ICI CICI CI Gr Group: oup: Per erfor ormanc mance e & St - - PowerPoint PPT Presentation

ICI CICI CI Gr Group:

• up:

Per erfor

• rmanc

mance e & St Stra rateg egy

June ne 201 015

Cer ertai ain statem ements s in these se slides des are e forwar ard-look

• oking

g statem ements. s. These se statem ements s are e based ed on manageme agement's s current expecta pectation

• ns

s and are e subject ect to uncer ertain ainty y and change ges s in circu cums mstan ance ces.

• s. Actual

ual res esult ults s may differ ffer material ally from

• m those

se includ uded ed in these se stateme ments nts due to a variety of factors

• rs.

. More e inform

• rmat

ation

• n about these

se factors

• rs is contai

ained ned in ICICI Bank's 's filings ngs with h the US Securi urities es and Exchange ange Commissi mission

• n.

All finan anci cial al and other er inform

• rmat

ation

• n in these

se slides, des, other er than finan anci cial al and other er inform

• rmation

n for specifi cific c subsi sidiari aries es wher ere e specifi cifical cally menti ntion

• ned,

ed, is on an unconsol solidat ated basis s for ICICI Bank Limite mited only unles ess s specifi cifical cally y stated ed to be on a consolida

• lidated basis

s for ICICI Bank Limi mited ted and its subsidi idiarie aries.

• s. Pl

Pleas ase also

• refer

efer to the e stateme tement t of unconsol solidat ated, d, consoli

• lida

dated d and segm gment ental al res esult ults s req equire uired by Indian n regul egulat ation

• ns

s that has, , along ng with these se slides, des, been en filed ed with the e stock k exchanges in India where ICICI Bank’s equity shares are listed and with the New York k Stock k Excha hange nge and the e US Securi urities s and Exchange ange Commi mmiss ssion, n, and is ava vail ilable able on our website site www.i .icici icibank.co ank.com

2

3

Indi dian an econ

• nomy
• my & ba

bankin king g secto tor

4

India: : st strong long ter erm fundam ament entals als

Favo vourable ble demogr graphic phics Health thy savings gs & investm tmen ent rates s Rising ing per ca capita income High gh potent ntial ial for infra rastru tructur ture e deve velo lopm pment ent Key drivers ers of gr growth

5

Risi sing ng shar are e of work rking ing age e populat ation ion

• Addition of around

d 12 12 million

• n to the

e workf kforce

• rce every

ery year ar for next five ve year ars

• Worki

king ng age e populat ation n to excee ceed 50%

• f total

al populat ation ion in 2025 A young g populat ation

• n with

h media dian age e of 25 year ars Depe penden dency rati tios s to rema emain low till ll 2040 2040

840 840 1,053 1,432 1,501 840 840 1,053 1,432 1,501

Favo vorable le demogra raphic hic profile file

India: : st strong long ter erm fundam ament entals als

6

Per Capita a GDP (USD)

Rising ing per er capita pita GDP acceler elerati ating ng domestic

• mestic dema

mand nd

840 840 1,053 1,432 1,501

2005 2005 2013 2013 7 749 749 1,509

Health lthy pr priva vate te con

• nsumption

sumption dr driven en by by favo vourable urable demo mograph raphics ics and rising ing income

• me levels

els

Strong domestic tic demand

India: : st strong long ter erm fundam ament entals als

7

Savin vings gs & investment vestment rates tes continue ntinue to be in excess ess of 30%

FY2003 FY2014

~25% ~25% ~32% ~32%

Investment vestment rate te

Health thy y savi vings gs & i inve vestm tment ent rate

India: : st strong long ter erm fundam ament entals als

8

Ba Bankin ing g se sector framew ework

• rk
• Bank credi

edit / GDP: ~59% 59%

• Retai

ail credi edit / GDP DP: ~10 ~10%

• Mortgag

gage e / GDP: ~5% 5%

Growth h potential tial

• High

gh propor

• rtion
• n of deposit

sit funding ng

• Conse

servat rvative e equit ity to asse sets ts

Fundin ing profile ile

• 21.5%

% of net dema mand and time me liabi abilities s (NDTL TL) ) investe ested d in government vernment secu curities

• 4.00%

% of NDTL as cash res eserv erve ratio with RBI

• Dome

mest stic c oriented balance ce shee eets

As Asset profile ile Under r penetra trated ted sect ctor

• r

9

Ba Bankin ing g se sector framew ework

• rk

Conserv rvativ tive e regu gula latory

• ry framew

ework rk

Capital al adequ quacy acy  Averag age e capital al adequacy uacy for the system em ~13% ~13%

