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TRANSCRIPT
Debt Investor Presentation
June 2017
IndusInd Bank – Consistently Building Scale with Profitability
Strength Growth Returns
CRAR at 15.31%; CET1 at 14.02%; Further raised
AT1 of Rs 10 billion in April 2017
Strong Asset Quality with impaired assets
proportion amongst the lowest in Indian banks;
Net NPAs at 0.39%
In top decile on productivity, profitability and
efficiency parameters in Indian banking industry
3 Year CAGR FY17
Loans 27% 28%
Deposits 28% 36%
Revenue 29% 31%
Profits 27% 25%
Networth 33% 17%
RoA = 1.86%
RoE = 15.26%
NIMs = 3.99%
Note: Data as of FY17
2
Revenue (Rs mn) Net Profit (Rs mn) Total Assets(Rs bn)
47,812
58,241
78,135
1,02,341
FY14 FY15 FY16 FY17
14,080
17,937
22,865
28,679
FY14 FY15 FY16 FY17
870
1,091
1,429
1,787
FY14 FY15 FY16 FY17
Benchmarking Revenue, Risk & Returns
IBL performance is in top decile when comparing with the top 5 Public Sector (PSU) and top 5 Private Sector Banks (PB)
Data as of FY17. (Banks’ nomenclature not in any particular order) 3
Overview of the Bank
Leading private sector bank and financial services company in India
Incorporated in January, 1994; Current customer base of ~9.5 million(1)
Pan India presence through a network of 1200 branches and 1,988 ATMs(1)
Diversified loan book – Split between Corporate & Commercial Banking and
Consumer Finance at 60% and 40% respectively(1)
Enterprise-wide Risk Management framework for effective management of
risks
Total Assets of over Rs 1,786 bn(1) and Market Cap of over Rs 900 bn(2)
Promoters15%
MFs / Banks/
Insurance Co
12%
FIIs43%
Private Corporates
10%
Individuals7%
NRIs/ Director/
Others2%
GDR issue11%
Shareholding (1)
1. As on March 31, 20172. As on June 08, 2017
4
Over 20 years of Operating History
New Management team headed by Mr. Romesh Sobtiinducted from ABN AMRO Bank NV
New Launch/Rollout: Investment Bank, 3rd PartyDistribution Platform, Warehouse Receipt Finance
GDR – raised USD 52mn (Jun 2008); QIP – raised Rs4,803 mn (Aug 2009) & Rs 11,728 mn (Sept 2010)
Acquired Deutsche Bank’s credit card business in IndiaPre-2008
Planning Cycle I: FY09-FY11
Incorporated in 1994; Promoted by a groupof Non Resident Indians
IPO – raised Rs 1,800 mn (Dec 1997); GDR –raised USD 34mn (Mar 2007)
Ashok Leyland Finance Ltd, an NBFC mergedwith the Bank
New products /segments launched – PrepaidForex cards, Tractor financing, MFI through Partnership Model
Implemented Finacle 2.0 core banking system
QIP – raised Rs 20,006 mn (Dec 2012)
Innovations introduced – Instant Redeem, Direct Connect & Cash On Mobile, My Account My Number
Planning Cycle II: FY12-FY14
Launched new Non-vehicle retail products; Started operations in GIFT City
Implemented systems for Treasury, Trade Finance and Fraud Analytics
Acquired Diamond financing business of RBS in India
Capital Raise : QIP of Rs 43,280 mn and Preferential Issue of Rs 7,530 mn; AT1 of Rs 10,000 mn
Innovations introduced – Video Branch, Fingerprint Banking; Revamped Mobile App
Planning Cycle III: FY15-FY17
5
Ratings
CRISIL(1) AA + for Infra Bonds program
CRISIL AA for Additional Tier I Bonds program
CRISIL A1+ for certificate of deposit program
IND AA+ for Senior bonds program by India Ratings and Research (2)
IND AA for Additional Tier I Bonds program by India Ratings and Research
IND A1+ for Short Term Debt Instruments by India Ratings and Research
