earnings presentation - axis bank · 4& shareholding pattern (as on june 30, 2015) share...

Q1 FY2015-16

First Quarter Results

Earnings Presentation

1

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”, “future”, “objective”, “goal”, “strategy”, “philosophy”,

“project”, “should”, “will pursue” and similar expressions or variations of such

expressions may constitute "forward-looking statements". These forward-looking

statements involve a number of risks, uncertainties and other factors that could

cause actual results to differ materially from those suggested by the forward-looking

statements. These risks and uncertainties include, but are not limited to our ability to

successfully implement our strategy, future levels of non-performing loans, our

growth and expansion, the adequacy of our allowance for credit losses, our

provisioning policies, technological changes, investment income, cash flow

projections, our exposure to market risks as well as other risks. Axis Bank Limited

undertakes no obligation to update forward-looking statements to reflect events or

circumstances after the date thereof.

2

Introduction

Performance Overview

Business Overview

3

Overview

Snapshot (As on June 30, 2015)

Total Assets `4,52,492 crores

Net Advances `2,84,649 crores

Total Deposits `3,07,784 crores

Net Profit (Q1FY16) `1,978 crores

Shareholders‟ Funds `46,826 crores

Diluted EPS (annualised) `33.25

ROA (Q1FY16) 1.78%

ROE (Q1FY16) 18.15%

Net NPA Ratio 0.48%

Basel III Tier I CAR2 12.15%

Basel III Total CAR2 15.05%

Saving Bank Accounts (No.) 153 lac

Branches3 2,589

International Presence4 8

ATMs 12,179

Banking

Operations

Corporate

Credit Infrastructure

Others

SME1

Retail

Banking

Transaction

Banking

Treasury

1 Small and Medium Enterprises

2 Includes profits for the quarter 3 Includes extension counters 4 Includes overseas subsidiary in UK

Basel II Tier-I CAR 11.xx%

Basel II Total CAR 16.xx%

SME1 and

Agriculture

4

Shareholding Pattern (As on June 30, 2015)

Share Capital `475.06 crores

Shareholders‟ Funds `46,826 crores

Book Value Per Share `197.14

Diluted EPS (annualised) `33.25

Market Capitalisation `1,38,675 crores (as on July 23, 2015)

Share Count xxx mn

GDRs Issued xxx mn

Investible Headroom (GDR) 40 mn (as on March 31,

2014)

&1 GDR = 5 shares

As on June 30, 2015, against GDR& issuance of 62.7 mn, outstanding GDRs stood at 18.2 mn

&

SUUTI 11.57%

Life Insurance Corporation & its

group entities 13.79%

General Insurance Corp & others

3.84%

Foreign Institutional investors 44.51%

Indian Institutions 7.79%

GDR 3.82%

Others 14.68%

5

High Shareholder Returns

A strong franchise demonstrating consistent value creation over time

141.50

162.69

188.47 197.14

1Book Value Per Share (`)

20.51

18.23 18.57 18.15

1Return on Equity (%)

FY13 FY14 FY15 Q1FY16

1.70 1.78

1.83 1.78

1Return on Assets (%)

6

Introduction


Business Overview

7

Performance Highlights

Q1FY16

Net Profit 19% YOY

Net Interest Income 23% YOY

Fee Income 13% YOY

Operating Revenue 27% YOY

Operating Profit 41% YOY

CASA1 14% YOY

CASA (Daily Average) 13% YOY

Total Deposits1 13% YOY

Total Advances1 23% YOY

1 As on 30th June 2015

8

Key Financial Highlights

Retail Franchise continues to show traction

• Daily average CASA Deposits in Q1FY16 grew 13% YOY and constitutes 40% of Total

Deposits

• Retail Term Deposits grew 18% YOY and constitutes 62% of Term Deposits

• CASA and Retail Term Deposits constituted 79% of Total Deposits

• Retail Advances grew 26% YOY and accounts for 40% of Net Advances

• Retail Fee Income grew 17% YOY and constitutes 39% of Total Fee Income

Stable Earnings Profile

• Core Operating Revenue in Q1FY16 grew 20% YOY and stood at `5,708 crores

• Core Operating Profit in Q1FY16 rose to `3,446 crores, registered growth of 31% YOY

• Return on Assets & Return on Equity for Q1FY16 stood at 1.78% and 18.15% respectively

Well positioned for future growth with Tier I CAR& of 12.15% & Total CAR& of 15.05%

under Basel III

Overall, a Bank with consistently superior returns and healthy capital position

# Includes Foreign Currency Non-Resident – B deposits (FCNR –B); Excluding FCNR-B deposits, Domestic Retail Term Deposit growth was 21% YOY, constituting 57% of Domestic

