Idfc First Bank Ltd. · NSE:IDFCFIRSTB
Idfc First Bank — Q4 FY2019 Earnings Presentation
58 slides from Idfc First Bank's earnings presentation, May 10, 2019
Slide 1: Investor Presentation Q4FY19 filing letter
~ IDFC FIRST E.J Bank IDFCFIRSTBANK/SD/SE/046/2019-20 May 10, 2019 The Manager-Listing Department The Manager-Listing Department National Stock Exchange of India Limited BSE Limited Exchange Plaza, Phiroze Jeejeebhoy Towers, Sandra Kurla Complex, Sandra (East) Dalal Street, Fort, Mumbai -400 051. Mu
Slide 2: Corporate Presentation - FY19
~ IDFCFIRST EJ Bank Corporate Presentation - FY19
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by and is the sole responsibility of IDFC FIRST Bank (together with its subsidiaries, referred to as the “Company”). By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute or form
Slide 4: Table of Contents
4 SECTION 1: FOUNDING OF IDFC FIRST BANK 12 SECTION 2: PATH AHEAD SECTION 3: PERFORMANCE HIGHLIGHTS Table 18 of SECTION 5: ASSETS 21 Contents 28 SECTION 6: LIABILITIES 32 SECTION 7: FINANCIALS 35 SECTION 8: DIRCETORS & SHAREHOLDERS
Slide 5: Section 1: The Founding of IDFC FIRST Bank
SECTION 1: The Founding of IDFC FIRST Bank
Slide 6: IDFC FIRST Bank is founded by the merger of IDFC Bank and Capital First
SECTION 1: FOUNDING OF IDFC FIRST The Founding of IDFC FIRST Bank.. BANK IDFC FIRST Bank is founded by the merger of Erstwhile IDFC Bank and Erstwhile Capital First on December 18, 2018. 5
Slide 7: The Founding of IDFC FIRST Bank
SECTION 1: FOUNDING OF IDFC FIRST The Founding of IDFC FIRST Bank.. BANK EVENTS LEADING TO THE MERGER in January 2018- At IDFC Bank side. IDFC Limited was set up in 1997 to finance infrastructure focusing primarily on project finance and mobilization of capital for private sector infrastructure deve
Slide 8: The Founding of IDFC FIRST Bank.. Contd.
SECTION 1: FOUNDING OF IDFC FIRST The Founding of IDFC FIRST Bank.. Contd. BANK EVENTS LEADING TO THE MERGER in January 2018- At Capital First side Around the same time (2010-2017), while these events were playing out at IDFC Group, certain events were playing out in parallel at Capital First. Mr Va
Slide 9: The Founding of IDFC FIRST Bank
SECTION 1: FOUNDING OF IDFC FIRST The Founding of IDFC FIRST Bank BANK In January 2018, IDFC FIRST Bank and Capital First announced that they had reached an understanding to merge with each other and shareholders of Capital First were to be issued 139 shares of the merged entity for every 10 shares
Slide 10: IDFC Bank – Financial Trends leading to the merger
SECTION 1: FOUNDING OF IDFC FIRST IDFC Bank – Financial Trends leading to the merger BANK Loan Assets (Rs Cr) Networth (Rs Cr) 75,337 15,257 73,055 Net Interest Margin (%) 70,248 13% 14,678 14,776 11% 2.1% 4% 2.0% 1.9% 53,903 1.7% 1% 72% 70% 69% 13,633 90% 26% 20% 15% 9% Mar-16 Mar-17 Mar-18 Sep-18
Slide 11: Capital First – Financial Trends leading to the merger
SECTION 1: FOUNDING OF IDFC FIRST Capital First – Financial Trends leading to the merger BANK Assets Under Management (Rs Cr) Net Worth (Rs Cr) NIM (%) 32,622 Retail 2,928 26,997 9.60% 2,618 9.02% Wholesale 2,304 7.63% 8.01% 19,824 6.57% 16,041 1,704 91% 1,574 5.35% 4.86% 11,975 94% 1,172 9,679 961
Slide 12: Section 2: Path Ahead
SECTION 2: PATH AHEAD
Slide 13: Disclaimer
SECTION 2: PATH AHEAD Disclaimer Certain statements contained in this presentation that are not statements of historical fact constitute “forward- looking statements.” You can generally identify forward-looking statements by terminology such as “aim”, “anticipate”, “believe”, “continue”, “could”, “e