1. Indian subsidiary of S&P2. Indian subsidiary of Fitch
6
Organization Structure
Product Groups
Client Groups
Consumer Banking Corporate Banking
Consumer Finance
Retail Liabilities
Corporate & Investment Banking
Commercial Banking
Business Banking
Public Sector Unit
Banking Channel Management & Services
Wealth Management & Third Party Distribution
Global Markets Transaction Banking
Bu
sin
ess
Un
its
Financial Institutions Group
Credit Cards
7
Investment Highlights
Universal Banking Offerings
Growing Liability and Fee Franchise
Focused Execution on Risk, Operations and Portfolio
Well Defined Expansion Strategy
History of Technology Refresh and Innovation
Stable Asset Quality
Experienced Management Team
1
2
3
4
5
6
7
8
Planning Cycle 4 Strategy
Well Defined Expansion Strategy1
Market Share with ProfitabilityDo More of the Same
Strategy
Digitize to Differentiate, Diversify and Create Domain Leadership
Bro
ad
Th
em
es
Financing Livelihoods
Finding Customers from Within
Reengineering Our Businesses
Sustainable Banking
9
Strategic Themes
Well Defined Expansion Strategy1
Internal
Collaboration
and Cross Sell
Enriching
Client
Experience
Digitization
of Businesses
Focus on
ProductivitySustainability
Rebalancing
of Loan Book
Rural
Banking and
Microfinance
10
Pillars of Growth
Well Defined Expansion Strategy1
CASA Ratio
Revenue Growth
RoRWA
Branch Network
Loan Growth
40%
Exceed Balance Sheet Growth
> 2.4%
2,000
25% - 30%
Re
sult
ing
in
Customer Base Double to >20mn
11
The Core Executive Team
Experienced Management Team 2
Name Designation Prior Experience
Mr. Romesh Sobti Managing Director & CEO Over 40 years banking career with ABN AMRO Bank N.V., ANZ Grindlays Bank Plc & State Bank of India
Mr. Paul Abraham Chief Operating Officer Managing Director of ABN AMRO Central Enterprise Services
Mr. Suhail Chander Head – Corporate & Commercial Banking Head – Consumer & Commercial Banking, ABN AMRO Malaysia & Singapore
Mr. Sumant Kathpalia Head – Consumer Banking Head – Consumer Banking, ABN AMRO Bank (India)
Mr. Kalpathi Sridhar Senior Executive Vice President - Risk Senior Vice President and Country Risk Officer, ABN AMRO Bank (India)
Mr. Ramaswamy Meyyappan Chief Risk Officer Chief Risk Officer at JP Morgan Chase Bank NA, Mumbai
Mr. S.V. Zaregaonkar Chief Financial Officer Joined IndusInd Bank in 1995 as Head – Operations; Chief Manager Dena Bank
Mr. Arun Khurana Head – Global Markets Group Regional Head Corporate Solutions Asia-Pacific Markets of RBS Singapore
Mr. S.V. Parthasarathy Head – Consumer Finance Executive Director, Ashok Leyland Finance Limited
Mr. Ramesh Ganesan Head – Transaction Banking Executive Director, ABN AMRO Bank (India)
Mr. Sanjay MallikHead – Investor Relations& Strategy
Director, BROTKO, his own financial services firm; Held prior positions at ANZ Bank, ABN AMRO Bank (India) and Standard Chartered Bank
Ms. Roopa SatishHead, Corporate, Institutions & Investment Banking
Head – Mid Markets (Western Region), ABN AMRO Bank (India)
Mr. Sanjeev AnandDeputy Head – Corporate& Commercial Banking
Head – Commercial Banking, ABN AMRO Bank (India)
Mr. Zubin Mody Head – Human Resources Head – HR, ICICI Lombard General Insurance Company Limited
12
Performance Across Key Financial Vectors
Experienced Management Team 2
QIP & Pref. Allot.Rs 5,081 crs
3.71
3.99
2014 2017
NIMs (%)
1.81
1.86
2014 2017
RoA (%)
17.4815.26
2014 2017
