Hdfc Bank Limited · NSE:HDFCBANK
Hdfc Bank — Investor Presentation (March 2024)
55 slides from Hdfc Bank's investor presentation, Mar 6, 2024
Slide 1: Exchange filing cover letter
CIN: L65920MH1994PLC080618 HDFC Bank Limited, Email: shareholder.grievances@hdfcbank.com Zenith House, Website: www.hdfcbank.com Opp. Race Course Gate no. 5 & 6, Keshavrao Khadye Marg, Mahalaxmi, Mumbai- 400034 Tel.: 022 - 3976 0000 / 07 / 12 March 06, 2024 BSE Limited National Stock Exchange of Ind
Slide 2: HDFC Bank Presentation March 2024
Hi} HDFC BANK PRESENTATION March 2024
Slide 3: Table of Contents
Classification - Public Table of Contents 01 01 India macroeconomic overview 02 Company overview and key credit highlights CEO’s priorities 03 04 05 FY 2023 & Q3 FY 2024 – performance in context 05 ESG at HDFC Bank 06 Appendix 2 Classification - Public
Slide 4: Positioned for attractive macro variables
Positioned for attractive macro variables 3 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merged with HDFC Bank effective July 1, 2023. Prior period numbers are not comparable.
Slide 5: Compelling opportunities
MACRO ENVIRONMENT Compelling opportunities One of the fastest growing economies in the world – real GDP growth ~6.3%; rising affluence Credit growth mirroring GDP growth with a multiplier of ~2x Significant under penetration of credit – potential to extend credit to 400mn - 500 mn individuals1 GDP p
Slide 6: India is one of the fastest growing major economies
MACRO ENVIRONMENT India is one of the fastest growing major economies GDP has increased by ~6x in last two Making India the fifth-largest global Leading to Rising Affluence decades economy GDP, current prices (US$TN) GDP 2024E, Current prices (US$TN) GDP per capita, US$ at PPP 4.1 28.0 3.7 9,892 9,0
Slide 7: GDP growth to drive bank credit growth
CREDIT PENETRATION GDP growth to drive bank credit growth Banking sector credit growth has been ~2x the average Growing share of private banks in bank credit YoY GDP growth during FY10 to FY23 Credit growth rate for banks compared with GDP Category-wise share of credit growth rate (%) 100% Average Y
Slide 8: Company overview and key credit highlights
Company overview and key credit highlights 7 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merged with HDFC Bank effective July 1, 2023. Prior period numbers are not comparable.
Slide 9: HDFC Bank – At a Glance
AT A GLANCE HDFC Bank – At a Glance PROMINENCE REACH RESILIENCE CREDIT STRENGTH #1 93mn 2.0% Baa3 (Stable) Private sector bank in India1 Customer base ROA3 ~$131bn+ 8,091 18.4% BBB- (SACP: A-)4 Market capitalisation2 Banking branches Capital Adequacy 208k+ 22k+ 0.3% AAA (Stable) Employees Banking ou
Slide 10: Pan-India customer reach through a large distribution network
WIDESPREAD PRESENCE IS KEY Pan-India customer reach through a large distribution network Strong national footprint (branches) Reinvesting profits to continuously enhance branch network # of branches 7,183 7,821 7,860 7,945 8,091 18% 18% 18% 18% 18% 33% 34% 34% 34% 34% 20% 20% 20% 20% 20% 28% 28% 28%
Slide 11: Complete suite of products and services
PRODUCTS AND SERVICES Complete suite of products and services Retail Banking Wholesale Banking Treasury Commercial Banking Investment Banking Products/Segments Loan Products Deposit Products Other Products/Services • Auto Loan • Savings Accounts • Depository Accounts • Working Capital • Debt Capital
Slide 12: Overview of the Merger of HDFC Ltd. with HDFC Bank
OVERVIEW OF MERGER Overview of the Merger of HDFC Ltd. with HDFC Bank Merger Consummated with HDFC Ltd. • Merger consummated on 1st July 2023 • Key highlights: Incoming unique customers: 3mn ✓ Employees of erstwhile HDFC Ltd. have been Customers: 6mn successfully onboarded into appropriate roles in
Slide 13: Ubiquitous bank – HDFC Bank Story
FOUNDATION Ubiquitous bank – HDFC Bank Story Pan-India distribution network and Complete suite of products Growing customer base Best in Class technology Well diversified loan book; Proven ability to execute and Prudent and robust risk management Granular deposits strong financial performance with i
Slide 14: CEO's priorities
CEO’s priorities 13 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merged with HDFC Bank effective July 1, 2023. Prior period numbers are not comparable.
