Axis Bank Limited · NSE:AXISBANK
Axis Bank — FY2017 Earnings Presentation
41 slides from Axis Bank's earnings presentation, April 2017
Slide 1: Earnings Presentation Annual Results FY16-17
Earnings Presentation Annual Results FY16-17 1
Slide 2: 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 3: Performance Highlights
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 3
Slide 4: Summary of Key Metrics
Summary of Key Metrics Q4FY17 FY17 Net Profit 43% 55% Net Interest Income 4% 7% Fee Income 8% 5% Operating Revenue 7% 14% Operating Profit 1% 9% Net Interest Margin 3.83% 3.67% Return on Equity 9.67% 7.22% Advances1 10% Deposits1 16% CASA1 26% GNPA 1 5.04% PCR 1 65% 1 as on March 31, 2017 4
Slide 5: Retail Franchise delivers another year of strong performance
Retail Franchise delivers another year of strong performance Retail Franchise Deposits 16% YOY Advances 10% YOY Fee Income 5% YOY 51% 45% 44% CASA 26% YOY Retail Advances Retail Fee Income 21% YOY 15% YOY SA Deposits 19% YOY Earnings Profile (FY17) 14% 9% 0.65% 7.22% YOY YOY Operating Revenue Operat
Slide 6: Capital adequacy remains healthy
Capital adequacy remains healthy Trend in Capital Adequacy Ratio 16.59% 34 bps YOY 15.29% 15.67% 15.20% 14.95% 3.60% ** 2.78% 3.29% ** 3.17% 3.08% 12.51% 12.38% 12.03% 12.99% 11.87% Mar-16 Jun-16* Sep-16* Dec-16* Mar-17 Tier 1 CAR Tier 2 CAR Total CAR * including unaudited Net Profit for the quarter
Slide 7: Shareholder return metrics have seen moderation in FY17
Shareholder return metrics have seen moderation in FY17 Return on Assets (in %) Return on Equity (in %) 1.78 1.83 1.70 1.72 20.51 18.23 18.57 17.49 0.65 7.22 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 Diluted EPS (`) Book Value Per Share (`) 233 34.93 223 30.85 188 26.45 163 23.77 142 15.34 F
Slide 8: Performance Highlights
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 8
Slide 9: Key balance sheet parameters report healthy growth
Key balance sheet parameters report healthy growth All figures in YOY growth CASA Savings Bank Deposits 26% 27% 21% 20% 20% 19% 19% 18% 18% 17% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Advances Balance Sheet 21% 21% 18% 18% 17% 15% 10% 10% 14% 11% Mar-16 Jun-16 Sep-16 De
Slide 10: Loan growth continues to be driven by retail
Loan growth continues to be driven by retail All figures in ` Crores Total Advances 10% YOY Loan Mix (As on March 31, 2017) 373,069 344,925 353,170 347,175 338,774 149,284 167,993 138,521 143,159 149,538 Corporate Retail 42% 44,869 43,611 45,857 43,208 49,172 45% SME 155,384 158,155 158,029 154,429
Slide 11: Growth in Bank's Advances and Deposits has been better than the Banking system
Growth in Bank’s Advances and Deposits has been better than the Banking system Growth in Total Advances Growth in Total Deposits 22% 19% 21% 17% 16% 16% 16% 15% 15% 14% 17% 11% 10% 14% 14% 14% 13% 13% 11% 11% 11% 9% 9% 5% FY12 FY13 FY14 FY15 FY16 FY17 FY12 FY13 FY14 FY15 FY16 FY17 *Source: Axis Bank
Slide 12: Deposit franchise continues to remain healthy
Deposit franchise continues to remain healthy All figures in ` Crores Savings Bank Deposits Current Account Deposits 19% YOY 37% YOY 126,048 87,002^ 118,072 105,793 107,839 100,185 63,652 62,122 55,229 58,379 Mar-16 Jun-16 Sep-16 Dec-16* Mar-17* Mar-16 Jun-16 Sep-16 Dec-16* Mar-17* * 42% of Demoneti
Slide 13: Sequential deposit growth has been strong
Sequential deposit growth has been strong All figures in ` Crores Savings Bank Deposits Current Deposits 10% QOQ 7% QOQ 6% QOQ 49% QOQ 126,048 118,072 87,002 107,839 62,122 58,379 Sep-16 Dec-16 Mar-17 Sep-16 Dec-16 Mar-17 Retail Term Deposits Total Deposits 8% QOQ 1% QOQ 2% QOQ 12% QOQ 136,099 414,3
Slide 14: Performance Highlights
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 14
Slide 15: Earnings continue to improve on a sequential basis
Earnings continue to improve on a sequential basis All figures in ` Crores Net Profit Operating Revenue 7% YOY 2,154 43% YOY 7,734 7,742 7,247 7,255 7,054 1,556 111% QOQ 2,694 2,738 3,400 3,013 1,225 2,540 580 319 4,553 4,517 4,514 4,334 4,729 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q4FY16 Q1FY17 Q2FY17