RoE (%)
47.1 46.7
2014 2017
Cost / Income (%)
13
0.330.39
2014 2017
Net NPAs (%)
3.0
4.0
2014 2017
Revenue per Employee (Rs mn)
Well Diversified Loan Book
Universal Banking Offerings3
Consumer Finance Mar-17
Comm. Vehicle Loans 15,606 13%
Utility Vehicle Loans 2,342 2%
Small CV 2,374 2%
Two Wheeler Loans 3,262 3%
Car Loans 4,665 4%
Tractor 1,813 2%
Equipment Financing 4,120 4%
Credit Card 1,704 2%
Loan Against Property 7,051 6%
BL, PL, GL, Others 2,592 2%
Total Advances 45,529 40%
Loan Book (Rs crs)
(Rs crs)(Rs crs)
*Includes Business Banking Rs. 8,273 crs managed by Consumer Banking
49% 45% 41% 42% 41% 40% 48%51%
55%59%
58%59%
60% 52%
44,321 55,102
68,788
88,419
1,02,770 1,13,081 1,13,081
FY13 FY14 FY15 FY16 Dec-16 Mar-17 Mar-17(BBG forming part
of Consumer)Consumer Finance Division Corporate & Commercial Banking
Corporate Banking Mar-17
Large Corporates 31,477 28%
Mid size Corporates 22,203 20%
Small Corporates* 13,872 12%
Total Advances 67,552 60%
BBG7%
Comm. Vehicle Loans 14%
Utility Vehicle Loans
2%
Small CV2%
Two Wheeler Loans
3%Car Loans
4%Tractor
2%
Equipment Financing
4%
Credit Card1%
Loan Against Property
6%BL,PL,GL
2%
Large Corporates28%
Mid Size Corporates
20%
Small Corporates5%
14
Well Distributed Vehicle Finance Portfolio
Universal Banking Offerings3
15
Andhra Pradesh 6%
●Assam 2%
●Bihar 2%
Chandigarh 0% ●
●Chhatisgarh 3%Dadra & Nagar
Haveli 0%
● Delhi 2%
Goa 1% ●
●Gujarat 5%
Haryana 5% ●
●Himachal Pradesh 1%
●J&K 0%
●Jharkhand 3%
Karnataka 4% ●
Kerala 9% ●
●Madhya Pradesh5%
●Maharashtra 7%
● Mizoram 0%
●Odisha 4%
● Pondicherry 0%
Punjab 3% ●
Rajasthan 10% ●
●Uttaranchal 0%
●West Bengal 5%
Sikkim 0%●
●Tamil Nadu 11%
Tripura 1%
●UP 6%
●
●
Geographical Distribution of Vehicle Finance Portfolio (Rs 342,122mn)– March 31, 2017
Two Wheeler loans
Car loans
M&HCV loans
Small CV & Utility Vehicle loans
LCV Loans
●Telangana 5%
● Manipur, 0% Tractor Loans
Comprehensive Corporate and Commercial Banking Offering
Universal Banking Offerings3
16
Distribution of Corporate & Commercial Banking Network Product and Service Offerings
Working Capital Finance
Short Term Finance
Bill Discounting
Export Credit
Term Lending
Buyer’s Credit / Supplier’s Credit
Asset based financing
Lease Rental Discounting
Supply Chain Finance
Warehouse Receipt Finance
Agri Finance
Inclusive Banking
Non FundBased Services
Value AddedServices
Letter of Credit
Bank Guarantees
Forward Contracts / Derivatives
Channel Financing / Associate Financing
Cash Management Services
Corporate Salary Accounts
Liability/ Investment Products
Commodity Finance
Project Finance
Forex / Derivative Desks
Fund BasedServices
Andhra Pradesh
AssamBihar
Punjab
Chandigarh
Chhatisgarh
Gujarat
Haryana
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Rajasthan
West Bengal
Tamil Nadu
UP
●
Corporate & Institutions Banking
Public Sector Units
Business Banking Group
Commercial Banking
Goa
Tripura
Nagaland
Meghalaya
Pondicherry
Uttarakhand
HP
Non Fund Based Services
Structured Finance
Debt Syndication
Advisory Services
InvestmentBanking
Telengana
Diversified Corporate Loan Book
Universal Banking Offerings3
6.14%
5.08%
3.49%
2.52%
2.26%
2.02%
1.84%
1.68%
1.53%
1.32%
1.17%
1.03%
1.00%
28.67%
Gems and Jewellery
Lease Rental
Telecom- Cellular
Microfinance
Services
Real Estate
Steel
Constn related to infra.- EPC
Food Beverages / processing
Housing Finance Companies
Media,Entertainment & Advt
