Idfc First Bank Ltd. · NSE:IDFCFIRSTB
Idfc First Bank — Investor Presentation (March 2021)
30 slides from Idfc First Bank's investor presentation, March 2021
Slide 1: Investor Presentation – March 2021
Investor Presentation – March 2021
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by and is the sole responsibility of IDFC FIRST Bank Limited (the "Bank" or "IDFC Bank") (together with its subsidiaries, referred to as the “Group”). By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presen
Slide 3: Executive summary
Executive summary 1 1. FOUNDING OF IDFC FIRST BANK – Merger between erstwhile IDFC Bank and erstwhile Capital First in December 2018 2 2. ERSTWHILE IDFC BANK HISTORY AND TRACK RECORD – Demerged infrastructure portfolio from IDFC Limited into IDFC Bank 3 3. ERSTWHILE CAPITAL FIRST HISTORY AND TRACK R
Slide 4: Founding of IDFC First Bank
1. Founding of IDFC First Bank IDFC FIRST Bank was founded by the merger of Erstwhile IDFC Bank and Erstwhile Capital First on December 18, 2018 ▪ IDFC Bank was created by demerger of infrastructure lending business of IDFC Limited to IDFC Bank in 2015 ▪ IDFC Limited was set up in 1997 to finance in
Slide 5: Erstwhile IDFC Bank history and track record (pre-merger)
2. Erstwhile IDFC Bank history and track record (pre-merger) Post becoming a bank, IDFC Bank took early steps to diversify away from infrastructure Gross Funded Assets (INR bn) CASA Deposits (INR bn) Gross Funded Assets mix (1) 753 64 57 INR 753bn 702 709 Others Retail 11% 15% 524 21 4 Wholesale 74%
Slide 6: Erstwhile Capital First – history and track record (pre-merger)
3. Erstwhile Capital First – history and track record (pre-merger) Strong track record of loan growth, PAT growth, ROE growth, market cap growth and robust asset quality AUM (INR bn) Profit after tax (INR bn) AUM mix (1) 326 7.4 13.8 18.2 25.6 33.3 INR 326bn 270 3.3 Wholesale 198 2.4 160 2.1 9% 120
Slide 7: Strong corporate governance and experienced management team
4. Driven by strong corporate governance and excellence and led by an experienced management team with oversight from an eminent Board Experienced management team Sudhanshu Jain 17+ Madhivanan Balakrishnan 27+ CFO COO Last role: Dy. CFO - PAYTM e-commerce, Last role: Chief Technology Officer - CFO -
Slide 8: Executive summary
Executive summary 1 1. FOUNDING OF IDFC FIRST BANK – Merger between erstwhile IDFC Bank and erstwhile Capital First in December 2018 2 2. ERSTWHILE IDFC BANK HISTORY AND TRACK RECORD – Demerged infrastructure portfolio from IDFC Limited into IDFC Bank 3 3. ERSTWHILE CAPITAL FIRST HISTORY AND TRACK R
Slide 9: Building the right culture of trust, transparency and customer first
Foundation 5a. Building the right culture of trust, transparency and customer first is a foundation block for the bank Customer focused We put the customer’s interest first by putting ourselves in the customers’ situation and viewing things from their perspective Collaborative Innovative We develop,
Slide 10: The Bank offers a wide bouquet of loan products
Foundation 5b. The Bank offers a wide bouquet of loan products that have seasoned over the years Products offered across varied customer segments including consumers and MSMEs in different parts of India Loan Against Property Small Business Loans Consumer Durable Loans Home Loans Vehicle Loans Long
Slide 11: Wide product range for deposits, investments and insurance
Foundation 5b. (contd): Wide product range for deposits, investments and insurance IDFC First Bank provides wide range of products and services along with savings accounts, term deposit accounts, current accounts, wealth management, forex services, cash management services and insurance products (di
Slide 12: Customer friendly credit card launched in January 2021
Foundation 5b. (contd.) In keeping with our philosophy of customer first, a highly customer friendly credit card launched in January 2021 A Credit Card with a differentiated proposition IDFC First Bank Credit Cards customer friendly initiatives Customer friendly card launched by the Bank, keeping in
Slide 13: Expanding our pan-India footprint
Foundation 5c. Expanding our pan-India footprint Widespread distribution network (1) Branch Branch network network Jammu & Kashmir 576 Punjab 464 Chandigarh Uttarakhand Haryana Delhi 242 Rajasthan Uttar Pradesh 150 Bihar Assam Meghalaya Nagaland Jharkhand Gujarat Madhya Pradesh Tripura West Mar-18 M
Slide 14: Built a diversified and stable liabilities platform
Foundation 5d. Built a diversified & stable liabilities platform; proven ability to raise retail deposits at scale Increased retail deposits (INRbn) (1) Reduced wholesale deposits (INR bn) (2) Reduced certificate of deposits (INR bn) 273 288 584 238 227 189 197 339 132 71 67 57 Mar 18 Mar 19 Mar 20
Slide 15: Built a diversified and strong retail lending book
Foundation 5e. Built a diversified and strong retail lending book, top 10 borrowers’ concentration down to 6.3% of total funded assets Retail gross funded assets (INR bn) Wholesale (excl. infra) loan assets (INR bn) Infrastructure loan assets (INR bn) 667 322 268 573 270 215 408 245 232 148 116 70 M
Slide 16: Building digital capabilities for retail offering
