performance review

Performance Review

Q 3 FY 2006-2007

22

Presentation Agenda

Financial Performance – Q3 FY07

India – The Opportunity

Strategy for Growth

Retail Banking at Centurion Bank of Punjab

SME Initiative

33

38% 34% 28%

33%27%

31%

22%32% 33%

7% 7% 8%

0%

40%

80%

1991 2001 2011E

60+ Yrs36-60 Yrs14-35 Yrs0-14 Yrs

0

500

1000

1500

2000

2500

FY03 FY04 FY05 FY06 FY07E


0%

4%

8%

12%

China India SouthKorea

Malaysia Chile Brazil

Exciting Phase of Economic Growth Favorable Demographics (2)

GDP Growth Rate (1)

(2) Source: Indian Census 2001

Low Consumer Finance Penetration (3)

0%

25%

50%

75%

100%

US HK UK S'pore Taiwan India

Consumer Debt As % of GDP

Expanding Consumerism(4)

Rs. Billion Retail LendingCAGR – 35%

(1) Average GDP Annual Growth Rate between 1993 to 2005. Source: World Bank

(3) Source: Smith Barney & RBI Bulletin(4) Source : SSKI research

44

Presentation Agenda



Strategy for Growth


SME Initiative

55

Independent Board representing major shareholders and strong professionals

Consistently demonstrated strong organic growth Consistently demonstrated strong organic growth Inorganic growth is a stated part of our growth Inorganic growth is a stated part of our growth strategy for which we are uniquely placedstrategy for which we are uniquely placed

Branch and nonBranch and non--branch distribution channels branch distribution channels –– 256 256 branches across 128 cities and towns ; Obtained branches across 128 cities and towns ; Obtained RBI clearances to open up to 23 additional RBI clearances to open up to 23 additional branches before the end of the Fiscal yearbranches before the end of the Fiscal year

Focus on retail Focus on retail –– 69% of net advances69% of net advancesMortgages, 2Mortgages, 2--wheeler, CV/CE, personal loans, wheeler, CV/CE, personal loans, credit cards, wealth management, Ecredit cards, wealth management, E--BrokingBroking

Increased focus on the growth of the SME business Increased focus on the growth of the SME business building on the strong growth of the sector in Indiabuilding on the strong growth of the sector in India

Strong Corporate Governance / Transparency

SME – Strong second engine

Nationwide Franchise

Retail Focused Strategy

Future Focus on both Organic and Inorganic growth

Clear Strategy for Growth

66

Pro-forma Combined Branch Network

16

7

24

32

12

20 55

1

12

92

1

9

8

5

74

1

1

6

11

Punjab (74)Punjab (74)

Jammu & Kashmir (1)Jammu & Kashmir (1)

Chandigarh (9)Chandigarh (9)

Delhi (NCR) (55)Delhi (NCR) (55)Uttaranchal (1)Uttaranchal (1)

Himachal Himachal Pradesh (1)Pradesh (1)

Uttar Pradesh (8)Uttar Pradesh (8)

Haryana (20)Haryana (20)

Rajasthan(12)Rajasthan(12)

Gujarat (12)Gujarat (12)

Maharashtra (32)Maharashtra (32)

Mumbai (22)Mumbai (22)

Goa (6)Goa (6)

Kerala (92)Kerala (92) Tamil Nadu (24)Tamil Nadu (24)

Karnataka (16)Karnataka (16)Andhra Pradesh (7)Andhra Pradesh (7)

West Bengal (9)West Bengal (9)

Jharkhand (1)Jharkhand (1)Orissa (1)Orissa (1)Chattisgarh (1)Chattisgarh (1)

Madhya Pradesh (5)Madhya Pradesh (5)

Post merger network403 branches &extension counters446 ATMs

Presence in 1600 dealerships across 750 towns and cities

6,000 strong UBO team

Very High ConcentrationHigh ConcentrationModerate Concentration

Largest Private Sector Bank in

Punjab

Merger with LKB gives the Bank dominance

in Kerala and enhances branch presence

in Metros and Tier I/II cities

77

Strategic Initiatives over the past 12 months

Merger of Lord Krishna Bank• Approved by boards and shareholders of both banks. Awaiting approval from the Reserve