Airlines
Contract Construction-Civil
Other Industry
17
Improving CASA profile
Growing Liability and Fee Franchise4
CASA Uptick
Savings Account (SA)Current Account (CA)
11,563 15,868 19,691
25,300 32,724
46,646
27.3%29.3%
32.5%34.1% 35.2% 36.9%
10%
16%
21%
27%
33%
38%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
FY12 FY13 FY14 FY15 FY16 FY17
CASA (Rs crs) % of Total Deposits
6,869 8,835 9,776
12,356 15,478
19,609
16.2% 16.3% 16.2% 16.7% 16.6%15.5%
5%
7%
9%
11%
13%
15%
17%
19%
0
3,000
6,000
9,000
12,000
15,000
18,000
21,000
FY12 FY13 FY14 FY15 FY16 FY17
CA (Rs crs) % of Total Deposits
Building CASA traction
Expanding branch network
Focus on target market segments
Government business
Capital market flows
Key Non Resident markets
Self employed and Emerging Corporate businesses
Transaction Banking and CMS Mandates
Differentiated service propositions
4,694 7,033 9,915
12,944 17,246
27,037
11.1%13.0%
16.4%17.5% 18.5%
21.4%
-3.0%
1.0%
5.0%
9.0%
13.0%
17.0%
21.0%
25.0%
0
5,000
10,000
15,000
20,000
25,000
30,000
FY12 FY13 FY14 FY15 FY16 FY17
SA (Rs crs) % of Total Deposits
18
Efficient Distribution and Cross Sell
Growing Liability and Fee Franchise4
Life Insurance General Insurance Health Insurance Mortgage and Broking
19
Diversified Fee streams
Growing Liability and Fee Franchise4
Fee growth ahead of loan growth for last 7 years
Comprises a mix of retail and corporate fee incomes
Individual fee streams comprise of multiple drivers
Rs cr FY15 FY16 FY17
Trade and Remittances 265 323 439
Foreign Exchange Income 553 639 655
Distribution Fees (Insurance, MF, Cards) 385 491 715
General Banking Fees 171 185 232
Loan Processing fees 493 700 854
Investment Banking 334 472 594
Total Core Fee Income 2,201 2,810 3,489
20
Asset Quality Stability Across Cycles
Stable Asset Quality 5
1.23%
1.01% 0.98%1.03%
1.12%
0.81%0.87%
0.93%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
0.50%
0.28% 0.27%0.31% 0.33% 0.31%
0.36%0.39%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Gross NPA
Focus on Secured LendingCredit Cost *
0.79%
0.61%
0.41%0.46%
0.41%
0.48%0.53%
0.59%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
90.5% 89.4% 87.2% 88.1% 88.1%
FY13 FY14 FY15 FY16 FY17
Net NPA
* Net of recoveries21
Well Rated Corporate Portfolio
Stable Asset Quality 5
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
24%
IB1(AAA)
IB2+(AA+)
IB2 (AA) IB2-(AA-)
IB3+(A+)
IB3 (A) IB3- (A-)
IB4+(BBB+)
IB4(BBB)
IB4-(BBB-)
IB5+(BB+)
IB5 (BB) IB5-(BB-)
IB6 (B) IB7 (C ) IB8 (C ) NPA (D)
Unsecured Non Fund Based %
Secured Non Fund Based %
Unsecured Fund Based %
Secured Fund Based %
PERCENT
OF
RATED
PORTFOLIO
Investment Grade Sub Investment Grade
22
Robust Risk Management Structure
Focused Execution on Risk, Operations and Portfolio6
Risk and Control SelfAssessment
Key Risk
Indicators (KRIs)
Loss Data Collection and Analysis
Risk Profiling of branches
Operational Risk Assessment Processfor New Products
Risk Events Reporting
Business ContinuityPlan
Separate groupmonitors nonperforming loans
Account-wisemonitoring &recovery mechanism
Quality check onentire credit process
Tracking of credit
rating
Tracking of portfolio quality
Proactive Monitoringof Risk & exposures
Daily valuation
VaR & PV01Based Limit
Online monitoring ofRisk sensitivities
Capital Charge on Market Risk, CVA Basel III Liquidity Standards – LCR, Liquidity Ratios
Liquidity Gaps monitoring – Daily