Term Deposits

& Considering unaudited Net Profit for 9MFY14

* Excludes unaudited Net Profit for 9MFY14

& Includes profits for the quarter

9

23% YOY

Growing Net Interest Income

Trend in NIIs (`crores)

FY12 8,018

FY13 9,666

FY14 11,952

FY15 14,224

CAGR 21%

` crores

19% YOY 3,310

4,056

1Q1FY15 Q1FY16

11,952

14,224

1FY14 FY15

10

13% YOY

Diversified Fee Income Profile ` crores

13% YOY

FY15

Large & Mid

Corporate Credit 30%

Treasury & DCM 20%

Agri & SME 9%

Business Banking

7%

Retail Business

34%

Large & Mid


Treasury & DCM 23%

Agri & SME 7%

Business Banking

8%

Retail Business

32%

1,378

1,551

1

Q1FY15 Q1FY16


Treasury & DCM 14%

SME 4%

Transaction Banking

19%

Retail Business

39%

Q1FY16

11

19% YOY

Sustained Profitability Growth: Robust Operating Revenue

31% YOY 20% YOY

18% YOY 18% YOY 17% YOY

` crores

6,218

10,211

18,112

7,358

12,064

21,268

Net Profit Core OperatingProfit

Core OperatingRevenue

FY14 FY15

1,667

2,635

4,741

1,978

3,446

5,708

Net Profit Core Operating Profit Core Operating Revenue

Q1FY15 Q1FY16

12

Consistent Net Profit Growth

Quarterly Net Profits

` crores

CASA and Retail Term Deposits (` crores)

Stable CASA Growth Underpins Low-Cost Deposit Franchise

13

• Share of Retail Term Deposits to Total Term Deposits stood at 62%

• CASA + Retail Term Deposits constitute 79% of Total Deposits

Growth (%)

As on June 30 2015 End Day

Daily

Average for

the quarter

Savings Bank 14 13

CASA 14 13

40,659 46,492 45,633

56,108

46,838

74,583

79,875 79,953

88,292

84,776

93,406 97,307 101,906

106,581

110,054

208,648 223,674 227,492

250,981 241,668

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15

CA Deposits SB Deposits Retail TDs Total

40,659 46,492 45,633 56,108 46,838

74,583 79,875 79,953

88,292 84,776

115,242 126,367 125,586

144,400 131,614


CA Deposits SB Deposits

14

CASA Deposits (` crores)

CASA Ratio

Cost of Funds Net Interest Margin

Strong CASA Franchise Supports Margin Stability

91,422 86,942

51,668 52,777 56,189 57,521 63,778

39,754 34,165 39,349 40,236

48,322

Mar '12 Jun '12 Sep '12 Dec '12 Mar '13

Savings Account Deposits Current Account Deposits

3.88% 3.97% 3.93% 3.81% 3.81%


42%

45% 43%

45%

43%


6.21% 6.19% 6.17% 6.26% 6.12%


15

Stable Asset Quality Asset Quality Loan Mix

(As on June 30, 2015)

NPA trend

Provision coverage of 78% as on June 2015 including

prudential write-offs (86% before accumulated write-offs)

Net Cumulative restructured advances were `8,515 crores

(2.80% of net customer assets) as on June 2015

`740 crores of loans were restructured during the quarter

Restructuring position

(Rs bn)

Opening Balance – 40.00

Add:

New Restructuring – 34.56

Subtotal 74.56

Less:

NPA 2.58

Mvt. In Balance 1.78

Closing Balance 70.20

Provision Held 4.40

Net Position 65.80

Less:FITL 5.00

Disclosed Position 60.79

FITL is recognised as a reversal of interest

income

Other Banks highlight this separately as a

provision

*

*

* Retail including loans to SME classified as regulatory retail make up 46% of Total Loans

Capital Adequacy: Well Positioned for Growth

* Considering unaudited Net Profit for the quarter / half year / nine-months

16

& & &

#

Basel III Norms

# Capital Adequacy computation under Basel III norms & All ratios computed are based on Basel II norms

12.64% 12.57% 12.44% 12.07% 12.15%

3.45% 3.33% 3.20% 3.02% 2.90%

16.09% 15.90% 15.64% 15.09% 15.05%

Jun-14* Sep-14* Dec-14* Mar-15 Jun-15*

Tier 1 CAR Tier 2 CAR Total CAR

17

Introduction


Business Overview

18

Customer

Touch Points

Call

Centre

ATMs

Mobile Banking Point of

Sale

Internet Banking

Branches

Traditional Channels Electronic Channels

Well distributed, countrywide network of Branches & ATMs

Expanding footprint across centres

One of the largest ATM networks in the industry

Mar‟13 Mar‟14 Mar‟15 Jun‟15

ATMs 11,245 12,922 12,355 12,179

Centres Covered 1,263 1,636 1,714 1,714

Employees 37,901 42,420 42,230 43,309

1 Including extension counters

Domestic Branch network1

1,947 2,402 2,589 2,589

Multiple channels drive business growth

Extensive use of technology to provide services

19

Retail Liabilities Exhibit Consistent Growth Savings Bank Deposits

(` crores)