Slide 14: IDFC FIRST BANK - Path Ahead
SECTION 2: PATH AHEAD IDFC FIRST BANK - Path Ahead • Strong Systems and Processes • Strong Retail Franchise in niche • Strong Loan assets of more than Rs. segments with strong credit skills 104660 Cr • Launched retail liability operations. Opened 200 bank branches (Dec 18), • Track record of continu
Slide 15: Asset Strategy
SECTION 2: PATH AHEAD 1 Asset Strategy • Growth of Assets: • The Bank plans to grow the retail asset book from Rs. 36,236 Cr (December 31, 2018) to over Rs. 100,000 Cr in the next 5-6 years • The Bank plans to reduce the loans to infrastructure segments ( Rs. 22,710 as of 31 December 2018) as they m
Slide 16: Liability Strategy
SECTION 2: PATH AHEAD 2 Liability Strategy • CASA Growth: The key focus of the Bank would be to increase the CASA Ratio from 10.3% as of December 31, 2018 on a continuous basis year on year and strive to reach 30% CASA ratio with in the next 5-6 years, as well as set a trajectory to reach a CASA rat
Slide 17: Profitability
SECTION 2: PATH AHEAD 3 Profitability • Net Interest Margin: As the retail asset contribution moves towards 70% of the total fund assets, it is planned that the gross yield will continuously increase. Coupled with lower cost of funds (From improved CASA ratio), it is planned to expand NIM to about 5
Slide 18: Section 3: Performance Highlights
SECTION 3: PERFORMANCE HIGHLIGHTS
Slide 19: Snapshot of Key Parameters
Snapshot of Key Parameters SECTION 3: PERFORMANCE HIGHLIGHTS (As of 31 March 2019) Rs. 1,10,400 Cr 37% Rs. 140,462 Cr 12.9%, 6.5% Funded Assets Retail Assets/Total Borrowing & Deposits CASA Ratio Funded Assets (as % of Total Deposit, as % of Total Borrowing & Deposits) Rs. 18,159 Cr 2.4%, 1.3% 242 1
Slide 20: Snapshot of Financial Performance for the Quarter
Snapshot of Financial Performance for the Quarter SECTION 3: PERFORMANCE HIGHLIGHTS (For Q4 2019) • The Net Interest Income for the quarter ended on 31 March 2019 was Rs. 1,113 Cr which stood at Rs. 1,145 Cr for the quarter ended on 31 December 2018. • The Total Operating Income (net of Interest Cos
Slide 21: Snapshot of Financial Performance for the Year
Snapshot of Financial Performance for the Year SECTION 3: PERFORMANCE HIGHLIGHTS (For FY 2019) IDFC FIRST Bank is practically a new entity formed by the merger of Capital First and IDFC Bank. Hence the results for the Financial Year 2019 are not comparable either with IDFC Bank or with Capital First
Slide 22: Section 5: Assets
SECTION 5: ASSETS
Slide 23: Breakup of Loan Assets
SECTION 5: ASSETS Breakup of Loan Assets Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 (Erstwhile (Erstwhile (Erstwhile (Merged new entity (Merged new entity Funded Assets (In INR Cr) IDFC Bank) IDFC Bank) IDFC Bank) IDFC FIRST Bank) IDFC FIRST Bank) Retail Funded Assets 7,038 8,208 9,916 36,236 40,812 Rural 3
Slide 24: Retail Assets as a % of total Funded Assets has improved
Retail Assets as a % of the total Funded Assets has improved SECTION 5: ASSETS from 35% to 37% in the last Quarter All figures are in INR Crores unless specified 110,400* 104,660* 37% 35% 73,051 75,190 75,337 10% 11% 13% 54% 49% 74% 74% 72% 3% 4% 4% 4% 3% 12% 11% 11% 8% 12% Mar-18 Jun-18 Sep-18 Dec-
Slide 25: Spreads have increased from 3.6% to 3.7%