Duration-based gapapproach
Stress testing for Liquidity, interest and foreign exchangerisk
ALM System / FundTransfer Pricing
Risk Rating Modelsrevised and benchmarked against external rating
Basel II & III implementation
Internal Capital AdequacyAssessment Process(ICAAP)
Stress testingreinforced
Portfolio Management &Credit QualityMonitoringreinforced
Credit Risk values measurement reinforced – PD, LGD, EAD
Credit Appraisal/ Approval process
Credit standards
tightened
Credit Adminreinforced andcentralised in hubs
Early warningsignals / Exceptions tracking
Enhancedmonitoringmechanism
23
Credit Approval & Monitoring
Credit Risk Management
Market Risk Management & ALM
Operational Risk Management
Financial Restructuring & Reconstruction
Credit Quality Assurance & Loan
Review
Risk Organization
Comfortable Capital Adequacy
Focused Execution on Risk, Operations and Portfolio6
Rs cr 31 Mar 15 31 Mar 16 31 Mar 17
Credit Risk, CVA and UFCE 76,718 99,360 1,22,036
Market Risk 4,356 5,462 6,669
Operational Risk 7,855 11,466 14,824
Total Risk Weighted Assets 88,929 1,16,288 1,43,529
CET 1 Capital Funds 9,975 17,350 20,125
Additional Tier 1 Capital Funds - - 1,000
Tier 2 Capital Funds 776 669 842
Total Capital Funds 10,751 18,019 21,967
CRAR 12.09% 15.50% 15.31%
CET1 11.22% 14.92% 14.02%
Tier 1 11.22% 14.92% 14.72%
Tier 2 0.87% 0.58% 0.59%
Bank has maintained strong capital adequacy levels well in excess
of the minimum regulatory requirement
Raised Rs 10 billion of Additional Tier I (AT1) bonds in FY17 and
again in April 2017 to augment the Tier I ratio and position itself
strongly for the next phase of growth
The Bank is valued at 4.5x of FY17 book value (1)
12.3% 11.4%13.8% 12.7%
11.2%
14.9% 14.7%
3.6%2.5%
1.6%1.1%
0.9%
0.6% 0.6%
15.9%
13.9%
15.4%
13.9%
12.1%
15.5% 15.3%
FY11 FY12 FY13 FY14 FY15 FY16 FY17
Tier I Tier II
CRAR
24(1) Basis market cap as on June 8, 2017
Strong Funding and Liquidity Profile
Focused Execution on Risk, Operations and Portfolio6
Liquidity Coverage RatioDiversified Funding Sources
25
9,558 28,215
14,683 29,823
65.1%74.2%
66.4%70.7%
78.4% 81.1%
91.3% 94.6%
Jun
-15
Sep-1
5
Dec-1
5
Mar-1
6
Jun
-16
Sep-1
6
Dec-1
6
Mar-1
7
HQLA (Rs cr) Net Cash Outflow (Rs cr) LCR (%)
Net Worth12%
CA Deposits; 11%
SA Deposits; 15%
Retail & SME TD; 19%
Public Sector Units TD; 9%
Financial Institutions TD; 10%
Corporate TD; 4%
Capital Markets TD; 2%
Refinance; 8%
Infra Bonds; 1%
AT1 Bonds; 1%
Other Borrowings; 3%
Other Liabilities; 5%
Note: Data as on March 2017
Basel III Leverage Ratio
9.5% 9.7% 9.3% 9.2% 9.2% 9.1% 9.3%
Sep-1
5
Dec-1
5
Mar-1
6
Jun
-16
Sep-1
6
Dec-1
6
Mar-1
7
Required >4.5%
Required >80%
Excludes SLR securities not currently part of HQLA
Liabilities Match Funding Assets
Focused Execution on Risk, Operations and Portfolio6
Assets (Rs cr)Liabilities (Rs cr)
26Note: Data as on March 2017
Net Worth , 20,646
Refinance , 13,500
CASA, 46,646
Term Deposits, 79,927
Other Borrowings, 8,954
Other Liabilities, 8,976
Liabilities
Investments 36,702
Vehicle Term Finance 34,182
Non-Vehicle Retail Advances19,620
Corporate Banking Advances59,279
Cash and bank balances18,628
Other Assets10,237
Assets
Distribution Expansion to Drive Growth
Focused Execution on Risk, Operations and Portfolio6
Note: Numbers given above are total branches in each state.This does not include Branch/Representative Office in London, Dubai and Abu Dhabi.
