IDFCFIRSTB

� IDFCFIRST �Bank IDFCFIRSTBANK/SD/SE/186/2018-19 March 29, 2019 The Manager-Listing Department The Manager-Listing Department National Stock Exchange of India Limited BSE Limited Exchange Plaza Phiroze Jeejeebhoy Towers Bandra Kurla Complex, Sandra (East) Dalal Street, Fort Mumbai 400 051 Mumbai 400 001 Tel No.: 022 - 2659 8237 I 38 Tel No.: 022 - 2272 2039/ 37 I 3121 NSE-Symbol: IDFCFIRSTB BSE - Scrip Code: 539437 Sub.: Intimation of the updated Investor Presentation of the Bank pursuant to recent changes in Board of Directors of the Bank under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations1 2015 ("Listing Requlations"] Dear Sir I Madam, With reference to our letter bearing IDFCFIRSTBANK/SD/SE/147 /2018-19 dated February 05, 2019, wherein we had submitted the copy of the Investor Presentation on the debut results of the Bank for the quarter and nine months ended December 31, 2018 to Stock Exchanges, please find attached the updated version of the said Investor Presentation pursuant to recent changes in Board of Directors of the Bank. Please take the above on record and acknowledge the receipt of the same. Thanking you, Yours faithfully, For IDFC FIRST Bank Limited (Formerly known as /DFC Bank Limited) Satish Gaikwad Head - Legal & Company Secretary IDFC FIRST Bank Limited (formerly IDFC Bank Limited) Naman Chambers, C 32, G Block, Sandra Kurla Complex, Bandra (East), Mumbai 400051 Tel: +91 22 7132 5500 Fax: +91 22 2654 0354 Registered Office: KRM Towers. 7th Floor, No. 1, Harrington Road, Chetpet, Chennai 600031. Tel: +91 44 4564 4000 Fax: +91 44 4564 4022 CIN: L65110TN2014PLC097792bank.info@idfcbank.comwww.idfcfirstbank.com � IDFC FIRST LCJ Bank Corporate Presentation: Debut Results of IDFC FIRST Bank (Q3 FY19) 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. � IDFCFIRST 2 E...J Bank SECTION 1: FOUNDING OF IDFC FIRST BANK 4 SECTION 2: PATH AHEAD 11 Table 17 SECTION 3: PERFORMANCE HIGHLIGHTS of SECTION 5: ASSETS Contents 20 26 SECTION 6: LIABILITIES 30 SECTION 7: FINANCIALS 33 SECTION 8: DIRCETORS & SHAREHOLDERS l=-'I IDFC FIRST E....J Bank SECTION 1: The Founding of IDFC FIRST Bank � IDFC FIRST E.J Bank The Founding of IDFC FIRST Bank.. SECTION 1: FOUNDING OF IDFC FIRST BANK I D F C � IDFC FIRST E.J Bank IDFC BANK IDFC FIRST Bank is founded by the merger of Erstwhile IDFC Bank and Erstwhile Capital First on December 18, 2018. 5 SECTION 1: FOUNDING OF IDFC FIRST The Founding of IDFC FIRST Bank.. BANK EVENTS LEADING TO THE MERGER in January 2018- At IDFC Bank side. IDFC Limited was set up in 1997 to finance infrastructure focusing primarily on project finance and mobilization of capital for private sector infrastructure development. Whether it is financial intermediation for infrastructure projects and services, whether adding value through innovative products to the infrastructure value chain or asset maintenance of existing infrastructure projects, the company focused on supporting companies to get the best return on investments. The Company’s ability to tap global as well as Indian financial resources made it the acknowledged experts in infrastructure finance. Dr. Rajiv Lall joined the company in 2005 and successfully expanded the business to Asset Management, Institutional Broking and Infrastructure Debt Fund. He applied for a commercial banking license to the RBI in 2013. Owing to his efforts, in 2014, the Reserve Bank of India (RBI) granted an in-principle approval to IDFC Limited to set up a new bank in the private sector. Thus Erstwhile IDFC Bank was created by demerger of the infrastructure lending business of IDFC to IDFC Bank in 2015. The parent entity, IDFC Limited, retained businesses of AMC, Institutional Broking and Infrastructure Debt Fund business through IDFC Financial Holding Company Limited (NOFHC). The shares of Erstwhile IDFC Bank Limited were listed in the