Spreads have increased from 3.6% to 3.7% from Q3FY19 SECTION 5: ASSETS to Q4FY19 3.7% 3.6% 1.7% 1.7% Jun-18 Sep-18 Dec-18 Mar-19 Note: The numbers for Q3-FY19 & Q4-FY19 are not comparable with numbers of earlier quarters. 24
Slide 26: Spreads have increased from 3.6% to 3.7%
Spreads have increased from 3.6% to 3.7% from Q3FY19 SECTION 5: ASSETS to Q4FY19 Particulars Jun-18 Sep-18 Dec-18 Mar-19 Yields 9.1% 9.4% 11.5% 11.7% Retail 15.7% 15.7% 16.6% 16.4% Wholesale Bank 9.1% 9.2% 9.5% 9.5% Corporate Banking 8.9% 9.0% 9.5% 9.9% Infrastructure 9.4% 9.4% 9.6% 9.0% PSL Buyout
Slide 27: Stressed Assets
SECTION 5: ASSETS Stressed Assets Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 In INR Cr (Erstwhile (Erstwhile (Erstwhile (Merged new entity (Merged new entity IDFC Bank) IDFC Bank) IDFC Bank) IDFC FIRST Bank) IDFC FIRST Bank) Stressed Assets 3,884 3,836 3,120 3,826 5,616 NPL 1,779 1,774 895 1,671 2,136 Other
Slide 28: Investments
SECTION 5: ASSETS Investments Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 In INR Cr (Erstwhile (Erstwhile (Erstwhile (Merged new entity (Merged new entity IDFC Bank) IDFC Bank) IDFC Bank) IDFC FIRST Bank) IDFC FIRST Bank) CRR 3,124 3,089 3,081 3,510 4,166 SLR 16,334 16,483 16,806 17,946 22,432 LCR / Others 1
Slide 29: Section 6: Liabilities
SECTION 6: LIABILITIES
Slide 30: Borrowings and Deposits
SECTION 6: LIABILITY Borrowings and Deposits In INR Cr Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Borrowings 36,483 34,671 37,844 57,403 53,440 Other Short Legacy Long Term Bonds 21,405 18,909 18,632 16,385 15,752 Term, 12% CASA, 6% Infra Bonds 10,434 10,434 10,434 10,434 10,434 Term Other Borrowings 4,644
Slide 31: Trend of Retail Deposits
SECTION 6: LIABILITY Trend of Retail Deposits (Retail CASA & Retail Term Deposits) All figures are in INR Crores unless specified Retail CASA & Retail Deposits As a % of Total Borrowings & Deposits 9.41% 13,214 7.97% 8.90% 10,400 9,008 6.89% 8,769 5.40% 7,004 5,693 7,605 6,453 4,970 4,107 3,437 1,66
Slide 32: Presence across the country, branch network of 242
The combined entity has presence across the length and SECTION 4: DISTRIBUTION breadth of the country, expanding its branch network to 242 Urban Bank Branches 133 Rural Bank Branches 109 ATMs 141 Asset Service Branches 102 (Erstwhile Capital First Branches) Rural BC Branches (IFBL) 354 Other BC Bran
Slide 33: Section 7: Financial Statements
SECTION 7: FINANCIAL STATEMENTS
Slide 34: Income Statement
SECTION 7: FINANCIAL STATEMENTS Income Statement In INR Cr Jun-18 Sep-18 Dec-18 Mar-19 FY19 Interest Income 2,321 2,334 3,664 3,629 11,948 Interest Expense 1,831 1,883 2,519 2,516 8,749 Net Interest Expense 490 451 1,145 1,113 3,199 Fee & Other Income 103 118 301 334 856 Core Operating Income 593 56
Slide 35: Balance Sheet
SECTION 7: FINANCIAL STATEMENTS Balance Sheet In INR Cr Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Shareholders' Funds 15,257 15,438 14,776 18,376 18,159 Deposits 48,198 54,057 48,356 61,914 70,479 Borrowings 57,287 47,591 52,875 68,614 69,983 Other liabilities and provisions 5,778 5,934 7,248 8,012 8,563 T
Slide 36: Section 8: Directors & Shareholders
SECTION 8: DIRECTORS & SHAREHOLDERS
Slide 37: V Vaidyanathan, Managing Director & CEO
SECTION 8: BOARD & SHAREHOLDERS V Vaidyanathan, Managing Director & CEO Mr. V. Vaidyanathan is the first Managing Director and CEO of IDFC FIRST Bank, a bank founded by the merger of Capital First and IDFC Bank in December 2018. Prior to this role, he founded Capital First Limited by first acquiring
