Investor Presentation September 2011
Disclaimer This presentation has been prepared by The Dhanlaxmi Bank (the “ Bank ”) and is being furnished to you, the recipient, solely for your information and may not be reproduced, delivered or transmitted (in whole or in part), directly or indirectly, by any means to any other person in any other manner. This presentation contains certain forward looking statements concerning our future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition, economic growth in India, ability to attract and retain highly skilled professionals, time and cost overruns on contracts, government policies, fiscal deficits, regulations among others. We do not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by on our behalf. No part of this presentation shall be reproduced, copied, forwarded to any third party either in print or in electronic form without our prior express consent. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities of the Bank by any person in any jurisdiction. No part of this presentation should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. 2
Agenda 1 Overview - A Renewed Dhanlaxmi 2 A Well Balanced Franchise - Ready to Leapfrog 3 Financial Highlights 4 Business Strategy 5 Strong Industry Fundamentals 6 Annexure 3
A Renewed Dhanlaxmi
Dhanlaxmi: An Emerging Private Sector Bank Incorporated at Thrissur, Kerala in 1927 History Total asset base rose to Rs. 150 billion as at June 30, 2011 (+67%) on a y-o-y basis Growth A broad customer base of 1.6 million as at June 30, 2011 Breadth A network of 275 branches & 452 ATMs spread across 140 locations in 14 states Reach Capital adequacy of 11.4% with a Tier-I ratio of 9.3% as at June 30, 2011 Strength Employee strength increased from 1,402 as of Mar 31, 2009 to 4,744 as on June 30, 2011 Capacity Emerging nationwide banking franchise with retail, SME and corporate banking focus Market Position 5
A Rich History Launched the Forex Card in September 2011 Launched the Retail Gold Coin business in June 2011 Launched its 275 th branch in Jan 2011; ATM network expanded to 442 2011 A broad customer base of 1.6 million Raised Rs. 381 crores through QIP in July 2010 Acquired 15% stake in Destimoney Opened 20 new branches and 280 new ATMs 2010 Launched new brand identity; created platform for a unified image Increase in employee base to 4,351 as at December 2010 Product distribution agreement with five of the largest MFs Opened 45 new branches and 102 new ATMs Agreement with Bajaj Allianz to distribute their life and non-life products Built scale and a technological platform 2009 Awards / Recognition: “India’s Fastest Growing Mid - size Bank” by Business Today (KPMG survey) Awarded “Best bank in the private sector” by the State Forum of Bankers’ Clubs Mr. Amitabh Chaturvedi joins Dhanlaxmi as MD & CEO 2008 Rights issue of Rs. 199 crores - Net worth increased to over Rs. 300 crores Mr. Raja Mohan Rao, the largest shareholder diluted to 10% as per the revised RBI guidelines 2007 Change in Board with induction of highly experienced professionals 2002 Rights issue - raised Rs. 27 crores 1 st ATM rolled out 2000 1996 IPO - raised Rs. 24 crores and listed on NSE, BSE & Cochin Stock Exchange 1980 Increased the branch network to 100 1977 Granted status of a Scheduled Commercial Bank 1 st Branch set up outside Kerala 1975 1 st Branch established 1937 1927 Year of Incorporation 6
In Investment Mode Organization restructuring, branch expansion, technology upgradation and specialized staffing - Completed Initiated & strengthened alternate channels since Mar’09 - ATMs, Internet Banking, Mobile Banking and IVR Investment in modern and aspirational branding exercise - Completed Growth in Total Income Headcount Cost / Income Ratio (No.) (%) (Rs. Cr) 84 83 4,260 411.9 68 4,080 56 146.8 49% 232 47% 201 1,411 1,402 91 141 79 265 42 34% 141 31% 122 99 FY 08 FY 09 FY 10 FY 11 31-Mar-08 31-Mar-09 31-Mar-10 31-Mar-11 FY 08 FY 09 FY 10 FY 11 Employees Staff Cost/Total Income Net Interest Income Non Interest Income Opex / Assets Business Mix Growth in Operating Cost (%) (%) (Rs Cr.) 4 4 4 3.1 5 345 2.8 16 15 20 2.6 21 2.3 39 193 38 40 64 113 97 41 38 35 16 FY 08 FY 09 FY 10 FY 11 FY 08 FY 09 FY 10 FY 11 Mar-10 Sep-10 Dec-10 Mar-11 Retail Corp SME Agri 7