RTD as % of Term Deposits Retail Term Deposits (RTD) (` crores)

Domestic Retail Deposits* constitutes xx% of Total Domestic Deposits

* Retail Deposits include Savings Bank and Retail Term Deposits

Retail Deposits* (% of Total Deposits)

14% YOY

18% YOY

&

#

& RTD as at end December 2013 includes FCNR – B deposits; Excluding FCNR- B

deposits, RTD growth was 21% YOY # Share of Retail Term Deposits excluding FCNR – B deposits at end December 2013 stood

at 57%

74,583

84,776

1Jun '14 Jun '15

93,406

110,054

1Jun '14 Jun '15

62 63

1Jun '14 Jun '15

60 62

1Jun '14 Jun '15

20

Sustained Traction in Retail Assets

Maintain focus on secured lending

with greater emphasis on mining

existing liability customer base

Integrated strategy for tapping into

consumer lending opportunity in

rural markets

Retail Advances constitute 40% of

Bank‟s Net Advances in June 2015

Secured Loans make up 87% of

Retail Loans

Housing Loans account for 48% of

Retail Loans

Composition of Retail Advances Key Highlights

Portfolio Size: `1,15,204 crores

26% YOY

Housing Loans 48%

Retail agricultural

loans 15%

Auto Loans 8%

Personal Loans & Credit

Cards 10%

Loan against Property

8%

Non-schematic loans & others

11%

21

Growth in Retail Fees

Focus on cross-selling to existing

customers key driver for growth

Third-party products sold include mutual

funds, insurance, on-line broking, portfolio

management services (non-discretionary)

and gold coins

Healthy retail asset growth provides

momentum to asset linked fees 30% YOY

(` crores) Key Highlights

17% YOY

518

608

1Q1FY15 Q1FY16

2,008

2,603

1FY14 FY15

22

Retail Payments Franchise

Key Highlights

One of the largest issuers of debit cards

Over 18 lac credit cards in circulation

Credit card acquisition focused on large retail

depositor base

Multi Currency Forex Cards in 15 currencies –

USD, Euro, GBP, AUD, CAD, SGD, SEK, CHF,

JPY, AED, SAR, THB, NZD, HKD & ZAR; INR

(for foreign nationals and NRIs)

Prominent player in merchant acquiring

business

Number of Cards (in lacs)

Card Spends

(` crores)

30% YOY

5,502

7,174

1Q1FY15 Q1FY16

137

15

144

18

Debit Card Credit Card

Jun '14 Jun '15

` crores

Digital Banking

YOY growth

Note: Based on number of all financial transactions performed by

individual customers

Channel Mix

Branch Analytics

Sales force tracker

Tablet Applications

Project Pratham

E Sales on Insurance

Employees Customers

Processes Branches

Self Service Kiosks

Express Branches

Cash Deposit Machines

Cash Deposit Kiosks,

Recyclers

Axis Mobile 2.0

Ping Pay

Internet Banking

Social

Digital Ecosystem

Digital

47%

ATM

42%

Branch

11%

24%

-5% -1%

7%

Digital ATM Branch Total

Digital

ATM

Total

Branch

Mobile Banking Solutions

Our Mobile App is smarter with 60+ features Locker on Mobile Instant Personal Loan Conversion to EMI

Send and Ask

money instantly

Integrate with

Social connects

Register from

your mobile

Attach video,

audio & images

Beneficiary

details not

needed

2.1 Mn users

245% growth in spends

`6,296 Cr overall spends as on June 30, 2015 YOY growth as on June 30, 2015

Axis Mobile App

Ping Pay – India’s first multi-social payment app

25

Corporate Banking Franchise

End-to-End Player

Transaction

Banking Credit

Investment

Banking Syndication Treasury

Trustee

Services

• Strong franchise spread across liability and asset businesses

• Adopted value generating Originate and Distribute Model

• Dominant player in placement and syndication of debt / loans

• Focus on building out a high quality portfolio of credit assets

• Rigorous and regular risk assessment of accounts

Presence across the Value Chain

26

Transaction Banking

• Strong transaction banking capabilities

• Wide range of products with customised

offerings for various business segments

• Growth aided by “Club 50” and “Channel

One” high-end premium products

• Broad-based sales strategy

• Focused approach for Corporates, Financial

Institutions and Government

15% YOY

Current A/c Deposits (` crore)