Slide 38: Board of Directors
SECTION 8: BOARD & SHAREHOLDERS Board of Directors DR. RAJIV B. LALL - PART-TIME NON-EXECUTIVE CHAIRMAN Dr. Rajiv Lall is the Non-Executive Chairman of IDFC Bank. He was the Founder MD & CEO of IDFC Bank from October 1, 2015 till December 18, 2018. Previously, he was the Executive Chairman of IDFC L
Slide 39: Board of Directors
SECTION 8: BOARD & SHAREHOLDERS Board of Directors DR.(MRS.) BRINDA JAGIRDAR - INDEPENDENT DIRECTOR Dr. (Mrs.) Brinda Jagirdar, is an independent consulting economist with specialization in areas relating to the Indian economy and financial intermediation. She is on the Governing Council of Treasury
Slide 40: Current Shareholding Pattern
SECTION 8: BOARD & SHAREHOLDERS Current Shareholding Pattern Scrip Name : IDFC FIRST Bank (BSE: 5394437, NSE:IDFCFIRSTB) Key shareholders % Holding Trusts and Other Body IDFC Financial Holding Company Limited 40.00 Clearing Corporate, Members, PRESIDENT 3.3% Warburg Pincus through its affiliated ent
Slide 41: Capital First business model and profitability trends
Since Capital First business model and profitability trends will form an important part of the new business trajectory, we present to you the business model and financial trends of Capital First Limited. These slides are essentially an extract of the last official investor presentation of Capital Fi
Slide 42: History of Capital First Limited
History of Capital First Limited The Company was first listed on Stock Exchanges in January 2008. Between 2010 to 2012, Mr Vaidyanathan acquired a stake in the company and executed a Management Buyout (MBO) of the Company with equity backing of Rs. 810 Crore from Warburg Pincus, and created a new br
Slide 43: History of Capital First Limited
History of Capital First Limited From 31-March-2010 to 31-Mar-2018, the company has transformed across all key parameters including: • The total Capital has grown from Rs. 691 Cr to Rs. 3,993 Cr • The Assets under Management increased from Rs. 935 Cr to Rs. 26,997 Cr • The retail Assets Under Manage
Slide 44: Eight years of financing entrepreneurs, MSMEs and consumers through technology
Over the last Eight years the company has consistently stayed with the founding theme of financing self-employed entrepreneurs, MSMEs and consumers through the platform of technology & has grown the retail franchise * As per Ind - AS Rs. 32,622 Cr* A highly diversified portfolio across 600 industr
Slide 45: Growth in Retail Assets
Growth in Retail Assets The company’s product launches have been highly successful in the marketplace and the company has emerged as a significant player in Indian retail financial services within eight years of inception with the Retail Loan Book crossing Rs. 29,625 Crores (USD 4.06 bn) Rs. 29,625
Slide 46: Financing to underserved segments
Capital First provided financing to select segments that are traditionally underserved by the existing financing system Traditionally these end uses are underserved by the financial system as ticket sizes are small, credit evaluation is difficult, collections is difficult, and business is often unvi
Slide 47: MSME Financing – A key area of Focus
MSME Financing – A key area of Focus Capital First has emerged as a Specialized Player in financing MSMEs by offering different products for their various financing needs Typical Loan Ticket Size From CFL Typical Customer Profile To Small and Medium Entrepreneurs financing based on customised cash f