Slide 15: What we have – positioned to consistently create value
CEO’s PRIORITIES What we have – positioned to consistently create value What we have Create incremental value Priorities to drive Onboarding Employee first Harness people Growth capabilities strategy At-scale distribution Customer first The Next Customer 3-5 Years Customer Robust risk engagement servi
Slide 16: Employee – Customer – Technology
CEO’s PRIORITIES Employee – Customer – Technology Employees Customers Technology • ~200K empowered personnel as of • 93 million customers – Dec’23; • Technology investments driving Dec 2023 customers are the focal point and growth and efficiencies customer service our obsession • Culture Elevation;
Slide 17: 10 Pillars of growth
EXECUTING ON IDENTIFIED AREAS OF GROWTH 10 Pillars of growth Delivery of product Customer acquisition Relationship management and services Capturing flows of Digital Retail Expanding Technology Re-Imagining the Government and Marketing Assets Wealth and Digital branch channel Institutional (G&I) Man
Slide 18: FY 2023 performance in context
FY 2023 performance in context 17 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merged with HDFC Bank effective July 1, 2023. Prior period numbers are not comparable.
Slide 19: Long term consistent growth
PROVEN ABILITY TO EXECUTE Long term consistent growth Advances Rs. bn 16,142 13,805 11,433 10,027 8,273 10Y 6,643 4,676 5,586 CAGR 3,679 2,413 3,050 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Deposits Rs. bn 18,834 15,592 13,351 11,475 9,231 7,888 5,464 6,436 3,673 4,508 10Y 2,962 CAGR F
Slide 20: Consistent performance across cycles
PROVEN ABILITY TO EXECUTE Consistent performance across cycles Profit after tax ₹ bn 10Y CAGR 441 370 263 311 175 211 85 102 123 145 67 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Earnings per share Book value per share 502 FY23 Consolidated EPS: ₹ 83 79 FY23 Consolidated BPS: ₹ 519 433 6
Slide 21: Low and stable GNPAs across credit cycles
BEST IN CLASS ASSET QUALITY Low and stable GNPAs across credit cycles Cross cycle experience with stable asset quality (GNPA%) Gross advances GNPA % Rs. bn 6 18,000 16,142 5 16,000 14,000 4 12,000 3 10,000 6,643 8,000 2 6,000 2,413 4,000 1 1.1 1.0 2,000 0 - Mar'13 Mar'14 Mar'15 Mar'16 Mar'17 Mar'18
Slide 22: Balance sheet and capital productivity
PROVEN ABILITY TO EXECUTE Balance sheet and capital productivity Consistent growth in assets and RoA ₹ bn 40,000 2.1 1.9 2.0 2.0 1.9 1.9 1.9 1.9 2.0 2.0 2.0 30,000 20,000 10,000 - FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Assets RoA % Capital positioned for growth with consistent RoE 25
Slide 23: Robust Capitalization and Liquidity Metrics
ROBUST CAPITALIZATION Robust Capitalization and Liquidity Metrics The Bank’s continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 110% for the quarter ending December 31, 2023, well above the regulatory requirement Maintaining Capital Ratio beyond Regulatory
Slide 24: Key metrics for Q3 Dec'23
Key metrics for Q3 Dec’23 23 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merged with HDFC Bank effective July 1, 2023. Prior period numbers are not comparable.