 Impleme

ementat ation n of Basel III in FY2014 14

 Capital

al requi uireme ement nts s 1% higher her as compared ared to BCBS

 From

m April 1, 2015 loan res estructurings cturings will lead ad to the asse set being ng class ssifi fied ed as non-per performin

• rming,
• ther

er than for proje ject t loans s Asse set class ssificat fication

10

ICI CICI CI Bank: k: an ov

• verv

rvie iew

11

ICICI Ba Bank

Tier r I capital l adequacy of 12.78% 78% at March 31, 2015 as per RBI’s guidelines on Basel III norms Global l presen ence e in 17 countrie ries (inclu ludin ding g India) Diversi rsified fied loan portfolio

• lio

Investment grade ratings from Moody’s and S&P Largest gest priva vate te sect ctor r bank in India ia in terms of total assets Large ge customer er base

12

ICI CICI CI Bank: k: foc

• cus

us & ob

• bjectives

tives

13

Focus s & ob

• bjec

ectives ives

Balance ance sheet t str trength ngth Profitability fitability imp mprove

• veme

ment nt Achiev ieved sustain stained ed imp mprovement vement in retu turn rn ratio tios

• Robust

t fundin ing g profile file

• Di

Dive versified rsified loan mix with incr crea easing ing share of retail il

• Granular

lar & s stable e inco come e streams ms

• Efficien

iciency of operation tions

14

Focus s & ob

• bjec

ectives ives

Balance ance sheet t str trength ngth Profitability fitability imp mprove

• veme

ment nt Focus s on imp mprove

• veme

ment nt in retu turn rn on equity ty

• Robust

t fundin ing g profile file

• Di

Dive versified rsified loan mix with incr crea easing ing share of retail il

• Levera

erage ge capital l for gr growth

• Granular

lar & s stable e income e streams ms

• Efficien

iciency of operation tions

• Normalis

lisatio tion n of credit it costs

15

Per erfo forma rmanc nce e over er the e yea ears

Health thy y balance ce sheet t gr growth

• ~ 16% CAGR

R in domes estic c loans s since ce Mar 2011

• ~20% CAGR

R in ret etai ail loans s since ce Mar 2012

• ~17% CAGR

R in CASA deposits sits since ce Mar 2009

• Retai

ail deposi sits s as % of domes estic c deposi sits increa creased sed from

• m ~50% at

Mar 2009 to ~76% % at Mar 2015 Robust funding ng profile file Dive versifi fied ed loan mix

Strong g core operatin ting g perform

• rmanc

nce e

16

Per erfo forma rmanc nce e over er the e yea ears

Granul anular ar revenue venue streams eams Improv

• vem

ement ent in oper erating ng effi ficie ciency cy

• Costs

s contai ained ned while continuing inuing scale le up in distribu bution n & inves estment ents s in technology chnology

• Margi

gin n impro prove veme ment nt driven ven by focus s across ss busines nesses ses

• Domes

mestic tic marg rgins ins improv proved ed by y ~100 bps since ce FY2010 10

• Overse

erseas as margins gins impr proved ved from

• m 0.41%

1% in FY2010 10 to 1.65% % in FY2015 15 Cost-inc ncome

• me (%)

17

Per erfo forma rmanc nce e over er the e yea ears

Sustaine ned impro rovem emen ent t in retur urn n ratios

• s
• About 90

90 bps improv provem ement ent in Standal alon

• ne

e RoA over FY2009 09

• Consoli
• lidat

dated ed RoE improv proved ed from

• m less

ss than 8% in FY2009 09 to 15.0% % in FY2015 15

Driven iven by focused used execut ution ion of arti ticulated culated str trate tegy gy

• NIM impro

prove ved by 15 15 bps to 3.48%

• Retai

ail fee ee growt

• wth rem

emai ained ned healthy hy

• ~20% growth
• wth in divi

viden dend d income

• me

Operating ting perfo form rmanc nce e remain ined ed robust; t; healthy thy funding ng profile ile and strong ng retail il portfol folio gr growth h maintain ined ed

NII I grew ew by y 16% Non Non-inte interest rest income come grew ew by 17%

• Cost-to

to-inco come me ratio

• improv

proved ed from

• m

38.2% % in FY2014 14 to 36.8% % in FY2015 Oper erat ating ng effici ficiency

FY2015: 15: per erforma rmanc nce e rev eview ew

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FY2015: 15: per erforma rmanc nce e rev eview ew

Slippa page ges s from restru ructur tured ed loans increa eased sed gi given n prolong

