Axis Bank Limited · NSE:AXISBANK
Axis Bank — Investor Presentation (November 2011)
28 slides from Axis Bank's investor presentation, November 2011
Slide 1: Aiming at Balanced Growth
Aiming at Balanced Growth November 2011
Slide 2: Contents
Contents Key Macro Trends Business Model Financial Snapshot 1
Slide 3: Contents
Contents Key Macro Trends Business Model Financial Snapshot 2
Slide 4: India Opportunity
India Opportunity High Savings rate Favourable demographics Robust GDP growth Underpenetrated banking sector GDP % Growth 60000 12% 50000 10% ( Rs in billion) 40000 8% 30000 6% 20000 4% 10000 2% 0 0% 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Source: IMF, RBI, Govt of India 3
Slide 5: Key Opportunities for Banking Sector
Key Opportunities for Banking Sector Rapid urbanisation Private Investment in Infrastructure 590 100% 6000 (Twelfth Plan) 340 80% 5000 Public Private 290 ( Rs in billion) 220 60% 4000 40% 3000 750 815 880 636 20% 2000 0% 1991 2001 2008 2030 1000 Rural population (mn) Urban population (mn) 0 Urban GD
Slide 6: Contents
Contents Key Macro Trends Business Model Financial Snapshot 5
Slide 7: Evolution of Axis Bank's Business Model
Evolution of Axis Bank’s Business Model Phase 3: FY 10 onward • Predictable, consistent profitable growth • Reduced risk concentration • Increase share of customer wallet • Improve operating leverage • Above industry growth Phase 2: FY 04 – 09 • Developed CASA franchise • Fee income – diversity in r
Slide 8: Axis Bank Overview
Axis Bank Overview Snapshot for the period ended 30th September 2011 Business Mix H1 FY12 (%) `2,506.11 billion Total Assets (1) (US$ 51.17 billion) Loans `1,400.89 billion Net Loans (1) (US$ 28.60 billion) `1,944.55 billion Total Deposits (1) (US$ 39.70 billion) Net Worth as on `200.74 billion 30.0
Slide 9: Business Strategy Along Four Key Themes
Business Strategy Along Four Key Themes Leveraging Domestic Growth Opportunities Leverage strengths in Continue to build and Corporate Banking & strengthen Retail Infrastructure linked Banking franchise Financial services Capture end-to-end Build a full-service opportunities in offering to SME Payme
Slide 10: Multi-channel Presence Pan-India
Multi-channel Presence Pan-India Integrated channel strategy No. of branches & Extension counters • Customer convenience and cost Rural Semi-urban Urban Metro effective customer delivery 116 121 • Advanced use of technology 64 448 470 Branches 44 255 22 186 450 457 137 Call centre ATMs 377 263 314 C
Slide 11: Full Suite Of Products To Leverage Retail Liabilities Franchise
Full Suite Of Products To Leverage Retail Liabilities Franchise Utility Bill, School Fee Payments ECS Mandates & NEFT/RTGS Channels Payment Spends through cards Solutions Online Tax Payments IPOSmart Branch Debit Cards Credit Cards Cards Prepaid Cards Door to all ATM Travel Currency & Gift Cards Ban
Slide 12: Recognition for High Quality Customer Service
Recognition for High Quality Customer Service Hindustan Times – MARS Banking Satisfaction study 2010 This independent survey covered 18 Cities and 9,486 bank account holders across India 11
Slide 13: Healthy Net Interest Margins and Robust NII Growth
Healthy Net Interest Margins and Robust NII Growth Net Interest Margin (%) Net Interest Income (` Crore) 12
Slide 14: Corporate Bank: Originate and Distribute Model
Corporate Bank : Originate and Distribute Model Corporate Banking: A key driver End to End Infrastructure Player of overall bank performance Investment Non-Bank Business Agri & Credit Syndication Treasury Banking Units Banking Others 12% Debt Private Placement League Table Loan syndication market sh
Slide 15: Full-service offering to SME customers
Full-service offering to SME customers Lending Other offerings • Diversified portfolio across 3 segments: • Commercial banking products Medium Enterprises Group, Small - Current accounts, forex, trade Enterprises Group and Supply Chain services Finance • Retail banking solutions • Driven through 32
