Investor Presentation – Q4 FY 2012 April 2012
Disclaimer This presentation is strictly confidential and may not be copied, published, distributed or transmitted. The information in this presentation is being provided by Development Credit Bank Limited (the “Bank”). This presentation has been prepared for information purposes only and is not an offer or invitation, directly or indirectly, to buy or sell any securities, nor shall part, or all, of this presentation form the basis of or be relied on in connection with, any contract or investment decision in relation to any securities. This presentation is not an offer document or a prospectus under the Companies Act, 1956, as amended, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended and any other applicable law. This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Bank, which are expressed in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition, performance, or achievements of the Bank or industry results to differ materially from the results, financial condition, performance or achievements expressed or implied by such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding expansion plans and the benefits there from, fluctuations in our earnings, our ability to manage growth and implement strategies, intense competition in our business including those factors which may affect our cost advantage, our ability to attract and retain highly skilled professionals, changes in technology, availability of financing, our ability to successfully complete and integrate our business plans, liabilities, political instability and general economic conditions affecting our industry. Given these risks, uncertainties and other factors, recipients of this document are cautioned not to place undue reliance on these forward-looking statements. The Bank disclaims any obligation to update these forward-looking statements to reflect future events or developments. This presentation is not an offer of securities for sale in the United States or in any other jurisdiction. Securities may not be offered or sold in the United States absent registration or an exemption from registration. No shares or other securities may be offered or sold other than in compliance with the laws of relevant jurisdictions, including the United States Securities Act of 1933, as amended. By viewing this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Bank and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the business of the Bank. Except as otherwise noted, all of the information contained herein is preliminary and indicative and is based on management information, current plans and estimates. Industry and market-related information is obtained or derived from industry publications and has not been verified by us. The information contained in this presentation, except as otherwise noted, is only current as of the date of the presentation, is subject to change without notice. The Bank may alter, modify or otherwise change in any manner the content of this presentation, without any obligation to notify any person of such revision or changes. Persons relying on the information in this presentation should do so at their own risk and the Bank shall not be responsible for any kind of consequences or liability to any person arising out of, relying and acting upon any such information. Financial numbers are rounded off to nearest whole number 2 Private & Confidential
DCB Bank – Overview � DCB Bank – at a Development Credit Bank Ltd (DCB Bank) http://www.dcbbank.com is a modern emerging new generation private sector bank. Present since 1930s, DCB is the only co-operative bank in India to have been converted into a private sector commercial bank glance in 1995 � Distribution network of 84 branches across 28 cities and 320 ATMs (as on March 31, 2012) � Business model focused on achieving a balance between Micro SME, SME, Retail Mortgages, mid-Corporate and Agri / Comprehensive Inclusive Banking product range & � Comprehensive range of banking products across all businesses scalable � infrastructure Modern systems and infrastructure to support growth- Finacle, FinnOne, CMS, Internet and Mobile banking Traditional loyal � Traditional sticky customer base helped by presence of branch network in key areas of Maharashtra, Gujarat and AP customer base � Provides DCB Bank access to low cost deposits Focus on building � Continued focus on building a low cost Deposits and strong capital position low cost franchise � CASA of 32.12% and CRAR of 15.41% under Basel II (as on March 31, 2012) � Steady improvement Rating agencies have re-affirmed the rating guidelines for DCB Bank (as on September 30, 2011) in credit ratings � Crisil rating (Long term): BBB + / Stable, Crisil rating (Short term): A1 and Fitch rating: BBB / Stable � DCB’s promoter, Aga Khan Fund for Economic Development (AKFED) http://www.akdn.org/akfed is present in 16 countries Robust promoter employing over 30,000 people background � Promoter group holds 19.20% stake in DCB ( as on March 31, 2012) � Pedigreed board and Nasser Munjee, Chairman: Ex- Executive Director – HDFC, instrumental in setting up IDFC & sits on the boards of many large Indian companies experienced � management team Murali M. Natrajan, MD & CEO: worked in Standard Chartered Bank (Global Head – SME Banking), Citibank, American Express; strong Retail Banking & SME experience in India & abroad For detailed ‘Overview’, please refer to pages 29 - 33 3 Private & Confidential
Financial Performance 4 Private & Confidential
Highlights Q4 FY Q4 FY Inc / Inc / INR mn FY 2012 FY 2011 2012 2011 (Dec) (Dec) Net Profit 173 114 52.2% 551 214 157.0% Total Income 870 794 9.5% 3,304 3,012 9.7% Operating Profit 239 220 8.7% 838 861 (2.6%) Provisions (66) (107) 38.3% (287) (646) 55.57% Cost to Income Ratio (72.49%) (72.31%) - (74.63%) (71.43%) - INR mn Mar 31, 2012 Mar 31, 2011 Deposits 63,356 56,102 CASA 20,347 19,755 Advances 52,844 42,817 INR mn Mar 31, 2012 Mar 31, 2011 CASA Ratio 32.12% 35.21% Gross NPA Ratio 4.40% 5.85% Net NPA Ratio 0.57% 0.96% Provision Coverage Ratio 91.17% 87.64% Credit/Deposit Ratio 83.41% 76.32% ROA 0.68% 0.32% ROE 8.38% 3.52% 5 Private & Confidential
FY 2012 - Summary What went well? What could have been better? � Profits more than doubled � CASA growth was weak although new � Steady Income growth acquisitions was strong � NIM compression in the last quarter due to � Diversified Fee Income steep rise in cost of funds � � Continued growth in Retail Deposits Credit / Deposit ratio is high due to tight liquidity conditions � Strong growth in MSME, SME and Retail � Slippage in Corporate NPAs Mortgages � Cost to Income Ratio � Further improvement in Gross and Net NPAs � Coverage Ratio above 90% � Capital raising completed in a difficult market situation � Permission to open branches in Tier 2 to Tier 6 � New ATMs roll out � Stable management team 6 Private & Confidential
Huge Improvement in Profits Net Profit / Loss * INR mn 173 156 133 88 551 114 383 214 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 (785) (881) FY 2009 FY 2011 FY 2012 FY 2008 FY 2010 * Net Profit / (loss) represents post tax numbers 7 Private & Confidential
Steady improvement in Income, quality Net Interest Income INR mn 2,277 1,972 571 597 1,891 591 1,861 1,420 519 502 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Other Income INR mn 299 292 1,626 262 1,201 1,121 234 1,027 231 1,071 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 8 Private & Confidential
Costs recycled to create new businesses Staff Cost INR mn 1,246 310 317 1,044 315 1,064 304 292 971 881 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Other Cost INR mn 321 317 1,376 1,420 1,220 298 284 1,088 282 1,127 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 9 Private & Confidential
Cost to Income still a challenge Operating Income INR mn 3,487 3,304 870 859 822 3,173 753 3,012 794 2,491 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 Operating Cost INR mn 80.62% 72.31% 73.80% 72.50% 76.27% 74.63% 71.43% 78.07% 74.62% 68.56% 630 634 2,466 2,420 613 2,152 2,008 588 574 2,391 Q4 FY11 Q1 FY12 Q2 FY12 Q3 FY12 Q4 FY12 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 10 Private & Confidential
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