• nged

ed economic ic weakness & slow recovery ery

FY2014 14 Gross

• ss NPA additions

ns 45.40 ` billion FY2015 15 80.78 New NPA PA forma rmation tion 38.13 35.49 New NPA PA forma rmation tion and res estru tructur turing ng 104.46 46 89.43

Aggrega gregate te new NPA A for

• rma

matio tion n and d restructuring tructuring add dditi tions

• ns

lower th than n FY2014 014

Less ss: slippage pages s from

• m res

estruc uctured ured loans 7.27 45.29 Rest structuring cturing additions ns 66.33 53.94

FY2015: 15: per erforma rmanc nce e rev eview ew

Sta tanda ndalone lone RoA imp mproved

• ved by 10 bps to

to 1.8 .86% 6% despite te high gher r credit it costs ts Consolidate lidated d RoE at t 15.0 .0%

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Looking ng ahead

22

Oper erati ating ng en environme

• nment

nt

Renewed optimism regarding India’s growth prospects

• However

ever, positiv tive e trend ends s in private vate sector

• r cash

flows s & invest vestme ments nts yet to be see een Signs ns of impro prove veme ment nt in econo nomi mic c indicator cators

• Inflation

n ease sed d from

• m

8.5% % in April 2014 to 5.2% % in March h 2015

• RBI initiat

ated poli

• licy

cy rat ate e red educti ction; n; Repo rate e cut by 50 bps to 7.5%

23

Outlook

• k for financ

ncial ial se services es

Revival al in economic mic gr growth h will presen sent t several al opportun tunitie ities

Buoy

• yancy

ncy in markets rkets & capi pita tal l flows

• ws into

to India ndia Oppo pportuni rtunities ties for

• r insur

urance, ance, asset set manageme nagement, nt, securities urities & priv rivate te equi uity ty Focus cus on manuf nufacturing acturing, , infrastr frastruc uctur ture e & urb rbani anisati sation Oppo pportuni rtunities ties acro ross s all l finan ancia ial l serv rvices ices busine sinesses ses Rising ing income comes & posi

• sitiv

tive e demo mogr graphi aphics Conti

• ntinued

nued oppo pportuniti rtunities es for r retai tail l financial nancial serv rvices ices

24

ICICI Group

Savin vings gs Investments vestments Cap apital ital Flo lows Pro rotec tection tion Cred edit

Spanning ning th the spectru trum m of finan nancial cial service rvices

25

Our posi sitioni ioning ng & s streng engths ths

Strong g franchi hise e across business ess segm gments nts

• Strong

ng and growi

• wing

ng ret etai ail fran anch chise se

• Wel

ell establ ablishe shed corpo porat ate e fran anch chise se along ng with

• ver

erse seas as presen sence ce

• Sustai

ained ned privat ate sector ctor marke ket leadershi adership

• RoE>30

>30%

• Sustai

ained ned priv ivat ate sector ctor marke ket leadershi adership

• RoE~20

~20%

• Improv
• ved

ed marke ket position

• Strong

ng fund perfo forman ance ce

• Strong

ng franc nchis hises es capital alising ng on fav avou

• urabl

able e marke kets

• Focus

s on profi fitabilit bility

26

Our posi sitioni ioning ng & s streng engths ths

Exten ensiv ive e ge geogr grap aphi hical l presen sence

~52% of branch ches es in semi mi- urban n and rural al area eas

Suppleme upplemented nted by ~12,450 450 ATMs Ms

27

Our posi sitioni ioning ng & s streng engths ths

Leaders ership ip in technolo

• logy

gy

Key initiat atives: ves: focus s on custome

• mer experi

erience ence 24*7 Touch Banki king ng branch ches Rich ch mobile banking ng app Banki king ng on Social al media dia Refr freshe shed & intuit uitive ve internet ernet banking ng website site India’s First Digital Bank

e-wallet for all - whether customer or not

28

Our posi sitioni ioning ng & s streng engths ths

Leaders ership ip in technolo

• logy

gy

Key initiat atives: ves: focus s on payme ments Contactl actless ss cards Transit sit cards

Corporat

• rate

client nts i-Bizz zz Trade de online ne FX online ne

Dedicat dicated solutions ns for governme ernment clients

e-Auct uctio ion

29

Our posi sitioni ioning ng & s streng engths ths

Strong g capital l position ion Consolid lidated ted Basel III I total capital l adequacy ratio