Re-Booting the Franchise Advances and Deposits CASA 2,869 12,530 29% (Rs. Cr) 24% 1,552 9,065 7,098 1,208 1,055 23% 22% 4,969 5,006 3,608 3,196 2,102 31-Mar-08 31-Mar-09 31-Mar-10 31-Mar-11 31-Mar-08 31-Mar-09 31-Mar-10 31-Mar-11 Advances Deposits CASA (Rs. Cr) CASA (%) Credit Deposit Ratio Asset Quality (%) Gross NPA (%) 72 71 64 2.95 58 1.99 1.54 0.74 31-Mar-08 31-Mar-09 31-Mar-10 31-Mar-11 31-Mar-08 31-Mar-09 31-Mar-10 31-Mar-11 8
Front-ended Investments to provide Long Term Structurally Strong Franchise Product Suite - Created an Extensive Customer Touch Points Bouquet of Services (Almost 3x in 18 Months) 275 Branches Across Product Spectrum 442 ATMs Retail Loans - Mortgages, Commercial Property, Loan 1.6m Loyal against Property, CE Financing, Dealer Financing, Auto 1 HP Customer Base Loan, Loan against Gold / Securities PB 7 HAR 6 39 New Delhi Wholesale Banking - Working Capital Finance, BGs, LCs, 16 UP(E) Bills Discounting, Term Loans, Project Finance 12x Increase since 3 RAJ Dec 2009 GUJ 22 MP 3 18 WB SME Group / Microfinance & Agriculture, Credit Card, Internet Banking Retail Transactions Debit Card IVR, Voice chat in FY11 97 MAH Third-Party Products - MF, Insurance, Forex, Depository, Mobile Banking Goa 3 68 AP Online Brokerage , Retail Gold Coins, Forex card etc. 59 KK Liabilities - Current, Saving, Term, Recurring, NRI, 142 TN KER 449 Roaming Account etc. Payment Services - Bill Pay, Money Transfer, Charity, Religious Offerings, Mobile Banking etc. 9
Nearly 58,000 Shareholders Form Part of the Dhanlaxmi Family Shareholding Pattern as at June 30, 2011 Top FII Shareholders % stake Others (1) Tiaa-CREF 4.2 Banks / Financial Institutions, 0.2% Resident Individuals 5.3% Non Resident Indians Swiss Finance Corporation 3.9 5.6% India Max Investment Fund Ltd 3.6 36.0% Lotus Global Investment Ltd 3.5 Corporate Bodies 17.2% Rhodes Diversified 3.3 Elara India Opportunities Fund 3.2 HSBC Indian Equity Mother Fund 2.5 Bessemer India Capital Partners 2.1 35.7% Foreign Institutional BNP Paribas Arbitrage 1.8 Investors Jupiter India Fund 1.2 Investment limits for FIIs / NRIs at 49% and 24% respectively FIPB approval received – FDI limit at 74% (1) Includes insurance companies, Mutual funds, Trusts and Clearing members 10
A Well Balanced Franchise Ready to Leapfrog
Reincarnation 1 Perception change: From SME focused South India based Bank to a well diversified pan India bank 2 Sharpening Focus: Well Defined Business Segments 3 New brand identity with increase in customer touch points 4 Change in management profile: A younger work force 5 Revamped Risk organization 6 Robust technology platform 7 Ability to leverage multi-channel distribution network & strengthen fee income 12
1 Revamp Towards a Favorable Business Mix on Track - Region Wise Loan Book By State (%) By Geographic Region (%) 27 27 28 44 45 47 57 81 73 73 72 56 55 53 43 19 31-Mar-09 31-Mar-10 31-Mar-11 30-Jun-11 31-Mar-09 31-Mar-10 31-Mar-11 30-Jun-11 Non-Kerala Kerala Non-South South India Deposits By State (%) By Geographic Region (%) 39 39 48 54 55 68 75 91 61 61 52 45 46 32 25 9 31-Mar-09 31-Mar-10 31-Mar-11 30-Jun-11 31-Mar-09 31-Mar-10 31-Mar-11 30-Jun-11 Non-South South India Non-Kerala Kerala 13 13
1 Revamp Towards a Favorable Business Mix on Track - Advances As at March 31, 2010 As at March 31, 2011 As at June 30, 2011 Retail 16% Agri. & Retail Retail Micro Fin. 5% 36% 41% 39% 46% WBG WBG WBG (1) 64% 15% SME Agri. & Micro Fin. 4% 15% 16% Agri. & 3% Micro Fin. SME SME Total Advances +229% 9,065 9,674 (Rs. Cr) 7,771 7,057 5,329 5,006 3,196 2,939 Dec-08 Mar-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 (1) Wholesale Banking Group; 14 14
2 Well - Defined Business Segments - Sharpening Focus Retail Banking and MFI Assets Wholesale Banking SME Branch Banking Distribution Liability Reach Alternate Channels and Network 15 15
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