exchanges in November 2015. During the subsequent three years, the bank developed a strong and robust framework including strong IT capabilities and infrastructure for scaling up the banking operations. The Bank designed efficient treasury management system for its own proprietary trading, as well as for managing client operations. The bank diversified from being a predominantly infrastructure financier to wholesale banking operations. Since a large portion (90%) of the bank was wholesale (infrastructure and corporate loans) as a legacy from IDFC Limited until 2017, the company swiftly put together a strategy to retailise its loan book. Retail required specialised skills for the marketplace, seasoning, and scale for profitability, the Bank was looking for a retail lending partner who already had scale, profitability and specialized skills, to merge with. As part of its strategy to diversify its loan book from infrastructure, the bank was looking for a merger with a retail finance institution with adequate scale, profitability and specialized skills. 6 SECTION 1: FOUNDING OF IDFC FIRST The Founding of IDFC FIRST Bank.. Contd. BANK EVENTS LEADING TO THE MERGER in January 2018- At Capital First side Around the same time (2010-2017), while these events were playing out at IDFC Group, certain events were playing out in parallel at Capital First. Mr Vaidyanathan who had built ICICI Bank’s Retail Banking business from 2000-2009 and was the MD and CEO of ICICI Prudential Life Insurance Company in 2009-10, quit the group for an entrepreneurial foray. During 2010-11, he acquired a significant stake in a listed real-estate financing diversified NBFC and then prepared the ground for a Leveraged Management Buyout of the firm by launching retail financial businesses for small entrepreneurs and consumers. He built a technology-driven retail loan book of Rs. 770 Cr by March 2011, and presented this as proof of concept to global private equity players for a management Buyout. Meanwhile, he exited non-core businesses like retail equity broking, Foreign Exchange Business, and other unrelated business. In 2012, he concluded India’s largest Management Buyout by securing equity backing of Rs. 810 Crores from Warburg Pincus, got fresh equity into the company and founded Capital First as a new entity with new shareholders, new Board, new business lines, and fresh equity infusion. Between March 31, 2010 to March 31, 2018, the Company’s Retail Assets under Management increased from Rs. 94 crores to Rs. 25,243 Cr. The company financed seven million customers through new age technology models. The credit rating increased from A+ to AAA. The Gross and Net NPA reduced from 5.28% and 3.78% respectively to 2% and 1% respectively and the asset quality remained consistently high. Further, the company turned around from losses of Rs. 30 crores and Rs. 32 crores in FY 09 and FY 10 respectively, to Rs. 327 crores by 2018, representing a 5 year CAGR increase of 39.5%. The loan assets grew at a 5 year CAGR of 29%. The ROE steadily rose from 2.5% in 2013 to near 15%. The market cap of the company increased ten-fold from Rs. 780 crores on in March 2012 at the time of the LBO to over Rs. 7800 crores in January 2018 at the time of announcement of the merger. Funding could be a constraining factor, so the company was looking out for a banking license. Capital First, in the meanwhile, was on the lookout for a commercial banking license in order to access large pool of funds for growth and to access low cost of funds. 