Experience Next Generation Banking Investor Presentation July - 2016
Safe Harbor No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be “forward looking statements”, including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actual results may differ materially from these forward-looking statements due to a number of factors, including future changes or developments in the Company’s business, its competitive environment and political, economic, legal and social conditions in India. This communication is for general information purpose only, without regard to specific objectives, financial situations and needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares in the Company and neither any part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation can not be copied and/or disseminated in any manner. 2
Contents Business Strategy Performance Matrix Next Generation Bank An Inflection Point About Us 3
Business Strategy 4
Our Strategy… • Focus on retail loan products Expand • Efficient branches for faster processing of loans Retail • Continuous training of work force Business • Invest in Brand Building • Cluster based approach in industry hubs Strengthen • Sole Banker to SMEs for all banking needs SME Base • Dedicated vertical to penetrate SME banking • Strategy & Road map in place to increase CASA funds Improve • Centralized processes allowing branches to focus on CASA garnering low cost funds • Granulize loan portfolio to spread out risk Enhance • Cautious approach on large corporate lending Asset • Special recovery cell for monitoring non performing and Quality restructured assets • Focus on increasing banking services for SME, Retail & NRI Improve clients share of • Enhance treasury capabilities & increase bench strength other • Expand PoS & ATM Network Income 5
…Our Performance is in Line with our Strategy Expand Retail Business Strengthen SME Base Improve CASA (Ex cl. Gold) Rs. 24,609 Crs Rs. 9,830 Crs 23.24% INCREASE INCREASE INCREASE 20% YoY 20% YoY 96 bps YoY Enhance Asset Quality Improve share of other (Restructured Book) Income Rs. 1,387 Crs Rs. 173 Crs DECREASE INCREASE 36% YoY 67% YoY 6
We will continue to focus on our Core Strengths 02 03 01 Increase … Retail Business … SME Business … CASA More Products Sole Banker Retail SME Relationships Relationships 05 04 06 Sustainable… Increase… Improve Asset Quality Fee Income NIM 7
...Increase Retail & SME Business 02 03 01 Retail Hub Centralize Marketing & Cluster • Home Loan • Auto Loan Processing Branches • MSME Loan Centre (Kochi) • LAP Loan Processing Retail Business Branch Profitability • • • Enhanced risk management Penetrate further in the Focus on particular existing set of Customers geographies and open • KYC compliance and fraud additional branches • prevention tools Faster Sanctions • Improve Branch Profitability 8
…by focus on Housing Loans in Retail Retail Breakup Housing: Key Initiatives Rs Crs • Retail hub in Cochin to increase focus on 10,093 10,002 housing finance 9,382 9,368 9,250 1,049 1,063 • Two more hubs to be set up – one in 910 1,057 1,008 973 South India and one in North India 925 941 872 858 • Branch staff being given specific training to market mortgage loans 2,521 2,410 1,733 1,801 1,998 • Marketing initiative through TVCs • Tailor made products for different 1,540 1,510 1,559 1,564 1,501 segments 1,417 1,371 2,003 1,655 1,455 April to June 2016 • Housing Loans Sanctioned : 826 Nos. 2,677 2,614 2,499 2,369 2,241 • Amount of Housing Loans Sanctioned – Rs. 165 cr Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Others Service & Traders Gold LAD* Manufacturing Housing 9 *LAD = Loan against deposits