Slide 25: Key performance metrics
Q3 FY 2024 Key performance metrics ➢ Advances growth ₹ 1.1 tr in the quarter (↑4.9%) ➢ Deposits increased ₹ 0.4 tr in the quarter (↑1.9%) ✓ Retail deposits grew ₹ 0.5 tr in the quarter (↑2.9%) ➢ Asset quality continues to remain stable ➢ RoA of 2.0% and RoE of 15.8% in the current quarter ➢ Consolid
Slide 26: Key financial parameters at a glance – Q3 FY 2024
Q3 FY 2024 Key financial parameters at a glance – Q3 FY 2024 Gross advances at ₹ 24,693 bn, Net profit of ₹ 164 bn, EPS up by 4.9% QoQ for the quarter ₹ 21.6 Deposits at ₹ 22,140 bn, Gross NPA at 1.26% up by 1.9% QoQ ; CASA 38% Net interest margin^ of 3.4% Return on assets of 2.0% Cost-to-income rat
Slide 27: Growth in advances and deposits
BUSINESS GROWTH Growth in advances and deposits Gross advances Deposits h 4.9% ₹ bn ₹ bn h 1.9% 23,546 24,693 21,729 22,140 22,444 20,638 19,131 16,300 Jun'23 Jun'23 (P) Sep'23 Dec'23 Jun'23 Jun'23 (P) Sep'23 Dec'23 *(P) indicates balances on merged basis 26 HDFC Bank – Fixed Income Presentation Mar
Slide 28: Sustained growth across segments
DIVERSIFIED LOAN BOOK Sustained growth across segments Growth across all segments Composition of retail loan book Dec’23 Loans (₹ bn) Sep'23 Dec'23 QoQ Retail 11,803 12,189 3.3% 15% 10% Retail Mortgages 7,171 7,432 3.6% Retail Non-Mortgages 4,632 4,756 2.7% 8% CRB 7,244 7,731 6.7% 1% 1% Other Wholes
Slide 29: Stable and granular deposits
HIGH QUALITY DEPOSIT FRANCHISE Stable and granular deposits Granular deposits Proportion of CASA deposits ₹ bn 42% 39% 38% 38% 17% 17% 17% 16% 83% 83% 83% 84% 5,606 5,606 5,700 5,799 2,523 2,460 2,477 2,558 Jun'23 Jun'23 (P) Sep'23 Dec'23 Jun'23 Jun'23 (P) Sep'23 Dec'23 CA SA CASA Ratio Retail Whole
Slide 30: Profitability
Q3 FY 2024 Profitability Standalone profit after tax Earnings per share* ₹ bn ₹ 22.0 21.6 21.4 21.1 21.6 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 * for the quarter EPS Standalone 160 164 123 120 120 ₹ 22.8 22.6 22.2 22.2 22.7 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 Q3 Dec'22 Q4 Ma
Slide 31: Shareholding at 31st Dec'23
HDFC BANK Shareholding at 31st Dec’23 Dec’23 Other FIs, 2.0% Others, 2.6% Insurance cos, 7.8% Number of shares outstanding : 7,592 mn Individuals, Number of individual shareholders : 2.97 mn 11.7% FIIs/FPIs, 45.6% Foreign limit utilized : 59.4% Foreign headroom : 14.6% Mutual Funds, 16.8% ADR, 13.5%
Slide 32: Key subsidiaries
Key subsidiaries 31 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merged with HDFC Bank effective July 1, 2023. Prior period numbers are not comparable.
Slide 33: Stake held in key subsidiary entities – December 31, 2023
GROUP COMPANIES Stake held in key subsidiary entities – December 31, 2023 Investment No. of shares % Stake PAT of the Book value EPS (FTQ) Entity Amount outstanding held by company per share (₹) (₹ bn) by entity (mn) HDFC Bank (FTQ) (₹ bn) (₹) HDB Financial Services 35 792.3 94.74% 6.4 164.7 8.0 HDF
Slide 34: ESG initiatives
ESG initiatives 33 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merged with HDFC Bank effective July 1, 2023. Prior period numbers are not comparable.
Slide 35: ESG initiatives
ESG AT HDFC BANK ESG initiatives Environmental Social Governance Ratings • Target to be carbon neutral • Leading responsibly • Commitment to principles of by FY32 • Taking banking to the unbanked; independence, • Supporting businesses; accountability, responsibility, • Commitment to have all new tra
Slide 36: APPENDIX – Q3 Dec'23 earnings summary
APPENDIX – Q3 Dec’23 earnings summary 35 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merged with HDFC Bank effective July 1, 2023. Prior period numbers are not comparable.
