Edelweiss Financial Services Limited · NSE:EDELWEISS
Edelweiss Financial Services — Investor Day (April 2017)
30 slides from Edelweiss Financial Services's investor day presentation, Apr 10, 2017
Slide 1: Edelweiss letter to BSE: Investor Presentation
Ce Edelweiss Ideas create, values protect EW/Sec/2017/351 April 10, 2017 BSE Limited PJ Towers, Dalal Street, Fort, Mumbai - 400 001. Dear Sirs, Ref.:- Scrip Code:- 532922 Sub: Investor Presentation Please find enclosed the presentation being made to the Analysts. Kindly take the same on record. Tha
Slide 2: Edelweiss Analyst Day
Edelweiss Analyst Day Friday April 7th, 2017
Slide 3: Agenda
Agenda 1 Our Journey 2 Businesses at Edelweiss 3 Building a High Quality Organization 4 India Tailwinds 5 Edelweiss Growth Aspirations 2
Slide 4: Our Journey
Our Journey
Slide 5: Phases of Our Journey
Phases of Our Journey Until 2004 Capital Markets 2005 onwards Start of Credit 2012 onwards Asset Management, Wealth Management, Insurance 4
Slide 6: Ex-Insurance PAT CAGR of 37%
Ex-Insurance PAT CAGR of 37% over last 5 years… Profit after Tax 187 (INR Cr) 166 154 155 133 155 120 140 144 111 103 98 122 89 90 106 70 69 68 72 91 96 62 88 57 78 79 83 46 48 51 56 58 61 46 51 46 39 40 42 Q1FY14 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1
Slide 7: We have Now Evolved into a Diversified Business Model
We have Now Evolved into a Diversified Business Model CREDIT NON CREDIT INSURANCE Present across: Strong product franchise One of the fastest growing Retail serving diverse client needs: life insurance companies • Wealth Management Corporate • Asset Management Distressed Assets • Capital Markets • A
Slide 8: Businesses at Edelweiss
Businesses at Edelweiss
Slide 9: Our Businesses – 9MFY17
Our Businesses – 9MFY17 EoP Profit RoE RoA (INR Cr) Equity After Tax Credit Business 3,430 321 18.2% 2.1% Non Credit 949 187 24.4% 2.5% Total (Ex-Insurance) 4,379 508 20.9% 2.3% Insurance 810 -68 - - Consolidated 5,189 439 15.4% 1.7% 8
Slide 10: Growth Driven by Our Diversified Credit Book
Growth Driven by Our Diversified Credit Book… As on Dec’2016 Book Size % Share Corporate Book 13,606 54% Customized credit solutions with adequate Structured Collateralised Credit 7,260 29% collateral cover Wholesale Mortgage 6,346 25% Caters to residential developers Retail Book 7,823 32% Catering
Slide 11: Improving NIMs and Robust Asset Quality
Improving NIMs and Robust Asset Quality At the end of 9MFY17 9MFY16 FY16 FY15 Net Interest Margin 7.0% 6.7% 6.8% 6.7% Gross NPA % 1.53% 1.44% 1.40% 1.31% Net NPA % 0.55% 0.50% 0.47% 0.38% Total Provision Cover 89% 86% 88% 94% Average Collateral cover on Wholesale book 2.2x 2.1x 2.1x 2.3x Average Loa
Slide 12: 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 ~7Lakh Cr. and Stressed assets of ~10Lakh Cr. 31,600 3,543 Focus on large operational assets but financially 27,100 broken 2,641 Focused on delivering long term risk adjusted returns of
Slide 13: While Credit remains the core… Non Credit Businesses give us a Diversified Model
While Credit remains the core… Non Credit Businesses give us a truly Diversified Model 12
Slide 14: Wealth Management AUA increased 6X in 3 Years
Wealth Management AUA increased 6X in 3 Years Wealth Management scaling up rapidly Assets Under Advice (INR Cr) 53,700 • Present in Ultra High Net worth/ High Net worth/ Mass Affluent segment 29,500 17,750 • Focus on offering differentiated strategy 8,900 across client segments FY 14 FY 15 FY 16 9M
Slide 15: Asset Management - Fund Closures Leading Growth in AUM
Asset Management - Fund Closures Leading Growth in AUM Assets Under Management (INR Cr) Mutual Fund Alternative Assets • Largest Private debt player with Institutional 17,200 clients • Established track record in Private Debt 10,700 • Largest Credit SMA in India • Largest player in Alternative Equit
Slide 16: Capital Markets: Pioneer and Market Leaders
Capital Markets : Pioneer and Market Leaders • Largest domestic institutional brokerage house in India Institutional • Market leadership driven by : Strong Fundamental as well as Equities Alternative Derivatives Desk. • Multi-asset Classes • One of the most active ECM and DCM banker Investment • Rob
Slide 17: Life Insurance Expected to Break Even by 2022
Life Insurance Expected to Break Even by 2022 • Great partnership with Tokio Marine • Premium growth has been at 60% CAGR for 3 years ending FY16 • Focus on Agency and Non Par Business Model • Maintained high persistency levels – 70% for 9MFY17 Credit Non Credit Insurance 16
Slide 18: Building a High Quality Organization
Building a High Quality Organization
Slide 19: Building a High Quality Organisation
Building a High Quality Organisation 1 Focus on Risk 2 Human Resources & Leadership 3 Diversified Business Model 4 Strong Balance Sheet 5 Culture of Ownership 18
Slide 20: 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 21: 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 20
Slide 22: Diversified Business Model
Diversified Business Model EDELWEISS Credit Non Credit Insurance WELL DIVERSIFIED Scalable, Stable and Profitable 21
Slide 23: Consolidated 9MFY17 PAT growth of 50%
Consolidated 9MFY17 PAT growth of 50% (INR Cr) 9MFY17 9MFY16 YoY Growth PAT 439 293 50% Consolidated ..... With 17% growth in Assets Balance 37,245 31,900 17% Sheet Non-Linear growth in Profitability 22
Slide 24: ~$21.0 billion of Assets – On and Off Balance Sheet
~ $21.0 billion of Assets – On and Off Balance Sheet As on 31 Dec 2016 INR Cr USD bn Assets on Balance Sheet 37,200 5.5 Distressed Assets (ARC Assets) 31,600 4.6 Assets Under Advice (Wealth Management) 53,700 7.9 Funds under Management (Asset Management) 17,200 2.5 Total Assets 139,700 20.5 23
Slide 25: Strong Balance Sheet
Strong Balance Sheet • Liquidity cushion at ~INR 3,500 cr is 9.4% of Balance Sheet • Diversified liability mix with 43% long term liabilities • Positive asset-liability matching across durations • Comfortable capital adequacy ratio - stood at 17.85% as on Dec 2016 24
Slide 26: India Tailwinds
India Tailwinds
Slide 27: Key Trends Driving Financial Services
Key Trends Driving Financial Services 1 India’s age of compounding 2 Privatization of Indian Economy 3 Democratization of Credit 4 Increasing proportion of financial assets 26
Slide 28: Edelweiss Growth Aspirations
Edelweiss Growth Aspirations
Slide 29: Our Aim is To…
Our Aim is To… Grow our PAT at 25% - 35% over the next 8 years Reach an RoE % of 22% -24% Maintain our asset quality Grow Retail Credit faster than Wholesale 28
Slide 30: Q&A
Q&A (*) 29
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