7 SECTION 1: FOUNDING OF IDFC FIRST The Founding of IDFC FIRST Bank BANK In January 2018, IDFC FIRST Bank and Capital First announced that they had reached an understanding to merge with each other and shareholders of Capital First were to be issued 139 shares of the merged entity for every 10 shares of Capital First. The Competition Commission of India approved the transaction in March 2018. The Reserve bank approved the transaction in June 2018. Shareholders of IDFC Bank approved the merger with an overwhelming 99.98% votes in favour. Capital First shareholders too approved the merger with an equally overwhelming approval rate of 99.9%. Such overwhelming approval rates for a merger were unprecedented for merger of listed companies in India. This was also the first merger between an NBFC and a commercial Bank. Mr. Vaidyanathan, who was the Chairman of Capital First prior to the merger, was appointed the first Managing Director and CEO of the new combined Bank, IDFC FIRST Bank. Thus, IDFC FIRST Bank was founded as a new entity by the merger of IDFC Bank and Capital First on December 18 2018. 8 SECTION 1: FOUNDING OF IDFC FIRST IDFC Bank – Financial Trends BANK Networth (Rs Cr) Loan Assets (Rs Cr) Net Interest Margin (%) 15,257 75,337 73,055 70,248 11% 13% 14,678 14,776 2.0% 2.1% 1.9% 4% 1.7% 53,903 1% 69% 72% 70% 13,633 90% 26% 20% 15% 9% FY16 FY17 FY18 H1FY19 Mar-16 Mar-17 Mar-18 Sep-18 Mar-16 Mar-17 Mar-18 Sep-18 • Others Wholesale Retail CASA Deposits (Rs Cr) Profit After Tax (Rs Cr) RoE % 6,426 7.2% 5,710 1,020 6.0% 5.7% 859 2,094 407 - (-167)* (2.2%)* 445 FY16 FY17 FY18 H1FY19 FY16 FY17 FY18 H1FY19 Mar-16 Mar-17 Mar-18 Sep-18 9 *The bank took one-time provisions relating to stressed infrastructure loans. Without such one-time charge off, the PAT for H1 FY19 would be Rs. 81 Cr SECTION 1: FOUNDING OF IDFC FIRST Capital First – Financial Trends BANK Assets Under Management (Rs Cr) Net Worth (Rs Cr) NIM (%) 32,622 • Retail 2,928 9.60% 26,997 2,618 9.02% Wholesale 2,304 7.63% 8.01% 19,824 6.57% 16,041 1,574 1,704 5.35% 91% 4.86% 11,975 94% 1,172 9,679 961 I I 7,510 93% 86% I 84% 81% 74% 26% 19% 16% 14% 7% 6% 9% Mar 13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 Mar 13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 FY13 FY14 FY15 FY16 FY17 FY18 H1 FY19 RoE (%) Profit After Tax (Rs Cr) Total Income (Rs Cr) 327 14.87% 13.31% 2,430 11.93% 239 10.14% 206 1,640 8.33% 166 7.04% 1,297 992 114 4.93% 659 63 358 422 53 FY13 FY14 FY15 FY16 FY17 FY18 H1 FY19 FY13 FY14 FY15 FY16 FY17 FY18 H1 FY19 FY13 FY14 FY15 FY16 FY17 FY18 H1 FY19 10 Note: Figures for Sep 18 and H1FY19 are under Ind-AS and for prior periods, it is under previous Indian GAAP SECTION 2: PATH AHEAD � IDFC FIRST E.J Bank SECTION 2: PATH AHEAD Disclaimer 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. (for Full text of disclaimer please refer to page 2) 12 SECTION 2: PATH AHEAD IDFC FIRST BANK - Path Ahead I D F C � IDFC FIRST E.J Bank IDFC BANK • Strong Systems and Processes • Strong Retail Franchise in niche • Strong Loan assets of more than Rs. segments with strong credit skills 104660 Cr • Launched retail liability operations. Opened 200 bank branches (Dec 18), • Track record of continuous growth • 34.62% of loans in retail segment raised retail CASA of Rs. 2,800 crores • Expanded to more than 220 locations • Margins increased from 1.7% on (Dec 18). across India supported by 102 standalone to 3.3% post merger • Built efficient Treasury Management branches • Diversified asset profile Systems • Consistently increasing Profitability (5 • Strong platform to grow retail • Strong presence in Corporate and year CAGR 39%) and high ROE (15%) deposits and CASA Infrastructure financing • High Asset quality across cycles • A large retail customer base of more • Launched contemporary payment including increasing interest rate, than 70 lacs live customers including systems, internet and mobile banking Demonetisation and GST 30 lacs rural customers • Launched retail lending businesses • Customer base of over seven million successfully and 4 million live customers 13 SECTION 2: PATH AHEAD 1 Asset Strategy • Growth of Assets: • The Bank plans to grow the retail asset book from Rs. 36,236 