FY12 39,754

FY13 48,322

FY14 48,686

FY15 56,108

CAGR 12%

` crores

Key Highlights Current Accounts

40,659

46,838

1Jun '14 Jun '15

27

Transaction Banking

20% YOY

• Collection of Central Govt. taxes on behalf of

CBDT and CBEC, including through e-payments

• Collection of state taxes & collections under E-

governance on behalf of 17 & 10 State Govt. and

Union Territories respectively

• Collections and payments for Central Govt

ministries - Railways, MOF, Urban Development

and Housing & Urban Poverty Alleviation

• NPS Trustee Bank & Collection Bankers for

subscriptions through all Branches

• Appointed as Centralised Clearing House for

Electronic Toll collection based on RFID tags by

a subsidiary of NHAI

• Leverage 50 authorised branches as Hubs and

source PPF accounts from all branches

CMS Accounts

Government Business Cash Management Business

• Leading CMS provider in the country

• Among few banks offering host to host

transaction banking facility

21,513

25,918

1Jun '14 Jun '15

28

Corporate Banking

Advances Fees

27% YOY

(` crores) (` crores)

(` crores)

3% YOY

10% YOY

101,841

129,566

1Jun '14 Jun '15

1,793 1,803

1FY14 FY15

1% YOY

336

370

1Jun '14 Jun '15

29

Debt Capital Markets Key Highlights Placement & Syndication of Debt Issues

Dominant player in placement and

syndication of debt issuances

Ranked No. 1 debt arranger by Prime

Database for year ended March 2015

Ranked No. 1 underwriter for ` Denominated

Bonds by Bloomberg for year ended March

2015 and 6 months ended June 2015.

Awarded „Best DCM House‟ 2015 by Finance

Asia

Awarded „Best Debt House in India‟ by

Euromoney & Asiamoney for 2015

` crores

Overall industry volumes shrunk 12% for calendar year ended

December 2013 - Source: Bloomberg

241% YOY

8,940

30,442

1Q1FY15 Q1FY16

30

SME Banking

Advances

18% YOY

Fees

14% YOY

11% YOY&

(` crores) (` crores)

(` crores)

^ Includes (loans considered as regulatory retail)

320 366

1FY14 FY15&SME loans (including non-retail agriculture loans) grew 6% YOY

34,575

38,242

1Jun '14 Jun '15

49

58

1Q1FY15 Q1FY16

^ Excludes non-retail agricultural loans amounting to `1,637 crores

as on 30th June 2015 & `2,895 crores as on 30th June 2014

31

Rating Distribution: Corporate Banking

60% of corporate advances have rating of at least ‘A’ in June 2015

32

Rating Distribution: SME

83% of SME advances have rating of at least ‘SME3’ in June 2015

33

Industry-wise Distribution (Top 10)

Rank Sectors

Outstanding as on June 30, 2015 (%)1

Fund-based Non-fund

based Total

1. Infrastructure2 6.83 10.41 7.74

2. Power Generation & Distribution 6.66 7.30 6.83

3. Engineering & Electronics 3.26 16.39 6.61

4. Metal & Metal Products 5.89 6.15 5.96

5. Financial Companies3 4.44 9.75 5.80

6. Trade 3.09 4.71 3.50

7. Food Processing 3.09 2.47 2.93

8. Real Estate 3.25 1.93 2.92

9. Petroleum & Petroleum Products 0.59 7.27 2.29

10. Telecommunication Services 1.00 4.99 2.02

1 Percentages stated above are on the total fund and non-fund based outstanding across all loan segments 2 Financing of projects (roads, ports, airports etc)

3 Includes Housing Finance Companies and other NBFCs

34

International Presence

Branches at Singapore, Hong Kong, DIFC – Dubai , Colombo & Shanghai

Representative offices at Dubai & Abu Dhabi

Axis Bank UK Limited (a wholly-owned subsidiary of the Bank)

Business offerings include Corporate Loans, Trade Finance Products, Debt Syndication and Liability Business

Total Assets overseas stood at USD 7.73 billion

35

Thank You

earnings presentation - axis bank · 4& shareholding pattern (as on june 30, 2015) share...

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