Past Reflections and Future Ambitions Presentation at CLSA India - PDF document

Past Reflections and Future Ambitions Presentation at CLSA India Conference November 13, 2017

Started with a Set of Management Beliefs  Universal Banking: All products and services for target market  Strategize once, Execute daily  Differentiation through Responsive Innovation  Liability Driven Strategies for Balanced Growth  Effective use of Technology: To Find, Serve and Engage customers  Efficient Distribution to leverage Customers and Capital  Robust Risk Management: Credit, Operations & Market  Sustainability: Good Ecology is Good Business 2

Staging of the Growth Strategy: Business Plans Split into 3-Year Planning Cycles (PC) 3

PC 1 (FY 09-11) – Restoring Health and Profitability Select Focus Areas Centralize Risk with Right Pricing Book Capital Light Distribution Businesses Liability & Fee Driven Branch Franchise Ring Fence Great Business: Vehicles Re-talent & Performance Manage 4

PC 1 (FY 09-11) – Key Performance Vectors NIM (%) RoA (%) RoE (%) 1.46 3.47 19.30 1.53 6.80 0.34 FY08 FY11 FY08 FY11 FY08 FY11 Cost-to-Income (%) NNPA (%) Revenue per Employee (Rs lac) 2.27 30 67.20 48.30 21 0.28 FY08 FY11 FY08 FY11 FY08 FY11 5

PC 2 (FY 12-14) – Scale With Profitability To be No. 1 in terms of Select Focus Areas  ROA  ROE Scale Up e.g. Used CV, Investment Banking  NIM Create Boosters: LAP, Cards, Mortgages Invest to grow… Double 2 Capacity Creation: Capital, CBS, Network  Profits  Clients  Branches Revamped Global Markets Team In 3 years Responsive Innovation Theme 6

PC 2 (FY 12-14) – Key Performance Vectors NIM (%) RoA (%) RoE (%) 3.71 QIP – Rs 19.30 1.81 2000 crs 17.49 3.47 1.46 FY11 FY14 FY11 FY14 FY11 FY14 Cost-to-Income (%) NNPA (%) Revenue per Employee (Rs lac) 48.30 0.33 31 30 0.28 45.71 FY11 FY14 FY11 FY14 FY11 FY14 7

PC 3 (FY 15-17) – 3D To Double The Bank Select Focus Areas Non-Vehicle Retail Assets Home Markets Development Corporate Bank Specialist Verticals Acquisition of Diamond Portfolio Digitization of Businesses 8

PC 3 (FY 15-17) – Key Performance Vectors NIM (%) RoA (%) RoE (%) 1.86 17.49 QIP & Pref. 3.99 Allot. 15.26 Rs 5,081crs 1.81 3.71 FY14 FY17 FY14 FY17 FY14 FY17 Cost-to-Income (%) NNPA (%) Revenue per Employee (Rs lac) 40 0.39 47.10 46.74 0.33 31 FY14 FY17 FY14 FY17 FY14 FY17 9

Last 10 Year IndusInd Bank Journey: Delivered Scale with Profitability 10

Key P&L & Balance Sheet Parameters Revenue (Rs cr) Net Profit (Rs cr) Networth (Rs cr) 10,234 2,868 20,272 CAGR of 37% CAGR of 38% CAGR of 50% 598 1,110 75 2008 2017 2008 2017 2008 2017 Deposits (Rs cr) CASA (% of Deposits) Advances (Rs. Cr) 1,13,081 1,26,572 36.90% CAGR of 23% CAGR of 27% 15.70% 19,037 12,795 2008 2017 2008 2017 2008 2017 11

Key Performance Vectors NIM (%) RoA (%) RoE (%) 16.48 4.00 1.90 6.80 1.53 0.34 FY08 Q2FY18 FY08 Q2FY18 FY08 Q2FY18 Cost-to-Income (%) NNPA (%) Revenue per Employee (Rs lac) 2.27 67.20 48 45.70 21 0.44 FY08 Q2FY18 FY08 Q2FY18 FY08 Q2FY18 12

PC 4 (FY 18-20) Strategy 13

PC 4 (FY 18-20) – Ambition 4D To Double the Bank in terms of  Clients  Loans  Profits 14

PC 4 (FY 18-20) – Strategy Planning Cycle 4 (2017 – 20) Market Share with Profitability Do More of the Same Strategy Digitize to Differentiate, Diversify and Create Domain Leadership Financing Livelihoods Broad Themes Finding Customers from Within Reengineering Our Businesses Sustainable Banking 15

PC 4 (FY 18-20) – Pillars of Growth Planning Cycle 4 (2017 – 20) Loan Growth 25% - 30% 40% CASA Ratio Exceed Balance Sheet Resulting in Revenue Growth Growth RoRWA > 2.4% Branch Network 2,000 Customer Base Double to >20mn 16

What is Attracting Management Attention?  Scaling Proven Verticals  Vehicle Finance  Non-Vehicle Retail Products  Microfinance  Investment Banking  Treasury 17

What is Attracting Management Attention?  Search for New Leadership Domains Vehicle Finance Diamond ? Financing Microfinance ? 18

What is Attracting Management Attention?  Manufacture vs. Distribute  Insurance  Wealth Management 19

What is Attracting Management Attention?  Turning up in Future Growth Hotspots  Consumer Digital Lending  Affordable Housing 20

What is Attracting Management Attention?  Enhanced X-Sell  Consumer with Vehicle  Corporate with Consumer 21

What is Attracting Management Attention?  Improving Organisational Efficiency  Reducing Funding Costs  Optimising Organisational Structures  Branch Re-design 22

What is Attracting Management Attention?  Digitization of Businesses  Enriching Client Experience  Online Ecosystem Partnerships  Responsive Innovation 23

What is Attracting Management Attention?  Adding Qualitative Aspects  Sustainable Practices  Integrated Reporting  Impact Lending 24

What is Attracting Management Attention?  Covering the New Frontier – Rural India  Bridging the Rural Last Mile  New Branch Outlet Strategy  Leveraging the Government Infrastructure  Completing Bharat Financial Inclusion Merger 25

Key Learnings From Our Journey 26

Key Learnings  Getting it right more important than being there first  Risk Management – Centralised vs. De-centralised  Importance of Managing Operational Risk  Organisational Agility a Strategic Imperative 27

Th Thank ank Yo You