Cr (December 31, 2018) to over Rs. 100,000 Cr in the next 5-6 years • The Bank plans to reduce the loans to infrastructure segments ( Rs. 22,710 as of 31 December 2018) as they mature. • For the Non-Infra Corporate Loans, the bank will continue to grow the loan book, based on opportunities available in the marketplace. The bank does not intend to have a specific target on this count. • Diversification of Assets: The loan book of the bank needs to be well diversified across sectors and a large number of consumers. Currently (December 31, 2018) the retail book contributes to 34.62% of the total funded assets. The Bank plans to increase the retail book composition to more than 70% in the next 5-6 years • Gross Yield Expansion: As a result of the growth of the retail loan assets (at a relatively higher yield compared to the wholesale loans), the gross yield of the Bank’s Loan Book is planned to increase from 9.2% (as per Q2-FY19 published financials, before the merger) to ~ 12% in the next 5-6 years. The bank will expand Housing loan portfolio as one of its important product lines. 14 SECTION 2: PATH AHEAD 2 Liability Strategy • CASA Growth: The key focus of the Bank would be to increase the CASA Ratio from 10.3% (December 31, 2018) on a continuous basis year on year and strive to reach 30% CASA ratio with in the next 5-6 years, as well as set a trajectory to reach a CASA ratio of 40-50% there on. Array of digital savings & current accounts are to be offered to the customer base (more than 7 million customers) of Erstwhile Capital First. • Diversification of Liability: Diversification of Liabilities in favour of the retail deposit (including CASA and Retail Term Deposits) is essential for the bank. As a percentage of the total borrowings, the Retail Term Deposits and CASA is proposed to increase from 10.5% currently (December 31, 2018), to over 50% in the next 5-6 years and set up a trajectory to reach 75% thereafter. • Branch Expansion: In order to grow Retail Deposits and CASA, the bank plans to set up 600-700 more bank branches in the next 5-6 years from the current branch count of 206. This would be suitably supported by the attractive product propositions and other associated services as well as cross selling opportunities. 15 SECTION 2: PATH AHEAD 3 Profitability • Net Interest Margin: As the retail asset contribution moves towards 70% of the total fund assets, it is planned that the gross yield will continuously increase. Coupled with lower cost of funds (From improved CASA ratio), it is planned to expand NIM to about 5.5% in the next 5-6 years. • Cost to Income: The Bank plans to improve C:I ratio to ~50-55% over the next 5-6 years, down from ~80% (post merger results, Quarter ended December 31, 2018) • ROA and ROE: With the improvement in the NIM and cost to income ratio, the bank aims to reach the following benchmarks in the next 5-6 years. • ROA of 1.4%-1.6% • ROE of 13%-15% 16 SECTION 3: PERFORMANCE HIGHLIGHTS � IDFC FIRST E.J Bank Snapshot of Key Parameters SECTION 3: PERFORMANCE HIGHLIGHTS (As of 31 December 2018) Rs. 1,04,660 Cr 34.62% Rs. 130,529 Cr 10.37%, 4.92% Funded Assets Retail Assets/Total Borrowing & Deposits CASA Ratio Funded Assets (as % of Total Deposit, as % of Total Borrowing & Deposits) iiz=a. Rs. 18,376 Cr 1.97%, 0.95% 206 16.51% Net Worth-Standalone GNPA, NNPA No. of Bank Branches Capital Adequacy ratio e:::::::::,,, I I I 11. 