies, with recovering macros and healthy reserves Performance of INR and peers against the USD USD bn 700 India FX reserves, USD bn 10 7.8 600 5 500 0.5 0 400 0.0 -0.5 -1.1 -0.5 -0.8 -1.2 -2.2 300 -5 -4.1 -6.7 200 -7.1 -10 Since Jan'23 Since Jan'24 100 -10.5 -15 0
Slide 6: Core CPI inflation performing exceptionally well, food inflation remains a bugbear
Core CPI inflation performing exceptionally well, food inflation remains a bugbear CPI headline and core inflation trends 12% 12% 10% 10% 8% 8% Core 6% 6% 4% CPI - Headline 4% 2% 2% Food 0% 0% -2% -2% Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Source:
Slide 7: India goods imports have grown due to both prices and demand, offset by services exports
India goods imports have grown due to both prices and demand, offset by services exports India imports over the years, USD bn India services imports and exports FY23 60% 35 Receipts RHS Payments RHS USD bn FY21 50% Receipts Payments 30 FY19 40% 25 30% FY17 20 20% FY15 15 10% - 150 300 450 600 750 10
Slide 8: Yield curve has flattened, watch for steepening as markets begin to price in cuts
Yield curve has flattened, watch for steepening as markets begin to price in cuts… (in %) 8.0 7.5 7.0 6.5 6.0 5.5 5.0 Repo rate 4.5 12m T-bill 4.0 10y G-sec 3.5 3.0 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 Source: Bloomberg 8 Public
Slide 9: Transmission of monetary policy remains in progress; credit offtake elevated
Transmission of monetary policy remains in progress; credit offtake elevated (in %) WALR(Fresh Rupee Loans) 21% Non-food credit growth (%, YoY) 11 WATDR outstanding deposits Non-food credit growth (%, YoY) ex HDFC merger Repo Rate 19% 10 Deposit growth (%, YoY) 9.45 WATDR fresh deposits Deposit grow
Slide 10: Liquidity is now back in surplus temporarily, with RBI allowing overnight rates to fall
Liquidity is now back in surplus temporarily, with RBI allowing overnight rates to fall India liquidity surplus along with overnight rates Rs. tn 7.00 -10.00 -9.00 6.75 -8.00 -7.00 6.50 -6.00 -5.00 6.25 -4.00 -3.00 6.00 High government balances held with the -2.00 RBI have also witnessed some drawdo
Slide 11: India continues to be an attractive investment opportunity
India continues to be an attractive investment opportunity • FY24 has seen rebound in net FPI investments after the weakening seen in FPI flows in FY22 and FY23 in line with global monetary tightening. With the cycle moving back to cuts, flows are expected to return • India’s equity stock market cap
Slide 12: The Axis Bank Story
The Axis Bank Story 12 Public
Slide 13: Axis Bank at a glance
Axis Bank at a glance 3rd ~ 48 mn 99,600+ 5,252 Axis Bank Employees Branches* largest Private Bank in India Customers 5.4% 5.0% 5.9% 14.0% Market Share Assets 1 Deposits 1 Advances 1 Credit Cards 2 Profitability 18.86% 4.01% 2.64% 2.49% Consolidated ROE (9MFY24) Net Interest Margin 3 Operating Profi
Slide 14: We have delivered consistent and robust improvement in shareholder return metrics
We have delivered consistent and robust improvement in shareholder return metrics Trend in Consolidated ROA and ROE 2.00% 1.8% 1.8% 1.80% 1.60% 1.3% 1.40% 0.7% 1.20% 1.00% 0.80% 0.60% Consolidated ROA 0.2% 18.8% 18.9% 0.40% 0.20% 0.00% 13.7% 8.2% Consolidated ROE 2.7% FY20 FY21 FY22 FY23 9MFY24 14 P
Slide 15: The Bank continues to deliver on the GPS strategy keeping up the commitments made
The Bank continues to deliver on the GPS strategy keeping up the commitments made at the beginning of our journey FY19 FY23 9MFY24 Advances mkt share 4.9% 6.0% 5.9% Lifted the growth Deposits mkt share 4.3% 5.1% 5.0% momentum (1) (2) (3) Operating 8% 16% 23% Revenue growth Cons ROE 8.58% 18.84% 18.8
Slide 16: We are a strong, future ready and an all-weather franchise
We are a strong, future ready and an all-weather franchise Sustained, Consistent Financial Outperformance Deliver world class customer experience led by project Sparsh 7 Build India’s most profitable Bharat banking franchise Leadership in Digital with best-in-class capabilities Growth Profitability
Slide 17: Self-sustaining capital structure, resulting in value accretion for all stakeholders
1 Self-sustaining capital structure, resulting in value accretion for all stakeholders Historically equity raise was supporting capital consumption… … profit accretion is adequate to fund organic growth Includes 44 bps 0 towards assets acquired 1.38% 6.03% 7.10% 1.77% 5.87% 1.91% 0.70% 14.02% 13.71%
