Annual Investor Presentation May 2016 Contents 1 OVERVIEW & - PowerPoint PPT Presentation

Edelweiss Financial Services Annual Investor Presentation – May 2016

Contents 1 OVERVIEW & BUSINESS APPROACH 2 PERFORMANCE HIGHLIGHTS 3 BUSINESS HIGHLIGHTS 4 ENTERPRISE UPDATE 5 DETAILED FINANCIALS 2

OVERVIEW & BUSINESS APPROACH 3

Our Vision “To be a Respected Financial Services firm with a Portfolio of High Quality Growth Businesses” 4

Our Business Approach Leadership Culture Risk & Governance Culture that promotes Zero tolerance policy entrepreneurship and towards Compliance & Risk innovation without compromising on institutionalization Diversification De risked model enhances sustainability Good mix of Strong Enterprise Wholesale & Retail Functions Creates scalability along with Backbone of our high growth profitability businesses 5

Diversification Strategy Led to a Unique Business Model… EDELWEISS Credit Non Credit Insurance WELL DIVERSIFIED Unique Model that is “Scalable, Stable and Profitable” 6

One of the Leading Diversified Financial Services Firms CREDIT BUSINESSES One of the top 5 Diversified Financial Present across the spectrum of Services Firms Wholesale Retail • Structured Collateralized Credit • Mortgages • Real Estate • SME & Agri-Financing ~ 32,100 Cr On Balance Sheet Assets • Distressed Assets Credit • LAS & others Assets under Management ~32,100 Cr Assets under Advice NON CREDIT BUSINESSES ~29,500 Cr Strong product franchise serving diverse client needs # of clients • Capital Markets • Balance Sheet ~887,000 • Wealth Management Management Unit • Asset Management • Agri Services & Others # of employees ~6,227 # of offices 237 INSURANCE 4,500 One of the fastest growing Life Insurance companies # of client touch points 7

Over the Next Four Years… Our aim is to grow our diversified business model to... • Grow PAT consistently at 20-25% • Maintain NPA below 2% • Improve RoE • Maintain a healthy Capital Adequacy Ratio  Consolidated from 12.9% to 16-18% • Enhance long term credit rating from AA+ to AAA  Ex Insurance from 18.6% to 19-20% • Improve Ex Insurance RoA from 1.8% to 2.3- 2.5% • Improve Ex Insurance Cost to Income ratio from 60% to 50% 8

FY16 PERFORMANCE HIGHLIGHTS 9

Key Financial Highlights 1 Consolidated PAT growth of 26% & Ex Insurance PAT growth of 36% 2 Consistent growth in profits over last 5 years 3 Consolidated RoE improved to 12.9%; Ex Insurance RoE: 18.6% 4 Credit has been a key driver 10

Consolidated PAT Growth of 26% and Ex Insurance of 36% 1 (INR Cr) FY15 FY16 % Growth PAT 329 414 26% Consolidated PAT 381 519 36% Ex Insurance Balance 27,072 32,145 19% Sheet 11

Key Performance Parameters Edelweiss Private Banks NBFC/ DFS For FY16 (Ex Insurance) 16% 9% PAT growth (YoY) 36% 21% 13% 38% 4 year PAT CAGR 24% 21% 33% Credit Book Growth Net Revenue 6.1% 7.9% 7.8% RoA 1.7% 1.9% 1.8% RoE 12% 17% 18.6% 39% C/I 46% 60% GNPA 1.4% 1.3% 3.2% NNPA 0.47% 0.5% 0.7% 2.1X 1 - 1.25X 1.5 – 2X Collateral Cover 12 Competition numbers based on published results and management analysis (on Consolidated Basis) Cost to income (C/I) excludes credit provisions Private Banks: HDFC, ICICI, Kotak, Axis, Yes , Indusind NBFCs/DFS : Bajaj Finserv, L&T Finance, Tata Capital, Reliance Capital, Aditya Birla NBFC, Mahindra Finance, IIFL

Consistent track record of growth since FY12 2 Profit after Tax INR Cr 154 133 120 111 103 98 122 90 89 106 72 70 69 68 96 62 91 88 57 83 51 79 78 48 46 61 58 56 51 46 46 42 40 39 Q4'FY12 Q1'FY13 Q2'FY13 Q3'FY13 Q4'FY13 Q1'FY14 Q2'FY14 Q3'FY14 Q4'FY14 Q1'FY15 Q2'FY15 Q3'FY15 Q4'FY15 Q1'FY16 Q2'FY16 Q3'FY16 Q4'FY16 Ex-Insurance PAT Consol PAT Ex Insurance PAT CAGR of 38% since FY12 13

Ex Insurance RoE Improved to 18.6% 3 Consolidated RoE % Ex-Insurance RoE% 18.6% 15.6% 12.9% 12.2% 11.3% 11.3% 8.2% 7.6% FY13 FY14 FY15 FY16 FY13 FY14 FY15 FY16 Consolidated RoE Q4FY16: 14.5% 14 Equity represents Tangible Networth