18 Snapshot of Financial Performance for the Quarter SECTION 3: PERFORMANCE HIGHLIGHTS (For Q3-FY19) IDFC FIRST Bank is practically a new entity formed by the merger of Capital First and IDFC Bank. Hence the financial results of the quarter are not comparable either with IDFC Bank or with Capital First Quarterly Results, whether for sequential or Corresponding Quarters. The results for the Quarter ended December 31 2018 for IDFC FIRST Bank are as follows: • The Net Interest Income for the quarter ended on 31 December 2018 was Rs. 1,145 Cr • The Total Operating Income (net of Interest Cost) for the quarter ended on 31 December 2018 was Rs. 1,449 Cr. • The Net Interest Margin for the quarter ended on 31 December 2018 was at 3.27% • The Cost to Income ratio for the quarter ended on 31 December 2018 was at 78.75% • The Profit Before Tax (without considering the exceptional item) for the quarter ended on 31 December 2018 was Rs. 95 Cr • The Bank has accounted for merger in accordance with AS-14 accounting for amalgamation. Goodwill and other intangibles of Rs. 2599 Crores have been recognized. Since there are restrictions on declaring dividend under section 15 of the banking regulation Act in case a bank carries intangible items such as Goodwill on its books, the bank has accelerated the amortization of Goodwill and other Intangibles. This has been disclosed as an Exceptional Item in the Profit and Loss account. • The Book Value of the Share (Net worth considering as of 31 December 2018 and total number of shares adjusted for shares issued pursuant to merger on 5th January 2019) was at Rs. 38.43 per share 19 SECTION 5: ASSETS Breakup of Loan Assets Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 (Erstwhile (Erstwhile (Erstwhile (Erstwhile (Merged new Funded Assets (In INR Cr) IDFC Bank) IDFC Bank)) IDFC Bank) IDFC Bank) entity IDFC FIRST Bank) Retail Funded Assets 5,376 7,043 8,211 9,918 36,236 Rural 2,652 3,218 3,616 4,243 4,704 SME 1,173 1,794 2,151 2,772 13,574 Consumer 1,551 2,031 2,444 2,903 17,957 Wholesale Funded Assets 51,292 53,867 55,411 54,082 56,809 Corporates 22,024 27,039 28,861 30,447 34,098 5,102 6,829 7,174 7,960 7,886 Emerging Large Corporates 3,917 5,617 5,473 6,073 5,852 Large Corporates 4,533 4,668 6,484 6,330 10,645 Domestic Financial Institutions 8,470 9,925 9,730 10,085 9,715 Others Infrastructure 29,268 26,828 26,550 23,635 22,710 PSL Inorganic 9,203 8,980 8,466 8,256 8,575 Stressed Equity and SRs 3,194 3,162 3,102 3,081 3,040 Total Funded Assets 69,065 73,052 75,190 75,337 1,04,660 21 Retail Assets as a % of the total Funded Assets has improved SECTION 5: ASSETS substantially from 13% to 35% post the merger 1,04,660* 35% 75,190 75,337 73,052 69,065 10% 11% 13% 8% 74% 74% 74% 72% 54% 5% 4% 4% 4% 3% 13% 12% 11% 11% 8% Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 • Retail Funded Assets Wholesale Funded Assets Stressed Equity/ SRs Others * Post merger with Capital First. Figures of prior quarters pertain to erstwhile IDFC Bank. 22 Spreads have increased from 1.7% to 3.6% post the merger SECTION 5: ASSETS Q3 FY18 Q2 FY19 Q3 FY19# (Erstwhile IDFC Bank) (Erstwhile IDFC Bank) (Merged new entity Spreads - Consolidated IDFC FIRST Bank) Yields 9.3% 9.4% 11.5% Retail 16.9% 15.7% 16.6% Wholesale Bank 9.7% 9.2% 9.5% Corporate Banking 8.9% 9.0% 9.5% Infrastructure 10.2% 9.4% 9.6% PSL Buyout 6.9% 6.5% 6.4% Stressed Assets 2.8% 3.8% 5.7%* Average Cost of Funds 7.5% 7.6% 8.0% CASA + Retail TD 5.8% 5.9% 6.3% Corporate Deposits 6.4% 7.2% 7.4% Legacy Borrowings 8.8% 8.8% 8.9% CFL Borrowings - - 8.8% Spreads 1.9% 1.7% 3.6% #The numbers for Q3-FY19 are not comparable with numbers of earlier quarters *Excluding one off recovery from stressed case of Rs. 81 Crore. 23 SECTION 5: ASSETS Stressed Assets Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 (Erstwhile (Erstwhile (Erstwhile (Erstwhile (Erstwhile Capital In INR Cr IDFC Bank) IDFC Bank)) IDFC Bank) IDFC Bank) First + Erstwhile IDFC Bank) Stressed Assets 5,316 3,884 3,836 3,120 3,826 NPL 2,777 1,779 1,774 895 1,671 Others Loans 1,342 927 918 856 787 Stressed Equity 1,197 1,178 1,144 1,149 1,149 Stressed SRs (NPI) - - - 220 219 Provisions 3,399 2,717 2,726 2,542 2,788 NPL 1,570 888 893 574 874 Others Loans 814 814 825 599 545 Stressed Equity 1,015 1,015 1,008 1,149 1,149 Stressed SRs (NPI) - - - 220 