IDFC First Bank Limited
14,445words
3turns
0analyst exchanges
0executives
Key numbers — 40 extracted
rs,
rs
3
60%
Rs. 1,83,236
26%
Rs. 1,64,726
44%
77%
46.4%
2.11%
0.68%
1.53%
Guidance — 16 items
Corporate Banking
opening
“Total Customer Deposits Section 6: Deposits & Borrowings Deposits: Strong growth in Total Customer Deposits • Total Customer Deposits (Retail Deposits + Wholesale Deposits) has grown strongly by 4 Year CAGR (Mar-19 to Mar-23) of 36%.”
Corporate Banking
opening
“Cr Infrastructure Bonds Long Term Legacy Bonds Other Bonds Refinance Total Balance As on Sep-22 As on Sep-23 H2-FY24 7,742 6,508 2,392 3,807 5,908 6,129 1,105 1,860 0 1,310 349 930 FY25 5,071 1,226 124 930 20,449 15,002 2,589 7,351 4,731 FY26 Beyond FY26 RoI (%) 837 3,593 301 0 0 0 331 0 331 8.94% 9.11% 8.95% 8.25% 8.92% • Because we have a DFI background, the legacy borrowings are costing the bank 8.92%.”
Corporate Banking
opening
“• Commercial Vehicles Financing includes Construction Equipment 34 Bank has run down Infrastructure Project financing Book to below 2% of funded assets Section 7: Loans & Advances Infrastructure Financing Book (Rs.”
Corporate Banking
opening
“• Based on this, we expect a lower level of NPA formation in future.”
Corporate Banking
opening
“This indicates lower NPA levels going forward.”
Corporate Banking
opening
“Crore) 4Y CAGR: 27% 9,706 7,380 32% 12,635 34% increase in NII in H1 FY24 on YoY basis against balance sheet growth of 24% YoY 30% 5,753 7,695 6,076 21% 4,845 25% FY19* FY20 FY21 FY22 FY23 H1 FY23 H1 FY24 • Net Interest Margin (NIM) on AUM for Q2-FY24 was 6.32% as compared to 5.83% in Q2-FY23 and 6.33% in Q1-FY24.”
Corporate Banking
opening
“Crore) 4,142 4Y CAGR: 37% 2,691 2,716 47% increase in Fee and Other income in H1 FY24 on YoY basis 1,550 1,622 66% 1,167 5% 33% 54% 1,844 FY19* FY20 FY21 FY22 FY23 H1 FY23 H1 FY24 • Fee and Other Income for Q2-FY24 increased 46% YoY from Rs.”
Corporate Banking
opening
“launched and fee-based • Many of these products are in the early stage of their lifecycle and have the potential to grow significantly going forward.”
Corporate Banking
opening
“Crore) Balance Sheet growth Core operating profit growth (Pre-merger standalone Bank) 397 (Post merger) -11% 1,105 60% H1 FY19 (Annualized) H2 FY19 (Annualized) 4Y CAGR: 43% 2,753 26% 67% 17% 44% 1,764 9% 1,909 8% 4,607 41% YOY growth in Core Operating Profit in H1-FY24 against 24% Balance sheet growth 2,883 2,040 FY20 FY21 FY22 FY23 H1 FY23 H1 FY24 • Core operating profit for Q2-FY24 increased 38% YoY from Rs.”
We are building a world class bank with
opening
“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.”
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Risks & concerns — 15 flagged
Crore) % of Loans & Advances 36.7% 26,832 19.4% 21,459 13.8% 14,315 9.2% 10,808 5.3% 6,891 2.9% 4,664 1.8% 3,356 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23 35 Section 8: Risk Management & Asset Quality a.
— Corporate Banking
Retail, Rural & SME Finance i) Risk Management Funnel ii) Underwriting Processes iii) Trend of Bounce rates iv) Trend of collection efficiency v) SMA (1+2) vi) Trend of NPA Ratios vii) Product wise NPA Ratios as of 30 September 2023 c.
— Corporate Banking
Wholesale Banking i) Underwriting process ii) Risk Management d.
— Corporate Banking
Net Stressed Assets 36 36 Section 8: Risk Management & Asset Quality The Bank has developed unique capabilities for Risk Management Cash Flow Assessment (Bank statements, GST filings, Bureau Data etc.) Debit Instruction to Bank Asset Quality • The Bank lends on the basis of cash flow assessment – A.
— Corporate Banking
Retail, Rural & SME Loans Section 8: Risk Management & Asset Quality Bank has utilized the new Indian digital Ecosystem for better controls in lending Stage of Loan Processing KYC Risk Scorecards Bureau Earlier • Physical - copies of Passport, Ration Card, etc.
— Corporate Banking
Retail has least Gross NPA and Net NPA for over a decade Section 8: Risk Management & Asset Quality Segment Gross Advances Breakup Gross NPA Net NPA PCR% Retail, Rural and SME Finance Corporate (Non-Infrastructure) 27,802 Infrastructure Financing 3,168 Overall Bank Level Bank (Excl Infra.) 1,46,783 1.53% 0.52% 85.06% 2.56% 0.11% 97.73% 25.07% 14.58% 62.81% 1,77,754 2.11% 0.68% 84.09% 1,74,585 1.69% 0.46% 87.71% • The significant and growing part of the book, i.e.