Slide 16: NIM saw an improvement during the quarter
NIM saw an improvement during the quarter Cost of Funds NIM - Global NIM - Domestic 5.84% 5.81% 4.24% 5.68% 4.04% 4.11% 3.93% 5.51% 5.42% 3.61% 3.97% 3.79% 3.83% 3.64% 3.43% FY17 Global NIM is at 3.67% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Movement in NIM Unfavourable
Slide 17: MCLR based loans continue to grow at the expense of Base Rate linked loans
MCLR based loans continue to grow at the expense of Base Rate linked loans Advances mix by Rate type Trend in 1 year MCLR (%) 9.50 69% 65% 57% 50% 42% 9.30 9.25 9.20 9.05 8.90 8.25 8.25 18% 29% 0% 11% 4% 17% 17% 16% 17% 15% Apr-16 Jul-16 Aug-16 Oct-16 Nov-16 Dec-16 Jan-17 Mar-17 14% 14% 15% 16% 14%
Slide 18: Overall fee growth was moderate but Retail Fee improved further
Overall fee growth was moderate but Retail Fee improved further All figures in ` Crores Fee Income Fee Composition 7% YOY Corporate Treasury & DCM SME 2,423 Transaction Banking* Retail (card) Retail (non card) 2,254 Corporate fees Granular fees** 1,935 29% 26% 28% 28% 1,805 30% 1,719 13% 16% 15% 17%
Slide 19: Performance Highlights
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 19
Slide 20: Demonetisation led boost in digital channels continues
Demonetisation led boost in digital channels continues Transaction Mix* Transaction Volume Growth (YOY) Digital 58% 66% 100% 87% 51% 52% 54% 80% ATM 60% 36% 38% 36% 34% 23% 40% 21% Branches 20% 19% 13% 13% 12% 12% 0% -20% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 -17% Digital ATM Branch Q4FY16 Q1FY17 Q2FY1
Slide 21: Network expansion continues at a steady pace
Network expansion continues at a steady pace New Branches Opened Employee Strength 13% YOY 154 56,762 56,617 56,098 99 102 100 105 93 52,398 62 50,135 31 - Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Branch Mix* ATMs 2,904 3,006 3,106 3,211 3,304
Slide 22: Retail Lending growth remains healthy
Retail Lending growth remains healthy All figures in ` Crores Retail Advances 21% YOY Retail as % of Advances 167,993 45% 143,159 149,284 149,538 41% 138,521 40% 38% 33% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Retail Advances Mix Home Loans, Others, 10% 44% • Sourcing s
Slide 23: Most of the Retail Loan segments impacted by demonetisation have seen an improvement
Most of the Retail Loan segments impacted by demonetisation have seen an improvement Disbursals in Home Loans have seen sharp Disbursements to Microfinance rebound in Q4 and Other Segments have improved 34% 32% 31% 27% 18% 19% 22% 14% 13% 12% 7% 6% 5% 4% 2% Total Retail Auto Loans CV Loans Personal
Slide 24: Transactions and payments businesses maintain momentum
Transactions and payments businesses maintain momentum All figures in Mn Credit Cards - Cards In Force Debit Cards - Cards In Force 39% YOY 30% YOY 3.3 20.2 3.1 18.5 2.8 16.8 2.6 15.5 16.3 2.4 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Cards Spends Strong positioning in th
Slide 25: Performance Highlights
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 25
Slide 26: Slippages continued to be lower than peak levels
Slippages continued to be lower than peak levels All figures in ` Crores Movement in Gross and Net Slippages Movement in Credit Cost* in the quarter 8,772 4.09% 3.61% 7,699 4,811 4,560 1.98% 3,638 1.73% 3,498 4,210 1,474 0.69% 2,008 FY17 Credit Cost is at 2.82% 694 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17
Slide 27: Trend in Gross and Net NPAs
Trend in Gross and Net NPAs Gross NPA and Watch List (WL) Net NPA All figures in ` Crores WL 6.2% 2.18% 2.11% 5.22% 2.02% 5.4% 5.04% 4.17% 3.5% 1.08% GNPA 2.54% 2.8% 0.70% 1.67% 2.2% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Net Restructured Assets Non-Retail advances und
Slide 28: Trend in Watch List slippages
Trend in Watch List slippages All figures in ` Crores Watch List Outstanding WL slippages and Cumulative Slippages in Corporate Lending 22,628 Dissolution Rate 20,295 FB Outstanding 8% 11% 17% 70.0% 7,288 8,000 30% 13,789 58.3% 60.0% 51.0% 7,000 11,091 6,000 9,436 50.0% 39.1% 5,000 40.0% 3,566 4,000