Foundation 5f. Building digital capabilities for retail offering PORTFOLIO REVENUE MANAGEMEN ACCELERATION ▪ Cross sell/up-sell framework ▪ Behavioral scorecard T Portfolio Revenue ▪ Propensity scorecard ▪ Portfolio review management acceleration ▪ Hyper-personalization ▪ Retention calculator ▪ Next
Slide 17: New banking application with enhanced UI UX
Foundation 5f. (contd.) Recently launched new banking application with an enhanced UI UX – in Test & Learn Stage Dashboard Personal Finance Management Acquisition journeys Payments • Easy navigation – all • Curated narrations and • 2 click deposits • 3 click payment with auto- features in 2-3 clicks
Slide 18: Executive summary
Executive summary 1 1. FOUNDING OF IDFC FIRST BANK – Merger between erstwhile IDFC Bank and erstwhile Capital First in December 2018 2 2. ERSTWHILE IDFC BANK HISTORY AND TRACK RECORD – Demerged infrastructure portfolio from IDFC Limited into IDFC Bank 3 3. ERSTWHILE CAPITAL FIRST HISTORY AND TRACK R
Slide 19: Overall Bank - Gross and Net NPA, impact of COVID
6a. Overall Bank - Gross and Net NPA, impact of COVID 19 Long term Proforma Change Mar-19 Jun-19 Sep-19 Dec-19 pre COVID Average Dec-20 (bps) Dec-20 Gross NPA - Bank 2.43% 2.66% 2.62% 2.83% 2.63% 4.18% 155 Net NPA - Bank 1.27% 1.35% 1.17% 1.23% 1.25% 2.04% 78 Provision Coverage Ratio (%) 48% 50% 56%
Slide 20: Stressed accounts identified and provided for
6b. The Bank has identified the stressed accounts (not yet NPA) and has provided for them Exposure to stressed assets (INR bn) Client Description (INR bn) (31-Dec-20) O/S Exposure Provision PCR% Toll Road Projects in MH 9.0 1.5 17% PCR % 23% 49% 51% Thermal Power Project in Orissa 5.5 5.5 100% Toll
Slide 21: Retail Loans - Gross and Net NPA trends, impact of COVID 19
6c. Retail Loans - Gross and Net NPA trends, impact of COVID 19 Long term Proforma Change Mar-19 Jun-19 Sep-19 Dec-19 pre COVID Average Dec-20 (bps) Dec-20 Gross NPA - Bank 2.18% 2.32% 2.31% 2.26% 2.27% 3.88% 161 Net NPA - Bank 1.24% 1.14% 1.08% 1.06% 1.14% 2.35% 121 Provision Coverage Ratio (%) 43%
Slide 22: Underwriting, monitoring and collection capabilities for retail loans
6d. The Bank underwrites retail loans with lot of due diligence and rigour, drawing on experience and has built effective monitoring and collection capabilities 6a - Robust Underwriting Process 6b - Strong Monitoring Framework 6c - Efficient Collection Machinery (As applicable product wise) • Integr
Slide 23: Executive summary
Executive summary 1 1. FOUNDING OF IDFC FIRST BANK – Merger between erstwhile IDFC Bank and erstwhile Capital First in December 2018 2 2. ERSTWHILE IDFC BANK HISTORY AND TRACK RECORD – Demerged infrastructure portfolio from IDFC Limited into IDFC Bank 3 3. ERSTWHILE CAPITAL FIRST HISTORY AND TRACK R
Slide 24: Balance sheet
7. Balance sheet As at As at As at As at Particulars (INR bn) March 31, 2018 March 31, 2019 March 31, 2020 December 31, 2020 CAPITAL AND LIABILITIES Capital 34 48 48 57 Reserves and surplus 119 134 105 120 Deposits 482 705 651 843 Borrowings 573 700 574 408 Other liabilities and provisions 58 86 114
Slide 25: Income statement
7. Income statement Particulars (INR bn) FY18 FY19 FY20 9M FY20 9M FY21 Gross Interest Income 89 119 159 119 116 Interest Expense 71 87 102 78 66 Net Interest Income 18 32 56 41 50 Other Income 11 9 17 12 14 Operating Income 29 41 74 53 64 Operating Expense 17 33 54 39 45 Operating Profit 13 8 19 14
Slide 26: Profitability trend in the last 8 quarters
7. Profitability trend in the last 8 quarters Profit after Tax (INR bn) 0.7 0.9 1.0 1.3 (2.2) (6.2) (6.8) (16.4) Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 ▪ The Bank took provisions against the identified legacy wholesale accounts such as a housing finance company, a financial conglome
Slide 27: Growth in higher yield retail assets driving NIM expansion
7. Growth in higher yield retail assets coupled with increasing contribution from low cost retail deposits driving an accelerated NIM expansion Yield accretion driven by retail… …CASA growth driving down cost of funds… …resulting in accelerated NIM expansion Yields (%) Cost of deposits (%) and cost
Slide 28: High cost borrowing – cost and maturity profile
7. High cost borrowing – cost and maturity profile Potential to be replaced with low cost deposits as and when they mature Long Term Particulars (INR bn) Infra Bonds Other Bonds Refinance Total Legacy Bonds Upto Mar-21 - 16 4 1 21 FY 21-22 - 11 11 23 45 FY 22-23 15 - 19 31 65 FY 23-24 14 17 8 19 58
Slide 29: Strong capital position and liquidity buffers
7. Strong capital position and liquidity buffers provide a stable platform for growth going forward Net Worth (Shareholders’ Funds) (INR bn) Capital Adequacy Ratio (%) Avg. Liquidity coverage Ratio (1) CET 1 Regulatory requirement of CRAR Because of Profits during the last quarters and Tier II CAR R
Slide 30: In summary
8. In summary Established brand with growing presence across India Led by an experienced professional management team backed by an eminent Board Building a Retail lending model with experience of growth and profitability profitable, scalable and world class retail bank on the Strong liability franch