Corporate Presentation – Q3 FY20
Disclaimer This presentation has been prepared by and is the sole responsibility of IDFC FIRST Bank (together with its subsidiaries, referred to as the “Company”) . By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer or recommendation to purchase or subscribe for, any securities of the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contractor commitment therefore. In particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India. 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 the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. There is no obligation to update, modify or amend this communication or to otherwise notify the recipient if information, opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Certain statements contained in this presentation that are not statements of historical fact constitute “forward -looking statements. ” You can generally identify forward-looking statements by terminology such as “aim”, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “objective”, “goal”, “plan”, “potential”, “project”, “pursue”, “shall”, “should”, “will”, “would”, or other words or phrases of similar import. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. Important factors that could cause actual results, performance or achievements to differ materially include, among others: (a) material changes in the regulations governing our businesses; (b) the Company's inability to comply with the capital adequacy norms prescribed by the RBI; (c) decrease in the value of the Company's collateral or delays in enforcing the Company's collateral upon default by borrowers on their obligations to the Company; (d) the Company's inability to control the level of NPAs in the Company's portfolio effectively; (e) certain failures, including internal or external fraud, operational errors, systems malfunctions, or cyber security incidents; (f) volatility in interest rates and other market conditions; and(g) any adverse changes to the Indian economy. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. The Company may alter, modify, regroup figures wherever necessary or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. 2
Q3 FY 20 Results Update: IDFC FIRST Bank: Rapid Strides across all the Strategic Priorities On merger between Capital First and IDFC Bank, the newly created Bank, IDFC First Bank, had put forward key Strategic Priorities. We are happy to report that we are staying steadfast on the course laid out as the future plan and are firmly on course on the projections. During the quarter ended 31 December, 2019, the Bank recognized one legacy telecom exposure as stressed and provided 50% provisioning on the total exposure which resulted in a net loss for the quarter. We believe the bulk of the legacy troubled exposures inherited from IDFC Bank are now appropriately provided for. We have made strong progress on the following fronts: 1. Assets (As of 31 Dec 2019) a. Growing the Retail Loan book: Retail Book has increased to Rs. 51,506 crores (grown by 15,270 crores in 12 months since merger) b. Increase proportion of Retail Loans: Retail Book as a % of Total Funded Assets reached 49% (36% at merger) c. Reducing Infrastructure Book. Infrastructure book decreased to Rs. 15, 016 crores (reduced by Rs. 7,695 crore in 12 months since merger) d. Reducing Wholesale loan book: W/S loan book decreased to Rs. 42,951 crore (reduced by Rs. 13,858 crore in 12 months since merger) 2. Liabilities (As of 31 Dec 2019) a. Increasing CASA Deposits. CASA Deposits grown to Rs. 16,204 crore (Grown by Rs. 10,930 crore in 12 months since merger) b. Improving CASA Ratio. CASA Ratio has improved to 24.06% as on 31 Dec 2019 from 8.68% at merger as on 31 Dec 2018. c. Core Deposits (Retail CASA and Retail TD) Rs. 29,267 crore (Grown by Rs. 18,866 crore in 12 months since merger) d. Improving Core Deposit Ratio. Improved to 21.78% as on 31 Dec 2019 from 8.04% at merger as on 31 Dec 2018. 3
Q3 FY 20 Results Update: IDFC FIRST Bank: Rapid Strides across all the Strategic Priorities 3 . Asset Quality remains high a. Bank GNPA at 2.83% ( 2.62% as of 30/09/19), Net NPA at 1.23% ( 1.17% as of 30/09/2019) b. Improved Retail Asset Quality: GNPA at 2.26% ( 2.31% as of 30/09/19), Net NPA at 1.06% ( 1.08% as of 30/09/2019) 4. Strong Capital Adequacy: a. Capital Adequacy Ratio is strong with CET-1 Ratio at 13.28% . b. Since Tier 1 capital is high, bank can comfortably raise total capital adequacy to 18% by raising T1/T2 bonds 5. Earnings and Profitability: a. Strong NII Growth: NII grew 34% YOY to Rs. 1,534 crore in Q3 FY20 compared to Rs. 1,145 crore in Q3 FY 19. b. Strong improvement in NIM: NIM has improved to 3.86% Q3 FY20 from 2.89% for Q3 FY19 (merger quarter). c. Strong growth in Total Income (NII + Fees + other income) YOY up 50% at Rs. 2,113 crore for Q3 FY20 cs Rs. 1406 crore for Q3 FY19 d. Improving Cost to Income Ratio: 73.52% for Q3 FY20 as compared to 81.38% for Q3 FY19 (merger quarter) e. Bank recognized an legacy exposure of Rs. 3,244 crores (Rs. 2000 crore funded, Rs. 1,244 crores as Spectrum Guarantee) to a large telecom account as stressed and took provisions of Rs. 1,622 crores. Also provided Rs. 110 crores to one legacy Thermal Power account. As a result bank posted a loss of Rs. 1639 crores. f. With these provisions, bank has adequately provided for almost all legacy infrastructure accounts adequately. 4
5 SECTION 1: THE FOUNDING OF IDFC FIRST BANK 11 SECTION 2: VISION & MISSION OF IDFC FIRST BANK SECTION 3: MARKET OPPORTUNITY 13 Table SECTION 4: PRODUCT OFFERING 21 of Contents SECTION 5: FINANCIAL PERFORMANCES 24 SECTION 6: DIRECTORS & SHAREHOLDERS 47 SECTION 7: STRATEGY GOING FORWARD FOR THE COMBINED ENTITY 52 SECTION 8: CAPITAL FIRST STRATEGY, LOAN GROWTH AND PROFITABILITY 57 TRENDS FOR 8 YEARS (BEFORE MERGER WITH IDFC BANK)
SECTION 1: The Founding of IDFC FIRST Bank • Events Leading to Merger – ✓ Erstwhile IDFC Bank - Origin & History ✓ Erstwhile Capital First - Origin & History ✓ Merger between Erstwhile IDFC Bank and Erstwhile Capital First ✓ Erstwhile IDFC Bank Financials Trends leading to merger ✓ Erstwhile Capital First Financials Trend leading to merger
Section 1: The Founding of IDFC FIRST Bank.. IDFC FIRST Bank was founded by the merger of Erstwhile IDFC Bank and Erstwhile Capital First on December 18, 2018. 7
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