Slide 18: Liquidity & Funding profile remains healthy
Liquidity & Funding profile remains healthy Liquidity Coverage Ratio continues to remain Bank has diversified and stable funding profile higher than regulatory requirements Higher than average LCR Liquidity Coverage Ratio maintained in Q4FY23, partly for Citibank CB* acquisition Other Liabilities an
Slide 19: Strengthened balance sheet significantly with one of the best asset quality metrics in the industry
2 Strengthened balance sheet significantly with one of the best asset quality metrics in the industry 78% Net NPA ratio for large banks 75% PCR (as of Dec’23) 69% 0.44% 0.36% 0.31% 52% 6.77% Peer 1 Axis Bank Peer 2 4.86% Gross Retail NPA ratio for large banks 3.40% 2.82% 3.0% 1.56% 1.58% 0.73% 0.36%
Slide 20: The structural improvement in quality of earnings with better RWA profile
3 The structural improvement in quality of earnings with better RWA profile… (1) Trend in Trailing 4 Quarters Standalone ROA and RoRWA Credit RWA* 60% 60% 60% 60% (2) 59% 59% 58% 58% 57% 57% 56% 56% 55% 55% 54% 54% 54% 53% 53% (2) 2.80% 2.78% 1.93% 1.85% 1.82% 1.20% 0.99% 1.06% 0.68% 0.70% 0.23% 0.1
Slide 21: … and improving NIMs…
… and improving NIMs… (1) Structurally improved NIM trajectory 4.08% 4.02% 3.67% 24 bps 3.51% 3.53% Improvement in NIMs NIMs 3.44% 3.43% through cycle * 3.47% FY17 FY18 FY19 FY20 FY21 FY22 FY23 9MFY24 Retail & SME as % of loan book Non INR book as % of overall book (2) Reducing share of low yielding
Slide 22: … and granular fees which is among the best in industry
… and granular fees which is among the best in industry Total fee to average assets Improved the fee profile significantly in last few years (as of Q3FY24) 1.49% 1.20% 0.84% Granular* Fee to Avg Assets 1.37% 1.18% 1.20% 1.17% 1.20% 1.13% 1.10% Peer 1 Peer 2 Axis Bank 1.02% Fee income growth (FY20 to
Slide 23: Lifted growth momentum across our risk adjusted, higher yielding segments
Lifted growth momentum across our risk adjusted, higher yielding 4 segments 55% Retail Segment 50% SBB, 44% 45% 40% Business Segment wise 35% Credit Cards, 30% 24% 25% CAGR (since FY20) in Focus 30% business segments LAP, 23% SME, 19% 25% Rural loans , 22% Retail , 18% 20% 20% Personal loans , 14% 1
Slide 24: Sustained execution resulting in consolidation of our position across various businesses
Sustained execution resulting in consolidation of our position across various businesses 3rd `5 Tn 42% 600 bps Largest Private Banking & Wealth One of the highest CASA ratio Reduction in outflow rates in last 2 years, Wealth AUM as of Dec’23 Mgmt. AUM among large peers (MEB basis) quality of LCR dep
Slide 25: Deposit franchise continues to grow faster than the industry with improvement in quality and composition
5 Deposit franchise continues to grow faster than the industry with improvement in quality and composition We have grown faster than industry consistently… …with improvement in the quality of deposits… …while delivering healthy CASA levels and reducing borrowings ~600 bps reduction in outflow rates
Slide 26: Created multiplicative forces through unification of One Axis, partnerships and new age tech platforms
Created multiplicative forces through unification of One Axis, 6 partnerships and new age tech platforms to win across businesses Digital 2.0. Partnerships 63,500+ Bharat Banking Retail Common Service Centre Village level entrepreneurs Assets 13 mn Wholesale Retail Digital Mobile Banking Monthly act
Slide 27: Continue to build scale and create significant value in key subsidiaries
Continue to build scale and create significant value in key subsidiaries Invst Banking Consumer Retail Fintech Asset Management Trustee TReDS platform Insurance & Inst Equities focused NBFC Brokerage platform One of the fastest Leadership position in AAA rated NBFC with 3rd largest bank led Amongst
Slide 28: Sparsh (Customer Obsession) and Siddhi (Empowering Employees) to set us apart in the next decade
7 Sparsh (Customer Obsession) and Siddhi (Empowering Employees) to set us apart in the next decade Sparsh – our Customer Obsession Program has Siddhi - the Super App that empowers Axis colleagues aided improvement in our NPS ranking… to engage seamlessly with customers 25% 3rd 60K+ YOY Improvement i
Slide 29: Bharat Banking strategy continues to play out well with strong growth momentum in RuSu markets