Slide 16: Credit Profile
Credit Profile Rating distribution of Large and Mid-corporate Loans1 (%) Proportion of secured loans AAA AA A BBB <BBB or unrated 1 5 7 7 10 22 22 18 25 24 86.6% 84.5% 83.8% 81.7% 58 54 47 43 42 15 16 3 22 3 23 24 4 2 3 Mar'08 Mar'09 Mar'10 Mar'11 Sep'11 Rating distribution of SME loans1 (%) SME 1 S
Slide 17: Payments Solutions Across Government, Corporate and Business Segments
Payments Solutions Across Government, Corporate and Business Segments • Leading player in Electronic Benefit Transfer (EBT) through Smart Cards under IT Enabled FI Model Continue to • Leading Bank in G2B e-Governance initiatives capture end to end payment • Amongst select set of Indian banks offerin
Slide 18: Impact of Recent Regulatory Changes
Impact of Recent Regulatory Changes • Continue to differentiate on strong distribution, brand, Deregulation of SB interest rates customer service and product offering • Remain focused on customer acquisition, deepening and cross-sell • Cluster approach for opening branches in Tier V and VI Branch li
Slide 19: Contents
Contents Key Macro Trends Business Model Financial Snapshot 18
Slide 20: Stable Deposit Base
Stable Deposit Base CASA and Retail term deposits (` crore) Composition of deposits Retail T erm Dep osits CASA CASA + Retail As on Savings accoun ts deposits 1,22,738 Deposits Term Deposits* Current accounts deposits 1,11,224 Mar’07 40% 57% 92,878 40,698 33,457 Mar’08 46% 64% 74,523 26,848 Mar’09 4
Slide 21: Margins Driven by Low Cost Deposits
Margins Driven by Low Cost Deposits Cost of funds (%) Net Interest Margin (%) Current and savings accounts deposits (` bn.) Low cost deposits ratio1 Savings account deposits Current 778 account 660 deposits 506 400 20 1 Defined as the ratio of Current and Savings bank deposits to Total deposits 2 CA
Slide 22: Diversified Fee Income Franchise
Diversified Fee Income Franchise Fee income (` bn) Fee profile (FY11) Fee Income as % of Operating Revenue 35.9% 34.1% 37.2% 32.7% 33.9% 1 CAGR is based on data of Fiscal 2006 to 2011 Note: Previous year’s figures have been restated where required 21
Slide 23: Industry-wise Distribution
Industry-wise Distribution Outstanding as on 30 Sept 2011 (%) Rank Sectors Non-fund Total Fund-based based 1. Financial Companies** 10.58 10.66 10.44 2. Power Generation & Distribution 9.23 5.05 16.62 3. Infrastructure* 9.23 7.08 13.02 4. Engineering & Electronics 6.53 3.34 12.15 5. Metal & Metal Pr
Slide 24: Asset Quality
Asset Quality Gross NPAs Net NPAs Net NPA (%) Amount ` in Crore Net NPA as at year-end 1,800 1,744 0.90% FY07 0.61% 1,599 1,573 FY08 0.36% 1,600 1,483 0.75% FY09 0.35% 1,400 1,362 FY10 0.36% FY11 0.26% 1,200 0.60% 1,000 Cumulative Restructured Assets: `2,410 0.45% crore (1.49% of gross customer asse
Slide 25: Capital Strength
Capital Strength Capital Adequacy Ratio (%) Total CAR and Tier-I CAR as on 30th Sept 2011 would have been higher by 85bp were H1 profits to be accounted for 24 24
Slide 26: Superior Track Record of Growth and Profitability
Superior Track Record of Growth and Profitability Source : Company annual reports Top 10 sample is based on ranking of banks by FY11 asset base 25
Slide 27: Summary
Summary • Combining growth & profitability – Gained market share and maintained above industry profitability – Diversified revenue streams – Strong retail deposit franchise – Robust asset quality • Aiming for balanced growth – Continue to build on key strengths of the franchise – Leverage customer r
Slide 28: Safe Harbor
Safe Harbor Except for the historical information contained herein, statements in this release which contain words or phrases such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “futu