— Corporate Banking
Retail, Rural & SME Loans Section 8: Risk Management & Asset Quality The Bank has a 10 Step Stringent Underwriting Process (1/2) 1 2 3 4 5 6 No-Go Criteria The Bank evaluates certain quick no-go criteria such as deduplication against existing records, bank validation and minimum credit parameter rules.
— Corporate Banking
Retail, Rural & SME Loans Section 8: Risk Management & Asset Quality The Bank has a 10 Step Stringent Underwriting Process (2/2) 7 8 9 Industry Check The Bank checks for further credit history and industry level exposure by doing CRILC checks and checks by external entities, where required, to study financials, access to group companies whether legal cases have been filed against the company, disqualification of directors, etc.
— Corporate Banking
Retail, Rural & SME Loans Section 8: Risk Management & Asset Quality Bank has tightened underwriting norms which has resulted in low cheque bounces on presentation 9.9% 6.6% • • First EMI (FEMI) represents Cheque returns in the FIRST month after Booking.
— Corporate Banking
Retail, Rural & SME Loans Section 8: Risk Management & Asset Quality Low cheque bounces is further supported by high collection efficiency at 99.5% Definition: Collection Efficiency % = (EMI Collected for the Month)/ (EMI Due for the month)* 100 Note: Total collections does not include any arrear collections, or prepayment collections in these calculations, and hence represents the true picture of collections efficiency.
— Corporate Banking
Retail, Rural & SME Loans Section 8: Risk Management & Asset Quality High collection efficiency leads to low SMA SMA-1 & SMA-2 portfolio as % of total Retail, Rural & SME Loan Book 0.89% 0.85% 0.77% Sep-22 Jun-23 Sep-23 • • SMA 1 is the overdue portfolio in Bucket 31-60 days, and SMA 2 is the overdue portfolio in 61-90 days.
— Corporate Banking
Retail, Rural & SME Loans Section 8: Risk Management & Asset Quality Bank has maintained High Retail asset quality GNPA of ~2% and NNPA ~1% for a decade across cycles • • In this segment, asset quality maintained through Economic slowdown, demonetization, GST, ILFS Crisis.
— Corporate Banking
Retail, Rural & SME Loans Section 8: Risk Management & Asset Quality All Product of the Bank have low Gross and Net NPA Here we share the Gross and Net NPA of individual products in Retail, Rural & SME Loan book.
— Corporate Banking
Most of the products have GNPA ratio at less than 2% and NNPA ratio at less than 1%, a result of stringent underwriting and risk management funnel described earlier.
— Corporate Banking
Wholesale Financing Section 8: Risk Management & Asset Quality Stringent Underwriting Process in Wholesale Business 1 Customer Selection • All New-To-Bank potential borrowers (incl.
— Corporate Banking
Speaking time
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Opening remarks
Wide range of Fund and Non-Fund Based Products
The Bank launched many new products and services in building a strong, sustainable, diversified deposit and asset franchise power by digital innovations Section 5: Products and Services The Bank has developed a wide Product Suite of a Universal Bank Retail Lending Solutions Home Loans, vehicle Loans, Consumer Loans, Education Loans, Personal Loans, Used Car Loans, Gold Loans, Rural Finance, Tractor Finance Working Capital demand Loans, Cash Credit, Term Loans, Corporate Bonds / NCDs, Foreign Currency Loans Corporate Lending Corporate Lending Retail Lending Supply Chain Financing Dealer Vendor finance, finance, TREDS, Factoring, Invoice discounting Supply Chain Financing Treasury & Forex Solutions Correspondent banking, FX Solutions, Cross-border SWIFT, Government Bonds & Strips, Liberalized Remittance Scheme, External Commercial Borrowing, Treasury solutions incl. forwards,options, swaps etc. Treasury & Forex Solutions Transaction Banking & CMS NEFT/RTGS/IMPS Payments, Transfers (ACH,
Corporate Banking
Comprehensive funded and non-funded product solutions for Corporate customers Working Capital Loans Trade Finance, Forex & CMS Solutions Term Loans 20 The Bank has a wide range of Current and Savings Account Offerings FIRST Booster Current Account • • • • • Targeted for SMEs and Entrepreneurs Auto - Sweep funds into a FD above 2 lacs balance in the current account No pre-mature breakage penalty for breakage of FDs Nil average monthly balance requirement; Free VISA Platinum Debit Card with unlimited ATM transactions at IDFC FIRST Bank ATM; Free UPI QR and bulk payment; Complimentary doorstep banking; Zero transaction charges through NEFT/RTGS/IMPS Section 5: Products and Services Startup Current Account for new age startups, TASC Institutional Account for specific needs of Trusts, Associations, Societies, Clubs, Educational Institutions, Hospitals • Merchant Multiplier account with specific proposition for merchants, • • • World Business Accounts for the corporates with domestic & inter
We are building a world class bank with
- Highest levels of corporate governance - Stable balance sheet growth of ~20-25%, - Robust asset quality of GNPA less than 2% and net NPA of < 1% - High teens ROE - Contemporary technology and - High levels of Customer Centricity. 86 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,
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