…becoming a Banker of Choice to SMEs Loan Book by Geography – Q1 FY17 Average SME Loan / Account Rs Lakhs Rest of India 23% 15.56 Kerala 15.33 15.28 15.26 44% 13.70 South (Ex- Kerala) 33% SME Highlights • Dedicated DGM appointed to ensure focus and better coordination with regions • Focused ‘Green Channel’ branches to drive faster loan growth to SMEs • Target to become banker of choice to SMEs thereby getting other business as well – liabilities, vehicle finance, etc. Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 • Ongoing training (in-house as well as external) 10
…with the help of our Branch Network Total Branch Network +4.0% 838 834 822 794 738 688 FY12 FY13 FY14 FY15 FY16 Q1 FY17 Total ATM Network +14.3% No of 1,287 1,291 Branch Location* 1,200 Branches 1,000 Kerala 453 800 663 South India (Ex-Kerala) 245 Rest of India 140 Total 838 FY12 FY13 FY14 FY15 FY16 Q1 FY17 *Map for illustration purpose only 11
… and our Experienced Employees Employee Addition Total Employees: 6,975* 7,137 14 75 41 1% 13% 6,975 32 22% 34% 30% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Closing < 1 Year 1-2 Years 2-5 Years 5-10 Years > 10 Years *Employees include full-time officers and clerks. 12
Performance Matrix 13
Strong Deposit Franchise Core & Non-Core Deposits Rs Crs June-16 June-16 June-16 48,634 9,255 57,889 11% 13 % 1 % 43,173 9,151 52,324 June-15 June-15 June-15 Core Deposit Non-Core Deposit Total Deposit CASA Deposits June-16 June-16 June-16 Rs Crs 2,187 11,267 13,454 8% 15% 17% 2,034 9,622 11,656 June-15 June-15 June-15 Current Deposit Savings Deposit Total CASA 14
Core Deposits Growing... Breakup of Deposits CASA Deposit Rs Crs 57,889 Rs Crs +15% 55,721 53,441 53,036 13,454 52,324 11,656 2,187 2,034 11,267 9,622 35,230 34,059 32,334 33,204 31,517 Jun-15 Jun-16 Current Savings Term Deposits Rs Crs +12% 11,267 10,476 9,622 9,915 10,177 35,230 31,517 2,187 2,034 1,983 2,157 2,130 9,151 9,203 9,205 8,630 7,930 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Jun-16 Term Savings Current Others* 15 *Others includes: Bulk, Certificates of Deposits
NRI Deposits Growing… NRI Deposits CASA Rs Crs In (%) +23% 15,025 14,303 23.2 23.0 13,566 22.8 12,904 22.3 22.4 12,193 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sept-15 Dec-15 Mar-16 Jun-16 16
Composition of Loan Book Corporate Advances (Above Rs 25 Crs) Segment wise Break Up Rs Crs Rs Crs -2% 6,194 , 16,857 16,584 16,317 16,099 15,998 15,998 , 14.74% 38.07% 9,830 , 23.39% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Retail Advances Rs Crs +16% 1,417 , 3.37% 26,026 25,686 24,017 23,358 22,503 8,585 , 20.43% Corporate Retail Ex Gold Gold SME Agriculture Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 17
Key Focus : Retail, SME & Agriculture Retail excluding Gold Gold ( Average LTV – 65%) Rs Crs Rs Crs 2,003 8,721 8,585 Retail Loans (Excl. 7,927 7,595 1,655 7,365 Gold), Agriculture & 1,455 1,417 1,371 SME has grown by 20% Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Agriculture SME Rs Crs Rs Crs 6,194 ~15% of the 9,823 9,830 5,770 5,549 9,086 5,352 8,756 4,917 8,218 Agriculture & SME Loans are backed by Additional Security by way of GOLD Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 18
Advances growing across Regions Rs Crs 42,024 41,785 40,601 40,215 38,851 12,715 12,549 12,440 12,289 11,899 13,315 13,556 13,178 13,187 12,682 15,994 15,680 14,983 14,739 14,270 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Rest of India South Ex- Kerala Kerala 19
Net Interest Income - Quarter Net Interest Income Cost of Deposits & Yield on Advances Rs Crs In % Cost Of Deposit Yeild on Advances 407 388 374 374 340 11.49 11.38 11.21 10.56 10.89 7.85 7.53 7.38 7.24 6.98 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sept-15 Dec-15 Mar-16 Jun-16 Net Interest Margin Cost of Funds & Yield on Funds In % In % Cost of Funds Yield on Funds 2.92 2.81 2.74 2.63 2.54 9.39 9.28 9.21 8.78 8.73 7.07 6.71 6.55 6.38 6.30 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Jun-15 Sept-15 Dec-15 Mar-16 Jun-16 20
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