602
1,200
2014 2017
Branches
4.5
9.5
2014 2017
Clients (mn)
27
Sustainable Banking: Good Ecology is good Economics!
Focused Execution on Risk, Operations and Portfolio6
28
Regulatory Compliance
Operational Compliance
Market Risk Management
Liquidity Management
AT-1 Capital Issuance
IT & Information Security
Reputation Risk
Management
Strategic Risk
Management
Environmental
Solar ATMs
Thin Servers
Waste Management
Green champions
LEEDs certified building
Financing Renewable
Energy
Afforestation Projects
Social
Water rejuvenation
projects
Micro Credit
Rural Branches
Para Champions
Priority sector compliance
Legal and Financial
literacy
Critical care support
Governance
Board Level CSR
Committee
6 Years of Sustainability
Reporting
Participation in CDP, DJSI
Surveys
Environmental Lending
Policy
Integrated Financial
Reporting
A
Innovation as a Service Differentiator
History of Technology Refresh and Innovation7
Channel
Innovation
Service
Innovation
Product
Innovation
Client
Experience Edge
29
Digitize to Differentiate, Diversify and Create Domain Expertise
History of Technology Refresh and Innovation7
30
Integrated Digital Strategy to extract significant value (14% of 2020 profit) via:
1. Agility & Innovation as Service Differentiator
2. Operating Efficiency in Front & Back Office
3. Evolution to Online/Digital Channels
4. Partnering with the Digital Ecosystems
5. Improved Decision Making & Analytics
6. Transform to Digital Offerings
7. Re-skilling Staff on Digital Technologies
India – Macro Update
31
India – Positive Macro Outlook
CRP = CURRENCY REPLACEMENT PROGRAM
Stylised representation of growth recovery cycle: Morgan Stanley Research
2013 2014 2015 2016 2017e
EXPORTS
CONSUMPTION
FDI
PUBLIC CAPEX
PRIVATE DOMESTIC CAPEX
MACRO ADJUSTMENT, WEAK TREND IN DOMESTIC DEMAND.
DOMESTIC DEMAND STILL WEAK. EXTERNAL DEMAND SLOWS SHARPLY.
MACRO ADJUSTMENT COMPLETE. GROWTH IMPROVES LED BY PUBLIC CAPEX AND FDI, WEAKNESS IN EXTERNAL DEMAND INTENSIFIES.
GROWTH RECOVERY BROADENS, WITH PICK UP IN CONSUMPTION. EXPORTS BACK ON RECOVERY TRACK FROM SEP-16. CRP IN NOV-16 DELAYED DOMESTIC DEMAND RECOVERY.
IMPACT OF CRP TO FADE FROM 2Q17. EXPORT RECOVERY STRENGTHENS, CONTINUED STRENGTH IN PUBLIC CAPEX / FDI. PRIVATE CAPEX RECOVERY EXPECTED IN 2018.
SHARP DECLINE IN GLOBAL COMMODITY PRICES, EM SHOCK
CRP SHOCK TO CONSUMPTION RECOVERY
32
Backed by Improving Fundamentals
33
Inflation Trending towards RBI Targets Resulting in Stable Currency
Fiscal Deficit Consolidation(%) and Also Current Account Deficit (%)
Forecast
Source: Morgan Stanley Research
34
Key reforms & developments in 2016-17 with long-term implications
A national Goods and Services tax (GST) regime to be implemented by July 2017. GST will create a common market, improve tax compliance, boost investment and growth. Potential to raise real GDP growth by a 0.5% to 2%.
A new Bankruptcy law enacted to improve the framework around closure of businesses and to facilitate recovery of bad loans.
A new monetary policy framework with an inflation target of 4% agreed between govt. and the RBI. Positive in the medium-term for macro-economic stability and for sustainable growth.
Demonetization initiative to curb the size of the informal economy and to widen the tax base.
FDI reform measures were implemented, allowing India to become one of the largest recipient. Net FDI inflows are now exceeding $30 billion annually.
Stability of policy environment buttressed by state elections according greater support for the central government. This will help improve the position of BJP in the Rajya Sabha by 2019.