219 PCR 63.9% 70.0% 71.1% 81.5% 72.9% Security Receipts 1,997 1,984 1,958 1,712 1,672 Provision on SRs 332 349 349 196 196 24 SECTION 5: ASSETS Investments Dec-18 In INR Cr Dec-17 Mar-18 Jun-18 Sep-18 (Merged entity) CRR 2,798 3,124 3,089 3,081 3,510 SLR 15,243 16,334 16,483 16,806 17,946 LCR / Others 1,828 1,941 2,998 3,165 6,213 Bonds (Non - Repoable) 5,866 5,438 4,020 3,569 3,203 Certificate of Deposit - 249 - - - Commercial Paper 638 524 24 24 25 Bonds & Debentures (ex Tax free Bonds) 2,609 2,046 1,367 930 579 Tax Free Bonds 2,619 2,619 2,629 2,615 2,599 HFT Trading Book (Repoable) 17,818 20,548 13,787 12,423 12,604 Central Government Securities 13,264 17,349 10,279 7,670 6,967 State Government Securities 1,904 3,171 1,970 1,139 1,154 Treasury Bills 2,650 28 1,538 3,614 4,483 (Less) MTM Provisions 122 25 104 146 1 Net Investment Assets 43,431 47,358 40,273 38,899 43,475 25 SECTION 6: LIABILITIES � IDFC FIRST E.J Bank SECTION 6: LIABILITY Borrowings and Deposits In INR Cr Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Borrowings 36,373 36,483 34,671 37,844 57,403 Others Short CASA Legacy Long Term Bonds 23,636 21,405 18,909 18,632 16,385 Term 5% 12% Term Deposits Infra Bonds 10,434 10,434 10,434 10,434 10,434 25% Other Borrowings 2,303 4,644 5,328 8,778 30,584* CASA 4,254 5,710 6,083 6,426 6,421 Current Account 2,395 2,177 2,971 3,334 2,022 Saving Account 1,859 3,533 3,112 3,092 4,398 Legacy, Infra Term Deposits 23,257 22,826 26,888 29,943 33,182 Bonds & CP Retail 3,737 4,107 4,970 6,453 7,605 32% Wholesale 19,520 18,719 21,918 23,490 25,577 Certificate of Money Market Deposits Certificate of Deposits 14,748 19,662 21,086 11,988 22,312 9% 17% Borrowings + Deposits 78,632 84,681 88,728 86,201 1,19,317 Money Market Borrowings 18,132 20,804 12,921 15,031 11,212 As of 31 December 2018 Total Borrowings & Deposits 96,764 1,05,485 1,01,649 1,01,232 1,30,529 Rs. 1,30,529 Cr * Includes the borrowing book of Rs. 21,938 Cr of Erstwhile Capital First Limited 27 CASA and Retail Deposits SECTION 6: LIABILITY 14,025 12,879 11,053 9,817 7,605 6,453 7,991 4,970 4,107 3,737 3,092 3,112 4,398 3,533 1,859 3,334 2,971 2,395 2,177 2,022 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 II Current Accounts Saving Accounts Retail Term Deposits All figures are in INR Crores unless specified 28 The combined entity has presence across the length and SECTION 4: DISTRIBUTION breadth of the country Urban Bank Branches 114 Rural Bank Branches 92 ATMs 140 Asset Service Branches 102 (Erstwhile Capital First Branches) Rural BC Branches (IBL) 354 Other BC Branches 100 29 SECTION 7: FINANCIAL STATEMENTS � IDFC FIRST E.J Bank SECTION 7: FINANCIAL STATEMENTS Income Statement In INR Cr Q3 FY19* Interest Income 3,664 Interest Expenses 2,519 Net Interest Income 1,145 Fee & Other Income 301 Core Operating Income 1,446 Operating Expenses 1,142 Core Operating Profit 305 Trading Gain 3 Credit Provisions 338 Treasury MTM Provisions on AFS Book (125) Profit Before Tax & Exceptional Items 95 Exceptional Items 2,599 Profit Before Tax (2,504) Tax (966) Profit After Tax (1,538) * The P&L for Q3-FY19 represents the combined financials of both merging entities- IDFC Bank and Capital First and are therefore not comparable with the previous quarters of either entities. Hence no reference has been provided for prior quarter or year. From the succeeding quarter, we will represent sequential and corresponding quarter’s financials as applicable. The pro-forma results of both entities pre-merger have been provided earlier in the presentation. 