Slide 37: Key financial parameters at a glance – Q3 FY 2024
STANDALONE Key financial parameters at a glance – Q3 FY 2024 Gross advances at ₹ 24,693 bn, Net profit of ₹ 164 bn, EPS up by 4.9% QoQ for the quarter ₹ 21.6 Deposits at ₹ 22,140 bn, Gross NPA at 1.26% up by 1.9% QoQ ; CASA 38% Net interest margin^ of 3.4% Return on assets of 2.0% Cost-to-income rat
Slide 38: Abridged balance sheet
STANDALONE Abridged balance sheet Balance sheet (₹ bn) Q3FY23 Q2FY24 Q3FY24 QoQ Loans and advances 15,068 23,312 24,461 1,149 Investments 5,273 7,234 6,749 (485) Government and debt securities 5,222 7,040 6,556 (484) Equity and other securities 51 194 193 (1) Cash & equivalent 1,192 1,871 1,775 (96)
Slide 39: Growth in advances and deposits
BUSINESS GROWTH Growth in advances and deposits Gross advances Deposits h 4.9% ₹ bn ₹ bn h 1.9% 23,546 24,693 21,729 22,140 22,444 20,638 19,131 16,300 Jun'23 Jun'23 (P) Sep'23 Dec'23 Jun'23 Jun'23 (P) Sep'23 Dec'23 *(P) indicates balances on merged basis 38 HDFC Bank – Fixed Income Presentation Mar
Slide 40: Sustained growth across segments
DIVERSIFIED LOAN BOOK Sustained growth across segments Growth across all segments Composition of retail loan book Dec’23 Loans (₹ bn) Sep'23 Dec'23 QoQ Retail 11,803 12,189 3.3% 15% 10% Retail Mortgages 7,171 7,432 3.6% Retail Non-Mortgages 4,632 4,756 2.7% 8% CRB 7,244 7,731 6.7% 1% 1% Other Wholes
Slide 41: Stable and granular deposits
HIGH QUALITY DEPOSIT FRANCHISE Stable and granular deposits Granular deposits Proportion of CASA deposits ₹ bn 42% 39% 38% 38% 17% 17% 17% 16% 83% 83% 83% 84% 5,606 5,606 5,700 5,799 2,523 2,460 2,477 2,558 Jun'23 Jun'23 (P) Sep'23 Dec'23 Jun'23 Jun'23 (P) Sep'23 Dec'23 CA SA CASA Ratio Retail Whole
Slide 42: Branch expansion and customer relationships driving growth
BUILDING FRANCHISE STRENGTH Branch expansion and customer relationships driving growth Branch network Customer base #s # mn 7,183 7,821 7,860 7,945 8,091 18% 18% 18% 18% 18% 33% 34% 34% 34% 34% 20% 20% 20% 20% 20% 93 91 85 28% 28% 28% 28% 28% 83 81 Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 Metro Urban Semi
Slide 43: Robust capital and liquidity metrics
RISK MANAGEMENT Robust capital and liquidity metrics Capital adequacy LCR (Consolidated) 19.5% 19.4% 19.3% 18.9% 18.4% 17.8% 126% 121% 113% 116% 17.2% 110% 17.1% 16.9% 16.8% Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 Total Capital Tier 1 Capital 42 HDFC Bank
Slide 44: Income statement
STANDALONE Income statement P&L (₹ bn) Q3 FY23 Q2 FY24 Q3 FY24 QoQ YoY Net interest income 229.9 273.8 284.7 4.0% 23.9% Non-interest income 85.0 107.1 111.4 4.0% 31.0% Net revenue 314.9 380.9 396.1 4.0% 25.8% Operating expenses 124.6 154.0 159.6 3.6% 28.1% Provisions* 28.1 29.0 42.2 45.2% 50.2% Prof
Slide 45: Net revenues
STANDALONE Net revenues Net revenue Net revenue mix ₹ bn 27% 27% 28% 28% 28% 381 396 315 321 328 73% 73% 72% 72% 72% Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 YoY 18% 21% 27% 33% 26% Net Interest Income Non Interest Income 44 HDFC Bank – Fixe
Slide 46: Net interest income
