Sammaan Capital Ltd · NSE:SAMMAANCAP
Sammaan Capital — Indiabulls Housing Finance — Merger or Acquisition (April 2019)
15 slides from Sammaan Capital's merger presentation, Apr 5, 2019
Slide 1: Presentation on Merger of Lakshmi Vilas Bank with Indiabulls Housing Finance
Date: April 5, 2019 Scrip Code - 535789 IBULHSGFIN/EQ BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, “Exchange Plaza”, Bandra-Kurla Complex, Dalal Street, Bandra (East), MUMBAI – 400 001 MUMBAI – 400 051 Dear Sir, Sub: Presentation on Merger of Lakshmi Vilas Bank wit
Slide 2: Indiabulls Housing Finance Limited and Lakshmi Vilas Bank Merger Announcement
Indiabulls Housing Finance Limited and Lakshmi Vilas Bank Merger Announcement
Slide 3: Contents
Contents Pg. No. 1. Transaction Details 03 2. Precedents and Regulation 04 3. Strong Regulatory Framework: No Dispensation Required 05 4. LVB Today 06 5. IBH Today 07 6. Amalgamated Entity Financials 08 7. Merger Rationale 09 8. Eligibility for Banking License 10 9. Track Record of Managing and Grow
Slide 4: Transaction Details
Transaction Details Merger of LVB with Lakshmi Vilas Bank [LVB] to amalgamate into Indiabulls Housing Finance [IBH] subject to IBH RBI and other regulatory & statutory approvals Share swap ratio of 0.14:1 [14 shares of IBH will be given for every 100 shares of LVB] has been agreed Swap Ratio upon by
Slide 5: Precedents and Regulation
Precedents and Regulation Announced: Jan 2019 Gruh Finance Bandhan Bank [HFC] Received regulatory approval Balance Sheet: ₹ 20,000 Crs Balance Sheet: ₹ 47,000 Crs from RBI Capital First IDFC Bank Announced: Jan 2018 [NBFC] Balance Sheet: ₹ 29,500 Crs Balance Sheet: ₹ 1,23,250 Crs Amalgamated: Dec 20
Slide 6: Strong Regulatory Framework: No Dispensation Required
Strong Regulatory Framework: No Dispensation Required • By becoming a bank, IBH is voluntarily submitting itself to come under the direct banking supervision of RBI for all its existing and future businesses • Capital Adequacy Ratio: Amalgamated Regulatory IBH LVB Entity Requirement Capital Adequacy
Slide 7: LVB Today
LVB Today Loan Advances ₹ 24,123 Crs Deposits ₹ 30,787 Crs CASA ₹ 7,036 Crs CRAR: 7.7% Capital Adequacy Ratio Tier 1: 5.6% Profits [9MFY19] Losses of ₹ 630 Crs GNPA: 13.9% Asset Quality NNPA: 7.6% Depositors and Account Holders 21,86,891 Loan Customers 1,86,112 Employees 4,881 569 branches in 150 to
Slide 8: IBH Today
IBH Today Net Worth ₹ 17,792 Crs Increased 69% in last three years Total Loan Assets ₹ 1,24,271 Crs 7-year CAGR: 26% 9MFY19: ₹ 3,084 Crs Profitability [PAT] 7-Year CAGR: 26% FY18: ₹3,847 Crs Spread 3.46% In line with spreads of other private Indian banks Asset Quality GNPA: 0.79%; NNPA: 0.59% GNPAs
Slide 9: Amalgamated Entity Financials
Amalgamated Entity Financials As on December 31, 2018 Amalgamated Entity Net Worth [₹ Crs] 19,472 Loan Book [₹ Crs] 1,23,393 Operating Profit [₹ Crs] 4,630 9MFY19 Net Profit [₹ Crs] 2,455 Capital Adequacy Ratio 20.6% Tier 1 14.4% Return on Assets [Annualized] 2.0% Return on Equity [Annualized] 19.2%
Slide 10: Merger Rationale
Merger Rationale Banking business: • Access to stable, low-cost funding in the form of public deposits • Expanded distribution franchise leading to broader customer base and diverse product portfolio Geographical and product diversification, with cross-sell opportunities: • IBH’s presence in north a
Slide 11: Eligibility for Banking License
Eligibility for Banking License [As per guidelines for ‘on tap’ licensing of Universal Banks in the Private Sector, August 1, 2016] Eligible Promoters • All board members nominated by resident Indians on the NBFCs/HFCs controlled by residents “Nomination and Remuneration Committee” • Successful trac
Slide 12: Amalgamated Entity Parameters
Amalgamated Entity Parameters Minimum Voting Equity Capital Requirements and Shareholding Pattern Proforma net worth of the amalgamated entity would be ₹ 19,472 Crs Minimum net worth of ₹ 500 Crs at all times at end of Dec 2018 Minimum CAR of 13% of its risk weighted assets [RWA] for a minimum Capit
Slide 13: Track Record of Managing and Growing OakNorth Bank, a Commercial Bank in the UK
Track Record of Managing and Growing OakNorth Bank, a Commercial Bank in the UK Performance of Bank • Within three years of operations, OakNorth Bank’s deposits have risen to ₹ 11,357 Crs and lending facilities to ₹ 21,390 Crs • The loan book has a gross yield of 8.2%, cost of funds of 1.8% and NIM
Slide 14: Steps of the Transaction
Steps of the Transaction Share Issuance Regulatory filings and Filing of the approvals scheme and NCLT approval Stakeholder’s Approval Necessary RoC filing post the approvals from final approval the Reserve Bank from the Reserve Board Resolution Scheme would be Bank of India of India, implem
Slide 15: Thank You
Indiabulls HOUSING FINANCE Thank You 14
Indiabulls Housing Finance — Merger or Acquisition (April 2019) on 6ix