IndusInd Bank Ltd. · NSE:INDUSINDBK
IndusInd Bank — Edelweiss Conference "India 2025: Another Tryst with Destiny" 2018
23 slides from IndusInd Bank's conference presentation, Feb 7, 2018
Slide 1: Regulation 30 disclosure cover letter to stock exchanges
Cir\i L65 i91 PN1 994PL.cO7G3:''1 Induslnd Bank February 7, 2018 The Asst. Vice President The Deputy General Manager Listing Department Corporatc llelationshiP DePt. National Stock Exchange of India Ltd. BSE Ltd. Exchange Plaza, 5t'' Floor I't Floor, New Trading Ring Plot No.C/l, G Block Rotunda Bui
Slide 2: Indian Banking at Inflection – Topical Themes
Edelweiss Conference “India 2025: Another Tryst with Destiny” Indian Banking at Inflection – Topical Themes February 07, 2018
Slide 3: Reforms Set to Expand the Banking Opportunity
Reforms Set to Expand the Banking Opportunity Serving the • Rural Banking Underserved Financialization of Savings • Demonetization & Digitization Formalization of Economy • Goods & Service Tax Current Banking • Bankruptcy Code Market 2 Note: Bubbles not to scale
Slide 4: Reforms Set to Expand the Banking Opportunity
Reforms Set to Expand the Banking Opportunity Serving the Underserved 1. Legislation well drafted and thought through Financialization of Savings 2. Time lines being adhered Formalization of 3. Haircuts?? Economy Current Banking • Bankruptcy Code Market 3 Note: Bubbles not to scale
Slide 5: Goods & Service Tax: Benefits far outweigh initial hiccups
Serving the • Rural Banking Underserved Financialization of Savings • Demonetization & Digitization Formalization of Economy • Goods & Service Tax: Benefits far outweigh initial hiccups Current • Bankruptcy Code Banking Market 4
Slide 6: GST in New Zealand – A Case in Point
GST in New Zealand – A Case in Point Pre-GST New Zealand (NZ) exhibited macro characteristics similar to India on inflation, fiscal deficit and rates NZ economy has improved consistently post implementation of GST in 1986. NZ today is one of the highest tax productive nations (GST Revenue / GDP
Slide 7: GST To Benefit Growth & Profitability of Banks
GST To Benefit Growth & Profitability of Banks Informal Economy – Demonetization addressed the stock while GST addresses the flow. Demonetization & GST driving Direct Tax triangulation; Direct tax collections for 9MFY18 up 18.2% GST to boost economic growth by additional 0.5% to 1% with a stab
Slide 8: Demonetization & Digitization: To Expand Banking & Para Banking
Serving the • Rural Banking Underserved Financialization • Demonetization & Digitization: of Savings To Expand Banking & Para Banking Formalization of Economy • Goods & Service Tax: Benefits far outweigh initial hiccups Current • Bankruptcy Code Banking Market 7
Slide 9: Financialization is Now a Virtuous Cycle
Financialization is Now a Virtuous Cycle Lower Inflation Lower Lower Govt Rates Borrowing Lower Need for Funding Inflation Economy Hedging Assets Banking & Para Banking Assets 8
Slide 10: Banks Are Natural Homes for Para-Banking Products
Banks Are Natural Homes for Para-Banking Products Private Life Insurers - New Business Premiums by Channel General Insurance – IBL A Large Distributor Corporate Brokers, Individual Agent (Non 3% agents Bancassurance Banks), 3% 2% 24% Direct and Direct Majority Others, Business 35% IBL 10% Banks, 54%
Slide 11: Para Banking – Manufacture or Distribute?