31 SECTION 7: FINANCIAL STATEMENTS Balance Sheet In INR Cr Dec-18* Shareholders' Funds 18,376 Deposits 61,914 Borrowings 68,614 Other liabilities and provisions 8,012 Total Liabilities 1,56,916 Cash and Bank Balances 1,636 Net Retail and Wholesale Assets 1,01,694 Statutory Investments 21,456 Trading Investments 22,018 Fixed and Other Assets 10,112 Total Assets 1,56,916 * The Balance Sheet as of 31 December 2018 represents the combined financials of both merging entities- IDFC Bank and Capital First and are therefore not comparable with the previous quarters of either entities. Hence no reference has been provided for prior quarter or year. From the succeeding quarter, we will represent sequential and corresponding quarter’s financials as applicable. The pro-forma results of both entities pre-merger have been provided earlier in the presentation. 32 SECTION 8: DIRECTORS & SHAREHOLDERS � IDFC FIRST E.J Bank SECTION 8: BOARD & SHAREHOLDERS V Vaidyanathan, Managing Director & CEO Mr. V. Vaidyanathan is the first Managing Director and CEO of IDFC FIRST Bank, a bank founded by the merger of Capital First and IDFC Bank in December 2018. Prior to this role, he founded Capital First Limited by first acquiring an equity stake in an existing NBFC, and then executing a Management Buyout (MBO) by securing an equity backing of Rs. 810 crores in 2012 from PE Warburg Pincus. The MBO included (a) buyout of majority and minority shareholders through Open Offer to public; (b) Fresh capital raise of Rs. 100 crores into the company; (c) Reconstitution of the Board of Directors (d) Change of business from wholesale to retail lending; (e) Creation of a new brand "Capital First". As part of his entrepreneurial journey, he left ICICI Group in 2010 and acquired a stake in a small start-up NBFC. He then exited legacy businesses of Real estate financing, Foreign Exchange, Broking, Investment management businesses and instead transformed the company into a large retail financing institution with operations in more than 225 locations across India. Between March 2010 to September 2018, he has grown the retail financing book from Rs. 94 crores ($14 million) to Rs. 29,625 crores ($4.06 billion), has grown the Equity Capital from Rs. 690 crores ($106 million) to Rs. 2,928 crores ($401.1 million) and reduced the Gross NPA and Net NPA from 5.36% & 3.78% to 1.94% & 1.00%. Under his leadership, Company's long term credit rating was upgraded four notches to AAA. He joined ICICI Limited in early 2000 when it was a Domestic Financial Institution (DFI) and the retail businesses he built helped the transition of ICICI from a DFI to a Universal Bank. He built the Retail Banking Business for ICICI Limited since its inception, and grew ICICI Bank (post merger in 2002) to 1411 Bank branches in 800 cities, 25 million customers, a vast CASA and retail deposit base, branch, internet and digital banking, built a retail loan book of over Rs. 1,35,000 crores ($20 billion) in Mortgages, Auto loans, Commercial Vehicles, Credit Cards, Personal Loans. In addition, he also built the SME business and managed the Rural Banking Business for the bank. These businesses helped the conversion of the institution to a universal bank renowned for retail banking. He was appointed the Executive Director on the Board of ICICI Bank in 2006 and later became the Managing Director on the Board of ICICI Prudential Life Insurance Company in 2009. He was also the Chairman of ICICI Home Finance Co. Ltd (2006), and served on the Board of CIBIL- India's first Credit Bureau (2005), and SMERA- SIDBI's Credit Rating Agency (2005). He started his career with Citibank India in 1990 and worked there till 2000, where he learnt the ropes in Consumer Banking. During his career, he and his organization have received a large number of domestic and international awards including the prestigious, "Transformational Leader 2018" by CFI Awards UK, "Most Inspirational Leveraged Management Buyout, India 2018" by CFI Awards, "Financial Services Company of the Year, 2018 - VC Circle", "Entrepreneur of the Year" Award at APEA 2017, CNBC Asia "Innovative company of the year" IBLA-2017, "Outstanding contribution to Financial