STANDALONE Net interest income Net interest income Net interest margin (NIM) ₹ bn 4.3% 4.3% 4.3% 4.1% 4.1% 4.1% 3.6% 3.6% 3.4% 3.4% 274 285 230 234 236 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 YoY 25% 24% 21% 30% 24% NIM NIM (IEA) IEA: Inter
Slide 47: Yield on assets and cost of funds
STANDALONE Yield on assets and cost of funds Yield on assets and cost of funds Mix Particulars Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 8.2% 8.3% 7.9% 8.1% 7.7% Advances mix Retail 38% 37% 38% 48% 48% Mortgage 11% 11% 11% 29% 29% 4.8% 4.9% Ex Mortgage 27% 26% 27% 19% 19% 4.0% 3.7% CRB 37% 39% 39% 30% 31%
Slide 48: Other income
STANDALONE Other income Other income Fee income mix ₹ bn 111 107 7% 6% 7% 8% 6% 92 15 18% 16% 17% 15 20% 18% 85 87 11 10 15 11 11 6 3 12 12 33% 10 13 34% 33% 35% 11 34% 19% 20% 21% 20% 66 63 69 69 20% 61 22% 27% 21% 22% 19% -0 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 Q3 Dec'22 Q4 Mar'23 Q1
Slide 49: Operating expenses
STANDALONE Operating expenses Operating expenses Cost efficiency ₹ bn 42.0% 42.8% 160 39.6% 40.4% 40.3% 154 141 135 125 102 106 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 93 91 Cost to income ratio 84 2.3% 2.4% 2.4% 48 52 54 1.9% 1.9% 41 44 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 Q3
Slide 50: Resilient asset quality
RISK MANAGEMENT Resilient asset quality Gross NPA and Net NPA GNPA by Segment 1.9% 1.7% 1.6% 1.6% 1.3% 1.2% 1.3% 1.2% 1.1% 1.1% 1.1% 0.9% 0.8% 0.3% 0.3% 0.3% 0.3% 0.3% Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 Sep'23 Dec'23 GNPA NNPA Retail CRB CRB (ex-Agri) Wholesale Stable asset quality across segments 4
Slide 51: Corporate rating mix
ASSET QUALITY Corporate rating mix Rating mix % of externally rated wholesale book (corporate & mid corporate) Sep’23 Dec’23 74.7% 75.7% 5.1% 4.7% 7.1% 6.9% 13.1% 12.7% AA and above A BBB BB and below AA and above A BBB BB and below 50 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merg
Slide 52: Provisions
RISK MANAGEMENT Provisions Credit cost Stock of provisions ₹ bn 74 bps 70 bps 492 492 * 67 bps 101 105 52 bps 51 bps 15 15 49 bps 49 bps 326 44 bps 312 318 71 142 139 35 bps 66 70 34 bps 15 15 15 94 97 97 235 233 137 137 143 Dec'22 Mar'23 Jun'23 Sep'23 Dec'23 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23
Slide 53: Profitability
Q3 FY 2024 Profitability Standalone profit after tax Earnings per share* ₹ bn ₹ 22.0 21.6 21.4 21.1 21.6 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 * for the quarter EPS Standalone 160 164 123 120 120 ₹ 22.8 22.6 22.2 22.2 22.7 Q3 Dec'22 Q4 Mar'23 Q1 Jun'23 Q2 Sep'23 Q3 Dec'23 Q3 Dec'22 Q4 Ma
Slide 54: Safe harbour statement
Safe harbour statement Certain statements are included in this release are or become a party to, the future impact of new by any factor, including terrorist attack in India, the which contain words or phrases, such as ‘will’, accounting standards, our ability to pay dividends, United States or elsew
Slide 55: Thank you
Thank you 54 HDFC Bank – Fixed Income Presentation March’24 HDFC Limited merged with HDFC Bank effective July 1, 2023. Prior period numbers are not comparable.