RoA Attribution (Ex Insurance) FY16 FY15 FY14 NII 5.1% 5.5% 5.3% Interest 12.8% 12.0% 11.6% Treasury 1.2% 2.2% 1.9% Interest Cost -8.8% -8.6% -8.1% Non-interest income 2.7% 2.9% 2.6% Fee & commission 2.4% 2.7% 2.4% Other income 0.3% 0.2% 0.2% Expenses -5.2% -5.7% -5.1% Employee cost -2.5% -2.9% -2.5% Depreciation & amortization -0.3% -0.3% -0.3% Operating expenses -1.7% -1.8% -1.9% -0.6% -0.6% -0.4% Provisions PBT 2.6% 2.8% 2.8% Tax -0.8% -1.0% -0.9% PAT 1.8% 1.9% 1.9% 15

Credit has been a key driver 4 PAT INR Cr Credit Non Credit Insurance 414 329 337 220 107 230 170 182 30 152 101 -51 -53 -104 FY14 FY15 FY16 16

BUSINESS HIGHLIGHTS 17

Diversified Mix of Businesses CREDIT NON CREDIT INSURANCE Present across : Strong product franchise One of the fastest serving diverse client growing life insurance Wholesale needs: companies • Structured • Capital Markets Collateralized Credit • Real Estate • Wealth Management • Distressed Assets • Asset Management Credit • BMU & Liquidity Retail Management • Mortgages • Agri Services & Others • SME & Agri-Financing • LAS & others 18

Financial Snapshot EoP Profit Networth After Tax RoE%* (INR Cr) Credit Business 2,321 337 17.0% Non Credit 1,112 182 22.3% Total Ex-Insurance 3,433 519 18.6% Insurance 939 -104 - Total 4,372 414 12.9% 19 Numbers are Management Estimates * On Average Equity; adjusted for intangibles and minority interest; PAT of Insurance relates to Edelweiss share in losses

BUSINESS HIGHLIGHTS – CREDIT 20

Credit Business at a glance Credit Business INR (Cr) 20,014 Capital Employed 6.8% NIM NII 1,200 Cost to Income 44% Provisions 160 337 PAT GNPA 1.4% NNPA 0.47% RoE 17.0% 2.0% RoA Balance Sheet Credit Non Credit Insurance Numbers are Management Estimates . Capital Employed is End of Period

Credit Portfolio is a Mix of Differentiated and Scalable Assets • Customized credit solutions, with high Structured SME & Agri Collateralized Credit collateral cover Mortgages LAS and Financing 2,641 Others 1,440 Distressed 13% 1,940 7% • Caters to wide a range of residential Real Estate Assets Credit 10% developers 1,896 9% • Largest ARC in India, with more than 7 years Distressed Assets Credit of history in distressed assets space • Catering to Retail Home buyers and Business Mortgages Owners • Agri Financing is $10 bn unorganized market; SME & Agri Financing Highly scalable and unoccupied by institutional players Structured Collateralized • Includes Micro Finance solutions to clients in Real Estate LAS and Others Credit 5,347 Tier III/IV cities and rural areas 6,750 27% 34% Balance Sheet Credit Non Credit Insurance 22

Present across Retail, SME and Wholesale segments Wholesale Credit Retail Credit • Comprises of • Comprises of • Collateralized Lending to Corporate • Housing Finance • Real Estate • SME & Agri Financing • Distressed Asset Credit (ARC) • LAS & Rural Finance • Began credit operations in 2007 • Commenced operations in 2011 • A robust risk management approach tested • Small Ticket Housing Loans launched in over 2 downturns FY13; Rural Finance in FY14 • Wholesale credit around INR 14,000 crores • Retail credit around INR 6,000 crores • Controlled growth, focus on credit quality • Operations in 45* cities Profitable… …Highly scalable 23 * HF + SME+ Rural Finance

Business Strengths Client Centric Solutions • Ability to understand client needs and structure products to suit their needs • Strong client relations Proactive Risk Management • Three tier risk management approach – Business risk team supplemented by Global risk team & Global Risk Committee • Robust underwriting and credit appraisal processes Good Asset Quality • NPAs in check even in tough market conditions • Comfortable asset cover 24

Credit – Improving Parameters At the end of FY16 FY15 FY14 Average Interest Yield 16.2% 15.8% 15.1% Average Cost of Borrowing 10.7% 10.9% 10.3% Interest Spread 5.5% 4.9% 4.7% Net Interest Margin 6.8% 6.7% 6.7% 45 cities & 36 cities & 22 cities & Retail Credit Presence* 3400 villages 750 villages 400 villages ~Number of Retail Credit clients 304,000 50,000 18,000 Retail Finance Spreading Footprint Through Small-ticket Home Loans, SME & Rural Finance Balance Sheet Credit Non Credit Insurance 25 * HF + SME+ Rural Finance

Credit: Robust Asset Quality At the end of (INR Cr) FY16 FY15 FY14 Total Credit Book 20,014 15,036 8,953 Pvt. Banks NBFCs Gross NPLs 281 196 82 1.3% 3.2% Gross NPL % 1.40% 1.31% 0.92% Net NPLs % 0.47% 0.38% 0.25% Total Provision Held* 247 184 82 0.5% 0.7% Total Provision Cover* 88% 94% 100% Collateral 2.1x 2.3x 2.6x 1 -1.25X 1.5-2X Housing Finance & LAP ~50% ~52% ~55% portfolio LTV Risk Management ensuring asset quality remains under control Balance Sheet Credit Non Credit Insurance 26 * Including provision held on Standard Assets

BUSINESS HIGHLIGHTS – NON CREDIT 27