Bharat Banking strategy continues to play out well with strong growth momentum in RuSu markets 2,420 +63,500 80+ Large and deep distribution Bharat Banking branches Common Service Centre Village Partners as of Dec 2023 level entrepreneurs Delivered strong growth at 34% 46% 11% current scale YOY grow
Slide 30: open by Axis Bank continues to deliver strong growth
open by Axis Bank continues to deliver strong growth, as we remain ahead of the curve on new innovations 148 1st 100 To go live on Account Aggregator framework Deposits 9MFY23 9MFY24 186 1st Bank to launch (1) CBDC merchant app 100 Loans 1st 9MFY23 9MFY24 Bank to go live on RBI Tech platform(2) offe
Slide 31: Our cutting-edge data analytics capabilities and leadership in technology continue to accelerate distinctiveness
Our cutting-edge data analytics capabilities and leadership in technology continue to accelerate our distinctiveness journey 1st 1st 800 Resilient and scalable Indian Bank to roll-out Best-in-class Indian Bank to be ISO systems infrastructure certified for its AWS and MS GenAI Co-pilot BitSight (1)
Slide 32: We have demonstrated our execution and innovation capability by establishing leadership in Digital
We have demonstrated our execution and innovation capability by establishing leadership in Digital and many industry first positions Market share across various products 20% 18% 14% 12% 9% 5.0% 5.8% Deposits Advances RTGS Foreign LC Credit Cards BBPS UPI (by value as (by value as (by value for (by v
Slide 33: Integration of acquired Citi Consumer Franchise remains on track
Integration of acquired Citi Consumer Franchise remains on track Apr ‘22 Jul ‘22 1st Mar '23 H1 FY25 Announcement of LD1 LD2 CCI approval merger Legal merger System integration • The ex-Citi colleagues have welcomed the opportunity to take on larger responsibilities (1) • The portfolio metrics trend
Slide 34: One Axis positions us well to play all mega trends of the next decade
One Axis positions us well to play all mega trends of the next decade SME & Atmanirbhar businesses Credit gap in MSME Rs. 25 tn (2022) Rising financial inclusion Consumption boom Financial inclusion index at 60.1 in Mar’23 vs 56.4 in Mar’22 MC & CBG, Consumer spending to rise at a CAGR arat , Atreds
Slide 35: Other important information
Other important information • Debt instruments currently outstanding • Credit Ratings • Sustainability at Axis Bank • Financials 35 Public
Slide 36: Axis Bank MTNs (Senior Notes + Subordinate) currently outstanding
Axis Bank MTNs (Senior Notes + Subordinate) currently outstanding Sr. No Issue Coupon Issue Date Maturity / Call Date Size (US$ Mn) 1 Senior Fixed Rate Note 3.75% 17-Feb-15 17-Feb-25 55 Senior Fixed Rate Note 2 3.817% 18-Apr-19 18-Apr-24 40 (Green Bond) Subordinate Fixed Rate Note 3 4.10% 08-Sept-21
Slide 37: Credit Ratings (as of February'24)
Credit Ratings (as of February’24) Foreign Currency Ratings Domestic Currency Ratings Rating Agency Long term Issuer rating Outlook Rating Agency Long term Issuer rating Outlook Moody’s Baa3 Stable CRISIL CRISIL AAA Stable Update as of 21-Feb-2024 Update as of 22-Nov-2023 S&P Ratings BBB- Stable ICR
Slide 38: Committed to Positive Climate Action and Achieving the SDGs
Committed to Positive Climate Action and Achieving the SDGs • Axis Bank is the first Indian Bank to constitute a standalone ESG Committee of the Board • In September 2021, the Bank announced commitments aimed at supporting India’s low-carbon and equitable economic transition • The Bank’s commitments
Slide 39: Q3FY24 Financial Performance
Q3FY24 Financial Performance Financial Performance ($ mn) Q3FY24 Q3FY23 % Growth 9MFY24 9MFY23 % Growth Interest Income A 3,360 2,671 26% 9,631 7,354 31% Other Income B = C+D+E 668 549 22% 1,884 1,365 38% - Fee Income C 621 482 29% 1,757 1,357 29% - Trading Income D 35 51 (32%) 85 (39) - - Miscellan
Slide 40: Balance Sheet
Balance Sheet Balance Sheet As on 31st Dec’23 As on 31st Dec’22 As on 31st Dec’23 As on 31st Dec’22 % Growth CAPITAL AND LIABILITIES In ` Crores In ` Crores in $ Mn in $ Mn Capital 617 615 74 74 0.3% Reserves & Surplus 1,42,367 1,30,030 17,109 15,626 9% ESOP Outstanding 745 364 90 44 105% Deposits 1
Slide 41: Safe Harbor
Safe Harbor Except for the historical information contained herein, statements in this release which contain words or phrases such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “futu
Slide 42: Thank you
Thank you A's BANK