Weak investment activity and bank NPA’s emerged as major challenges. Stressed loans (NPAs, restructured & potential bad loans) were around 16% of total by end of Dec. 2016, as per the Economic Survey 2017.
35
Emerging themes and areas of opportunities
India to remain the fastest growing large economy in the world until 2020, as per the IMF. Positive for overall credit growth, especiallyretail loans and mortgages.
Greater formalization, reduction in cash transactions and government’s efforts at financial inclusion. Positive for deposit mobilization,demand for credit products and micro finance.
Focus on raising farm incomes and productivity under govt.’s plan of doubling farm incomes by 2022. Positive for micro-finance, cold-chains, warehousing, food processing and other agri. dependent sectors.
GST regime will have a positive impact on logistics, commercial vehicles, warehousing and industrial manufacturing. Zero-rating ofexports will be particularly beneficial for export oriented sectors.
Push for renewable energy led by solar power. Government plans to scale up total capacity to 170 GWs with 100 GWs of solar power by2022. Tariffs for solar power has fallen below that of thermal.
Infrastructure development with focus on transportation including roads, railways and aviation.
Affordable housing push by the government, through fiscal incentives and other support measures.
Additional Information
36
Balance Sheet
* FY17 FY16 Y-o-Y (%)
Capital & Liabilities
Capital 598 595 1%
Reserves and Surplus 20,048 17,101 17%
Deposits 1,26,572 93,000 36%
Borrowings 22,454 24,996 (10%)
Other Liabilities and Provisions 8,976 7,205 25%
Total 1,78,648 1,42,897 25%
Assets
Cash and Balances with RBI 7,749 4,521 71%
Balances with Banks 10,879 5,591 95%
Investments 36,702 34,054 8%
Advances 1,13,081 88,419 28%
Fixed Assets 1,335 1,255 6%
Other Assets 8,902 9,057 (2%)
Total 1,78,648 1,42,897 25%
(Rs Crs)
37
Profit and Loss Statement
(Rs Crs)FY17 FY16 Y-o-Y (%)
Net Interest Income 6,063 4,517 34%
Other Income 4,171 3,297 27%
Total Income 10,234 7,814 31%
Operating Expenses 4,783 3,672 30%
Operating Profit 5,451 4,141 32%
Provisions & Contingencies 1,091* 672 62%
Profit before Tax 4,360 3,469 26%
Provision for Tax 1,492 1,183 26%
Profit after Tax 2,868 2,286 25%
*Includes a one-off provision of Rs 122.00 crs against a large corporate account classified as ‘Standard Advance’ pursuant tospecific RBI advice in this regard. The Bank’s exposure which is due for repayment in June 2017 relates to a bridge loan for aMerger & Acquisition transaction in cement industry.
38
Outline of Existing Borrowings
Name Date Tenor Rating Amount
Long Term Senior Infrastructure Bonds Dec-16 10 yearsAA+/ Stable by CRISIL and IND AA+/
Stable by India Ratings Rs.1500 crore (equiv.
USD 232mm)
IndusInd Bank- Rated , Listed, Non-convertible, Perpetual , Subordinated & Unsecured BASEL III compliant AT1 Bonds
Mar-17Apr-17
Perpetual (Call option on the 5th
Anniversary of the Deemed Dated of Allotment)
AA/Stable by CRISIL Ltd and IND AA/ Stable by India Ratings & Research
Private Ltd
Rs.2000 crore (equiv. USD 310mm)
Refinance - Development Financial Institution
May-17 3 yearsAgainst portfolio of eligible assets
constituting of Agri & SME Rs 4500crs (equiv.USD
700mm)
Overseas Private Investment Corporation (OPIC) – Multilateral Agency of the US Government
Jun-178 years
(3 years moratorium)Against funding for MSME USD 225mm
39* Based on swap rates as on June 8, 2017
Accolades
40
Award Winning Brand / Franchise
41
Business Today2016
“The Best CEO (BFSI)” Mr. Romesh Sobti
Forbes India2016
Forbes’ Super 50 Companies in India
BrandZ Top 50WPP Plc & Milward Brown
2016
Ranked 12th Most Valuable Indian Brands
Celent Model Bank 2017
Winner- Fraud Management and
Cybersecurity
Thank You
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Note: All financial numbers in the presentation are from Audited Financials or Limited Reviewed financials or based on Management estimates.43