Para Banking – Manufacture or Distribute? What is attracting IndusInd management attention ? Preferred Approach High Low Capital Consumption Inorganic / JV Organic Gestation Period Inorganic / JV Organic Investment Size Issuance of Shares Cash Specialist Skills Inorganic / JV Organic / Bolt-on IBL
Slide 12: Rural Banking: Next Growth Frontier
• Rural Banking: Serving the Underserved Next Growth Frontier Financialization • Demonetization & Digitization: of Savings Taking Para Banking to Next Orbit Formalization of Economy • Goods & Service Tax: Benefits far outweigh initial hiccups Current • Bankruptcy Code Banking Market 11
Slide 13: The Urban / Rural Divide
The Urban / Rural Divide Household Details (2011 Census) Rural Urban 93% 81% 64% 65% 52% 55% 40% 31% 18% 11% House with Concrete House with Brick Walls Electricity Sanitation facility Cooking Gas Connection Roof within the premises Source: Houselisting and Housing Census Data Highlights - 2011 12
Slide 14: Government Schemes Are Bridging the Divide…
Government Schemes Are Bridging the Divide… Household Details (2011 Census) Rural Urban 93% 81% 64% 65% 52% 55% 40% 31% 18% 11% House with Concrete House with Brick Walls Electricity Sanitation facility Cooking Gas Connection Roof within the premises Pradhan Mantri Awas Saubhagya Swachh Bharat Ujjwa
Slide 15: … And Are Well Executed
… And Are Well Executed Average Daily Rural Roads Constructed Expenditure on Rural Development Schemes (km) (Rs cr) 156 1,05,448 2.1x 95,099 2.4x 130 77,321 100 100 67,263 58,630 50,162 66 69 FY13 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17 FY18 (E) (Target) Source: Ministry of Rural Developme
Slide 16: Union Budget 2018-19 Promises More
Union Budget 2018-19 Promises More Increasing Farm Income – Minimum Support Price for major crops at 1.5x the cost of production National Health Protection scheme – Health insurance for 100 mn rural households; Pilot of Rs 20 bn to be ramped up in subsequent years. Swachh Bharat Mission – targ
Slide 17: Rural India Under-served for both Assets & Liabilities
Rural India Under-served for both Assets & Liabilities Credit by Population Category Deposits by Population Category Rural, 10% Rural, 7% Semi-Urban, 11% Semi-Urban, 16% Metropolitan, 52% Metropolitan, Urban, 15% 67% Urban, 21% 16 Source: RBI, Data as of March 2017
Slide 18: Rural Bankability is Improving
Rural Bankability is Improving Enablers in Place to Serve the Un-served and the Under-served Building Blocks of “Rural Stack” Government Schemes / Reforms • Credit Bureau Coverage • Pradhan Mantri Awas Yojana – Housing for all by 2022 • Mobile Penetration • Soubhagya Scheme – Electrification of all
Slide 19: Rural Opportunity >3x the Current Market
Rural Opportunity >3x the Current Market Rural India HouseHolds: 168 mn Less: Accessibility: 20%; Credit Rejection: 20% Balance HouseHolds: 100mn Average HouseHold Borrowing: Rs 1,50,000 Average Outstanding Credit Per Account (Rs mn) Rural Credit Market (Rs. Trillion) 1.07 15.0 0.47 5.3 0.15
Slide 20: IndusInd Being Positioned to Harness the Opportunity
IndusInd Being Positioned to Harness the Opportunity • Over 1,700 IBL + BFIL Rural Branches • Assets: Microfinance, Home Improvement, 2-Wheeler, Consumer Durable Finance • Access to 1,00,000+ Villages • Liabilities: Saving A/C, Recurring Deposits • Doorstep Delivery Network Products • Services: DBT,
Slide 21: Pilots Validating Retail Distribution Service Point Model (RDSP)
Pilots Validating Retail Distribution Service Point Model (RDSP) 20
Slide 22: Thank You
Thank You
Slide 23: Disclaimer
Disclaimer This presentation has been prepared by IndusInd Bank Limited (the “Bank”) solely for information purposes, without regard to any specific objectives, financial situations or informational needs of any particular person. All information contained has been prepared solely by the Bank. No in
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