Bank of India

Proposed 29% stake in Centillion Solutions and Services Pvt. Ltd • A company focusing on undertaking back office operations for Banks and FIs

Proposed 20% stake in Ambit Capital Pvt. Ltd. and Ambit Web 18 retail securities Pvt. Ltd.• An equity broking venture catering to the retail consumer, HNIs and FIs

Proposed 29% stake in KairoLeaf solutions and services Pvt. Ltd.• Engaged in preparing business analytics and business intelligence solutions for Banks and FIs

Proposed 30% stake in an Asset Reconstruction Company

88

Presentation Agenda



Strategy for Growth


SME Initiative

99

Considerable Improvement along Key Parameters

-38%34%CASA (%)

75%311543Profit Before Tax

77%16,57729,280Net Advances (Corp & SME)

10.2%7.9%

2.6%

101,497

85,884

40,371

56,948

4.8%

343

233

Quarter Ended

Dec 2005

12.1%11.1%

1.2%

159,301

125,307

64,997

94,276

4.7%

705

335

Quarter Ended

Dec 2006

--

Capital Adequacy Ratio *(%)Of which Tier I

-Net Non-Performing Assets (%)

57%Balance Sheet Size

46%Deposits

61%Net Advances (Retail)

66%Net Advances

-Net Interest Margin (%)

105%Operating Profit

44%Net Profit

Y-O-Y Change

* 3Q FY07 CAR includes the proceeds from the allotment of 75 million equity shares on January 18, 2007

All numbers in Rs. Mil except %All numbers in Rs. Mil except %

USD 3.6 Billion balance sheet size

1010

Summary Profit and Loss Statement

75%311543Profit Before Tax

233

11178

343

1,293

1,636

5918

1,045

Quarter Ended

Dec 2005

335

369208

705

1,778

2,482

1,01825

1,465

Quarter Ended

Dec 2006

44%Profit After Tax

232%-

Provisions Of which Provisions for taxes

105%Operating Profit

38%Operating Expenses

52%Total Operating Income

72%-

Non-interest IncomeOf which trading Income

40%Net Interest Income

Y-O-Y Change

All numbers in Rs. Mil except %All numbers in Rs. Mil except %

Cost-Income ratio• Dec 2006 – 71%• Dec 2005 – 79%

Fee to Total Income• Dec 2006 – 41%• Dec 2005 – 36%

Eleventh successive quarter of consistent growth in Profits

0.23

8.53

0.18

5.08

28%Earnings per share (Rs.)

68%Book Value per Share* (Rs.)

* 3Q FY07 BVPS includes the Proceeds and expanded equity due to the allotment of 75 mil equity shares on Jan 18, 2007

1111

4.7%4.8% 4.8% 4.7% 4.7%

3.0%

4.0%

5.0%

3QFY06 4QFY06 1QFY07 2QFY07 3QFY07

4.7% 4.6%

5.1%5.4%

5.6%

4.0%

4.7%

5.4%


343

566 596 622705

100

300

500

700


233 260 287 311 335

0

150

300

3Q FY06 4Q FY06 1Q FY07 2Q FY07 3Q FY07

Key Indicators of Profitability Operating Profit

Rs. Mil

Net Interest MarginCost of Deposits

Net ProfitRs. Mil

44% p.a. 105% p.a.

1212

Key Ratios

2.6%

1.1% 1.2% 1.3% 1.2%

0.0%

2.0%


Net NPL

2.3% 1.7% 1.2% 1.1% 1.0%

7.9%10.8% 11.4% 10.5% 11.1%

0.0%

10.0%


Capital Adequacy *

38% 39%35%

33% 34%

20.0%

30.0%

40.0%


Demand Deposits (CASA) Total Income

0

500

1000

1500

2000

2500


44%36%

64%56%

Fee Income

NII

12.1%11.6%10.2%

12.5%

Tier I CAR

12.6%

44%

56%

40%41%

60% 59%

* 3Q FY07 CAR includes the Proceeds from the allotment of 75 mil equity shares on Jan 18, 2007

1313

85,88493,996

103,721113,836

125,307

45,000

75,000

105,000


40,58246,783

51,87457,017

64,997

10,000

20,000

30,000

40,000

50,000


6,507

9,17810,794 11,099

13,244

3,000

5,500

8,000

10,500


101,510 113,301 124,809138,684

159,301

20,000

45,000

70,000

95,000

120,000


Positive Growth Momentum

Net Retail Assets Rs. Mil

DepositsRs. Mil

Balance Sheet Size Rs. Mil

Net Worth* Rs. Mil57% p.a.