• at 17.20%,

0%, Tier r 1 ratio

• at 12.88

88% at Ma March ch 31, 2015

March ch 31, 2015 Ti Tier er I CAR 17.02% 2% 12.78% 8%

Standa andalone lone capital pital

30

Focus on levera ragin ging g investm tmen ents s made so far

Expand nded ed branch network work Signific nificant nt invest vestme ments nts made e in techno chnology

• gy

Focus s on sustain staining ing average rage CASA A rati tio in 38 38-40 40% % range ge

Key ey priorities ities going forward rd

Sustain n strong g fundin ing g profile ile

31

Sustain n domestic ic loan gr growth h of 3-4% 4% high gher er than banking g system

Contin tinue ue focus us on diversif rsifica ication tion & granularity nularity

Key ey priorities ities going forward rd

32

• Susta

tain in momen mentum tum while le mainta intaining ining heal althy thy mix

Home e loans

• Auto

to: Focus cus on impro provi ving g pro rofi fitabil tability ity

• CV:

V: Recove

• very

y in econo

• nomic

mic activity ivity to pro rovide vide push sh

Vehicle hicle loans

• Focus

cus on scalin ling g up gro rowth; th; closel

• sely

y linked ked to current rrent account count deposits eposits

Busines ness s banking ng loans

• Conti
• ntinue

nue to grow

• w while

le monitori nitoring ng risk sks

Unsecured ecured loans

Retail il assets: : segm gmen ent t wise prioriti

• rities

es

Key ey priorities ities going forward rd

Target geting ing contin tinued str trong ng portf tfolio lio growth th

33

Focus on rural l & s semi-ur urban n markets ts

Network

• rk

Approach to lending Bran anch ches es Gram amin n Bran anch ches es BCs & CSPs Selective geographical approach Partner ner linka kage ges

Focus s on growth th to to co contin tinue ue while le mo monitoring toring risks ks

Key ey priorities ities going forward rd

Collat ateral al based ed lend nding Granul anular ar portfolio folio 2,106 6 branc nches hes ~20 mn basic c banking ng a/cs ~15% of retail ail loans s ~35% y-o-y y grow

• wth in

FY2015 15 Dive verse product ct suite

34

Corporat rate e & SME lendin ing: g: selectiv tive e approach ch to credit dit gr growth th

Incre rease ase lend ndin ing g to high h rated ted clien ents Focus cus on granul anular ar lendin nding Conti

• ntinued

nued close se monitori nitoring ng and nd pro roactive tive action tion

Key ey priorities ities going forward rd

35

Intern ernationa tional l busines ess: s: focus on profita itabili bility ty and retur urns ns Lendin ding g primaril arily to India ian corpora

• rates

es Branches es

• Grow

rowth th calibra librated ted to glo lobal al funding nding markets rkets & Indi dian n corpo rporate ate credi edit t demand emand

• Focus

cus on comme mercial rcial banking anking, , includi luding ng working rking capital pital lines nes for r Indi ndian an compa mpanies nies abroad broad & & MNCs s engaged gaged in trade ade with Indi dia

• Non

Non-residen esident t Indi ndian ans a key custo tomer mer segmen ment

Investm tmen ents s reduc uced ed to <6%

• f net worth

Subsidia diarie ries

• Conti
• ntinued

nued focus us on opt ptimi imising sing capi pita tal

• Focu

cus s on working rking capital pital lines nes, , trade ade & transacti ansaction n banking anking prod roduc ucts ts to MNCs Cs, , selec lect t loca

• cal

l market rket corpo rporates ates & Indi ndian n compa mpanie nies abr broad ad

Key ey priorities ities going forward rd

36

In su summary ary

Sustaine ned focus on strengt ngthe heni ning g franchi hise

2009 onwar ards

Driv iving ng structu uctural ral impr prove veme ments nts Achie ieved ved significant gnificant impr prove veme ment nt in balan alance ce sheet et & operating perating par arame ameters ters Focu cus s on grow rowth; th; enhancing hancing franchise anchise

2011 onwar ards

Scal aled ed up p retai tail business; siness; continued ntinued inves vestmen tments s in distrib stribution ution & techno hnology gy

Continu nue e to expand d retail ail franchi hise Maintain in technolo

• logy

gy leaders ershi hip Sustain n operatin ting g effic icien iency Selectiv tively ely gr grow corporat rate e portfolio folio with focus on gr granul ularity rity & h high gher er rated clien ents ts Improve

• ve capital

l efficien ciency

Targeting geting higher gher consolida nsolidated ted RoE

Focus on profita itabilit ility of subsidia diarie ries & retur urn on capital

In su summary: ary: key ey priorities ities

38

Thank k you