Slide 48: Key Product Offerings
Key Product Offerings Average Loan Average Average Loan Challenges Products Key Features Ticket Size Loan Tenor to Value Ratio (Rs.) (Months) (%) CFL provides long term loans to MSMEs after proper Evaluation of cash flows is a key 7,400,000 60* 45% evaluation of cash flows. challenge for credit appr
Slide 49: Rigorous Credit Underwriting Process
Rigorous Credit Underwriting Process helps in maintaining high asset quality In the Mortgages business at Capital First, about 38% of the total applications are disbursed after passing through several levels of scrutiny and checks, mainly centred around cash flow evaluation, 2-3 ✘ credit bureau and
Slide 50: Reputed marquee FIIs and DIIs have invested in CFL
Reputed marquee FIIs and DIIs have invested in CFL Key Shareholders of Capital First Limited (as of 30 September 2018) Warburg Pincus, through its affiliate entities V. Vaidyanathan GIC, Sovereign Wealth Fund, Singapore 25.72% Government Pension Fund Global, Norway 35.52% Birla Asset Management, Ind
Slide 51: Assets Under Management quarterly growth
- 10,000 15,000 20,000 25,000 30,000 35,000 5,000 Q1-FY14 8,024 Q2-FY14 8,244 Q3-FY14 9,071 Q4-FY14 9,679 Q1-FY15 10,603 Q2-FY15 11,045 Q3-FY15 11,695 Q4-FY15 11,975 Q1-FY16 12,644 Q2-FY16 13,604 Q3-FY16 14,973 Q4-FY16 16,041 AUM (In Rs. Cr)-LHS AUM (In Rs. Cr)-LHS Q1-FY17 17,212 Q2-FY17 17,937 Q3-F
Slide 52: Profit After Tax has grown with improvement in Cost to Income
The Profit After Tax has grown steadily with improvement in Cost to Income ratio 120.0 90% PAT (In Cr) (LHS) OPEX to Income 104.6* 80% 101.5* 100.0 95.3 87.0 70% 78.3 80.0 60% 70.8 67.0 61.4 50% 60.0 57.6 47.5 49.2 40% 44.5 41.0 40.0 36.5 30% 33.1 29.8 29.9 27.0 20.8 20% 20.0 10.1 10% 5.5 7.2 - 0% Q
Slide 53: Yearly Profit Growth Trend
Yearly Profit Growth Trend.. Yearly Net Profit (Rs Cr) 327 239 206* 166 114 53 FY14 FY15 FY16 FY17 FY18 H1 FY19 *Figures for H1-FY19 are based on Ind AS and earlier periods are under Indian GAAP 52
Slide 54: Return on Equity has continuously improved
With enhanced business operations, the Return on Equity has continuously improved over the quarters… 14.51% 13.31% H1-FY18 All figures are annualised 11.93% FY18 10.14% 14.82% FY17 14.47% 14.46% 8.33% 14.08% FY16 4.93% 12.87% 13.06% FY15 12.49% 12.10% FY14 11.09% 11.20% 11.39% 11.46% 10.68% 10.29% 1
Slide 55: Market Cap grew more than 10X in the last 6 years
The Market Cap of the Company grew more than 10X in the last 6 years.. Market Capitalization Rs. 8,282 Cr# Rs. 7,628 Cr ($ 1,274 Mn) ($ 1,174 Mn) Rs. 6,096 Cr ($ 938 Mn) Rs. 3,937 Cr Rs. 3,634 Cr ($ 606 Mn) ($ 559 Mn) Rs. 1,478 Cr Rs. 1,152Cr ($ 227 Mn) Rs. 781Cr* ($ 177 Mn) ($ 120 Mn) 31-Mar-12 31-
Slide 56: Steadily increasing dividend pay-out every year
The Company has been steadily increasing dividend pay-out every year.. Dividend (as % of face value per share) 28% 26% 24% 22% 20% 18% 31-Mar-13 31-Mar-14 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 55
Slide 57: Returns have shown consistent growth over six years
With the increasing assets size, returns have shown a consistent growth over the last six years… FY13 FY14 FY15 FY16 FY17 FY18 CAGR AUM (Rs. Cr) 7,510 9,679 11,975 16,041 19,824 26,997 29% Total Income (Rs. Cr) 357.3 422.2 658.8 991.8 1,640.3 2,429.6 47% PAT (Rs. Cr) 63.1 52.6 114.3 166.2 238.9 327.
Slide 58: Thank You
THANK YOU IDFC FIRST Bank