IndusInd Bank Ltd. · NSE:INDUSINDBK
IndusInd Bank — Investor Presentation (May 2016)
23 slides from IndusInd Bank's investor presentation, May 31, 2016
Slide 1: Disclosure under Regulation 46 cover letter
CIN’ L65191PN1994PLC076333 Indusind Bank Date: May 31, 2016 The Asst. Vice President The Deputy General Manager Listing Department Corporate Relationship Dept. National Stock Exchange of India Ltd. BSE Ltd. Exchange Plaza, 5" Floor 1" Floor, New Trading Ring Plot No.C/1, G Block Rotunda Building, P.
Slide 2: New Growth Opportunities
New Growth Opportunities 31st May 2016
Slide 3: A Glimpse into Planning Cycle 4 (PC4)
A Glimpse into Planning Cycle 4 (PC4) 1. Rural Banking 2. Off Balance Sheet 3. Digitization 4. Niche Portfolios Each theme to contribute 10% - 15% of profits in PC4 2
Slide 4: 1. Rural Banking: The New Frontier
1. Rural Banking The New Frontier
Slide 5: Rural Banking – Holistic Approach To Serve Market
Rural Banking – Holistic Approach To Serve Market Agri Business Group • Agriculture value chain Rural Branches • Commodity financing • Savings Accounts, PMJDY • Corporate Agri-finance Inclusive Banking Group • Loan Against Rural Property • Microfinance lending via • Vehicle Finance Loans Business Co
Slide 6: Microfinance is a Secular Growth Opportunity
Microfinance is a Secular Growth Opportunity MFIs have grown at a CAGR of high 30s in MFI Loan Portfolio the last 5 years with high 4% ROAs Off Balance Sheet Loans Outstanding 64,546 Rs crore Future growth will be driven by 60,000 47,899 45,000 Higher penetration in Rural India – 33,565 Market
Slide 7: Risks in Microfinance are Abating
Risks in Microfinance are Abating State-wise Disbursals (FY16) Credit Cost of small dispersed “Livelihood” Others, 14% TN, 16% loans is very acceptable GJ, 4% Credit Bureaus have penetrated MFI sector KL, 5% KA, 13% and driving compliant credit behaviour BR, 5% MFIs are now diversified geograp
Slide 8: Technology is Efficiently Serving Remote Geographies
Technology is Efficiently Serving Remote Geographies Internet TSP IBL ESB VPN KYC Servers Mobile App Account Opening IBL TSP Biometric NPCI Switch Switch Authentication Cash CDMA In / Customer UIDAI Service Cloud Cash Out Point Micro ATM IBL TSP Switch Switch Card & PIN IBL Core Banking System Loan
Slide 9: 2. Off Balance Sheet: Facts & Myths
2. Off Balance Sheet Facts & Myths
Slide 10: Foreign Banks Played this Segment Best
Foreign Banks Played this Segment Best MNC Banks are withdrawing from India ! Ratio of off balance sheet exposure to on balance sheet is 10 X for MNC Banks compared to < 2 X for Indian Banks. Off balance sheet is a measure of success ! Requires investment in People, Products and Technology.
Slide 11: Off Balance Sheet is Key Driver of Corporate (and Consumer) X Sell
Off Balance Sheet is Key Driver of Corporate (and Consumer) X Sell Client Segments Transaction Banking Global Markets Group Corporate & Institutional Banking Commercial Banking Group Agri Finance Group Inclusive Banking Group Public Sector Group Financial Services Group Financial
Slide 12: Our approach to Off Balance Sheet Products
Our approach to Off Balance Sheet Products Key component of client RAROC plan, transactions approved individually Need to work different segments of client organization to generate business Risk evaluation & approval in exactly the same manner as balance sheet products All products have defi
Slide 13: Deconstructing notional principals
Deconstructing notional principals Notional FX Contract USD 100mn Potential Future Exposure Client Limit of USD 2 mn (2% CCF for < 1year FX contract) Credit RWA (for AAA counterparty) USD 4,00,000 Capital Required (10% CET I) USD 40,000 Income Required (at 25% RoE) USD 10,000 Customer Pricing 1 bip
Slide 14: 3. Digitization
3. Digitization
Slide 15: Digitization – Our Beliefs; Looking Beyond the Noise
Digitization – Our Beliefs; Looking Beyond the “Noise” Exponential increase in digital penetration – 3rd largest internet user base in India, smart phones outselling laptops, tablets Ingredients of a successful digital strategy: Mobile first strategy Focus on “digital” channels as core acros
Slide 16: Digitization – Strategy More Important than Technology
Digitization – Strategy More Important than Technology An integrated Digital Strategy can extract significant value via: Innovation as Service Differentiator Transformation to Online Offerings Partnering with the Digital Ecosystem Evolution to Online and Digital Channels Improved Decisio
Slide 17: Digitization – Partnering with Digital Ecosystem
Digitization – Partnering with Digital Ecosystem 11 Micro Finance Partners 16
Slide 18: Digitization – Latest IBL Offering
Digitization – Latest IBL Offering 17
Slide 19: 4. Niche Portfolios As a Growth Strategy
4. Niche Portfolios As a Growth Strategy
Slide 20: Niche Portfolios versus big bang mergers
Niche Portfolios versus big bang mergers Acquiring a Bank Portfolio Acquisition Selective portfolio acquisition to align with strategy Immediate synergies Creates scale upfront Positives Lift and drop approach Build a Bank via multiple niche portfolios Integration costs, distraction Ov
Slide 21: Niche Portfolios – what do we look for?
Niche Portfolios – what do we look for? Specialist and differentiated businesses Existing proven leadership & team Un-penetrated customer base Complementary distribution, capability, product or service Good asset quality Accretive to financial metrics in Year 1 Ability to scale with pr
Slide 22: Recent Transactions
Recent Transactions 200 crore Credit Card portfolio from Deutsche Bank Credit Cards Performance Number of Cards Card Spends Turned around a loss making business in 1 month 600 526 500 Adjacencies in Personal Loans & Commercial Cards. 400 Brand accretive – our plastic in our client wallets 30
Slide 23: Thank You
Thank You