60% p.a.

104% p.a.

46% p.a.

* 3Q FY07 Net Worth includes the Proceeds from the allotment of 75 mil equity shares on Jan 18, 2007

1414

Presentation Agenda



Strategy for Growth


SME Initiative

1515

CBOP Retail Credentials

Two wheeler loans – among the top 3 in the countryCommercial vehicles and construction equipment – among the top 10 (7-8)Mortgage loan disbursals – among the top 10 (6-7) Personal loan disbursals – among the top 10 (6-7)Bancassurance sales – Among the top 5General insurance sales – Top 3 within banksMutual fund sales – Among the top 10 within banks

Over Three million customersOne million liability customers of which 15% have been converted into wealthmanagement

Sixty Thousand new asset customers every month

1616

Retail Sales Process

Altered the Teeth to Tail Ratio across customer touch points• Branches – Hunter - Farmer strategy (over 500 relationship managers)• Consumer Finance Offices & Two wheeler dealerships – Inbuilt Powerful,

Profitable, Branded feeder channel• Direct Distribution channel (Non DSA) – UBOs key to a customer centric sales

process• Centurion Elite (Priority Banking) – Re-defining service benchmarks

Scalable sales model sustaining growth

1717

Retail Credit Process

Fully automated end-to-end web enabled credit process through FinoneTemplated credit Tailored by product & locationClear identification and definition of risk parametersCross verification of each case with two independent data-basesInternal de-duplication processField investigation carried out on every loan caseOnly bank in India that has a one on one conversation with everycustomer before a personal loan disbursalAccelerated provisioning In house Fraud Control Unit350 strong credit & collections in-house team

1818

Diversification of the retail asset portfolio

Retail Advances Dec '05

CV/CE22%

Auto11%

3W1%

Personal11%

Mortgages15%

Loans agnst sec7%

Others4%

Agri4%

2W25%

Retail Advances Dec '06

CV/CE20%

Auto4%

3W1%

Personal16%

Mortgages24%

Loans agnst sec5%

Others1%

Agri5%

2W24%

1919

4,5415,754

6,7958,006

10,274

2,000

4,000

6,000

8,000

10,000


5,9737,606

9,68112,610

15,671

4,000

7,000

10,000

13,000

16,000


8,94910,167

11,228 11,92112,993

6,000

8,500

11,000


10,49412,433

13,714 14,31415,372

5,000

8,000

11,000

14,000


Growth in Retail Assets

Mortgages Rs. Mil

Personal LoansRs. Mil

Two Wheeler Loans Rs. Mil

CV/CE Loans Rs. Mil

47% p.a.

164% p.a.

44% p.a.

126% p.a.

2020

Presentation Agenda



Strategy for Growth


SME Initiative

2121

Advances CompositionTotal Advances

Dec '05

SME11%

ELC9%

Retail71%

Corp 9%

Total AdvancesDec '06

SME12%

ELC11%

Retail69%

Corp 8%

SME – Companies with an annual turn over < Rs. 1 BilELC – Companies with an annual turn over between Rs. 1-5 BilCorp – Companies with an annual turn over > Rs. 5 Bil

2222

SME – Rapidly growing second engine

Unique co-sourcing arrangement with First India Enterprises a wholly owned subsidiary of Asia Financial Holdings which in turn is a wholly owned subsidiary of TemasekHoldingsBuilding on AFH’s expertise, knowledge and business models in the SME business across Asia and CBOP’s customer relationships and on-ground presence in IndiaArrangement entails joint origination, customer service and credit administration Templated credit with clear definition of both internal and external failure triggersCBOP undertakes the credit appraisal with the asset resting on the bank’s booksJoint relationship management with compulsory monthly customer meets

The Bank’s Corp/SME advances grew by 12%, 25%, and 17% in the last three quarters 77% Y-O-Y growth over those in the previous year

Thank You

performance review

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