Slide 29: Sectoral composition of Watch List
Power 60% Iron & Steel AAA 7% Oil and Gas 7% AA Cement 6% Infrastructure 5% Construction A Engineering 4% (by value) Top 10 Sectors Internal Rating Mix Infrastructure 4% Roads BBB Construction Sectoral composition of Watch List other than 4% Infrastructure < BBB or Shipping 2% Unrated 100% Industria
Slide 30: Trend in non Watch List slippages
Trend in non Watch List slippages All figures in ` Crores 84% of Corporate Slippages in FY17 have come from WL Net Slippages# outside WL 1,631 16% 818 Watch List (WL) 411 413 84% Q1FY17 Q2FY17 Q3FY17 Q4FY17 # before write-offs Most of the increase in net non WL slippages has Corporate Slippages (non
Slide 31: The Long term average credit cost at the Bank has been 94 bps
The Long term average credit cost at the Bank has been 94 bps Credit cost Trend in Credit Cost : FY03 to FY17 4.09% 3.61% 1.98% 1.73% 2.82% 0.69% 2.30% Credit Cost (excluding WL) for FY17 = 1.46% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 1.35% 0.99% 1.11% 1.11% Long Term Average* = 94bps 0.50% 0.61% 0.70%
Slide 32: Movement in NPA's
Movement in NPA’s All figures in ` Crores Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Gross NPAs - Opening balance A 5,724 6,088 9,553 16,379 20,467 Fresh slippages B 1,474 3,638 8,772 4,560 4,811 Upgradations & Recoveries C 780 140 1,073 350 2,804 Write offs D 330 33 873 122 1,194 Gross NPAs - closing balan
Slide 33: Rating profile remains stable
Rating profile remains stable Corporate Lending SME Lending 7% 6% 7% 7% 6% 12% 12% 12% 11% 12% 14% 14% 13% 14% 14% 20% 22% 22% 25% 25% 30% 30% 29% 27% 29% 63% 63% 64% 64% 64% 26% 20% 22% 23% 22% 8% 8% 8% 8% 9% 16% 15% 14% 12% 12% 8% 9% 8% 7% 7% Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Mar-16 Jun-16 Sep-16
Slide 34: Top 10 Industry concentration remains stable
Top 10 Industry concentration remains stable All figures in ` Crores Industry Concentration1 (% of total outstanding) Outstanding as on March 31, 2017 Rank Sectors Iron & Steel Power Fund- Non-fund based based 1. Financial Companies2 24,114 17,031 5.8% 5.6% 2. Infrastructure Construction3 20,094 13,
Slide 35: Performance Highlights
Performance Highlights Growth Earnings Quality Retail Franchise Asset Quality Other important information 35
Slide 36: Treasury Portfolio and Non-SLR Corporate Bonds
Treasury Portfolio and Non-SLR Corporate Bonds Investment Bifurcation Book Value* (` Crore) Category Proportion Modified Duration* Government Securities1 93,008 Held Till Maturity (HTM) 63% 6.23 Years Corporate Bonds2 26,667 Others 9,118 Available For Sale (AFS) 34% 3.79 Years Total Investments 128,
Slide 37: Bank continues to lead the league tables in Debt Capital Markets
Bank continues to lead the league tables in Debt Capital Markets All figures in ` Crores Key Highlights Placement & Syndication of Debt Issues Acted as arranger for some of the major PSUs 61% YOY and Corporates during the quarter. Ranked No. 1 arranger for rupee denominated 199,620 bonds as per
Slide 38: We have a small, strategic international network
We have a small, strategic international network UK3 Shanghai1 DIFC1,Dubai2 Dhaka2 HongKong1 & Abu Dhabi2 Colombo1 Singapore1 1 – Overseas Branches; 2 – Overseas Representative offices; 3 – wholly-owned subsidiary Trend in overseas total assets (USD bn) Value Proposition Wholesale Banking solution
Slide 39: Shareholding Pattern (as on March 31, 2017)
Shareholding Pattern (as on March 31, 2017) General Insurance Others Corp & Others 10.14% 3.45% Foreign Institutional Investors Life Insurance 48.24% Corporation 13.83% SUUTI 11.48% GDR's 4.54% Indian Institutions 8.32% Share Capital `479 crores Shareholders’ Funds `55,763 crores Book Value Pe
Slide 40: Some of the major awards won by the Bank during the year
Some of the major awards won by the Bank during the year Best among Large Banks for Digital Banking, Analytics Bank of the Year in India & Big Data – The Banker Awards 2016 Best Bank Award 2016 Excellence in Corporate Best Digital Bank 2016 Best Domestic Bank in Social Responsibility Business Today-
Slide 41: Thank You
Thank You 41