Inclusion, India, 2017" from Capital Finance International, London, "Economic Times Most Promising Business Leaders of Asia" 2016, 'Outstanding Entrepreneur Award' in Asia Pacific Entrepreneurship Awards 2016, Greatest Corporate Leaders of India- 2014, Business Today - India's Most Valuable Companies 2016 & 2015, Economic Times 500 India's Future Ready Companies 2016, Fortune India's Next 500 Companies 2016, Dun & Bradstreet India's Top 500 Companies & Corporates 2016 & 2015. During his prior stint, awards included "Best Retail bank in Asia 2001", "Excellence in Retail Banking Award" 2002, "Best Retail Bank in India 2003, 2004, and 2005" from the Asian Banker, "Most Innovative Bank" 2007, "Leaders under 40" from Business Today in 2009, and was nominated "Retail Banker of the Year" by EFMA Europe for 2008. He is an alumnus of Birla Institute of Technology and Harvard Business School and is a regular contributor on Financial and Banking matters in India and international forums. He is a regular marathoner and has run 22 half-marathons and 8 full marathons. 34 SECTION 8: BOARD & SHAREHOLDERS Board of Directors DR. RAJIV B. LALL - PART-TIME NON-EXECUTIVE CHAIRMAN Dr. Rajiv Lall is the Non-Executive Chairman of IDFC Bank. He was the Founder MD & CEO of IDFC Bank from October 1, 2015 till December 18, 2018. Previously, he was the Executive Chairman of IDFC Limited. A veteran economist for 30 years, Dr. Lall has been an active part of the finance and policy landscape, both in India and internationally. In his diverse career, he has also held leadership roles in global investment banks and multilateral agencies. MS. ANINDITA SINHARAY – NON-EXECUTIVE NON INDEPENDENT DIRECTOR (REPRESENTING THE GOVT. OF INDIA) Ms. Anindita Sinharay is an Indian Statistical Service (2000) officer working as a Director in the Department of Financial Services, Ministry of Finance. She holds a post graduate degree in Statistics from the University of Calcutta. She has vast working experience of more than one decade in National Accounts Statistics in Central Statistics Office (CSO) and analysis of data of large scale sample surveys conducted by National Sample Survey Office (NSSO). MR. SUNIL KAKAR - NON-EXECUTIVE NON INDEPENDENT DIRECTOR (REPRESENTING IDFC LIMITED) Mr. Sunil Kakar is the Managing Director & CEO of IDFC Limited. He started his career at Bank of America where he worked in various roles, covering Business Planning & Financial Control, Branch Administration and Operations, Project Management and Internal Controls. After Bank of America, Mr. Kakar was the CFO at Max New York Life Insurance. He led numerous initiatives including Planning, Investments / Treasury, Finance and Accounting, Budgeting and MIS, Regulatory Reporting and Taxation. MR. ANAND SINHA - INDEPENDENT DIRECTOR Mr. Anand Sinha joined the Reserve Bank of India in July 1976 and rose to become Deputy Governor in January 2011. He was Adviser in RBI up to April 2014 after demitting the office of Deputy Governor in RBI on 18th January 2014. As Deputy Governor, he was in-charge of regulation of commercial banks, Non-Banking Financial Companies, Urban Cooperative Banks and Information Technology, among others. MR. HEMANG RAJA - INDEPENDENT DIRECTOR Mr. Hemang Raja, is an MBA from Abeline Christian University, Texas, with a major emphasis on finance. Mr. Raja has also been the head of Capital Market activities in the Institutional and Retail Segments when he started and became the Managing Director and CEO of the then newly formed initiative by IL&FS, namely IL&FS Investsmart Ltd. His last assignment from the year 2006 onwards was in the area of Private Equity and Fund Management business with Credit Suisse and Asia Growth Capital Advisers in India as MD and Head - India. 35 SECTION 8: BOARD & SHAREHOLDERS Board of Directors DR.(MRS.) BRINDA JAGIRDAR - INDEPENDENT DIRECTOR Dr. (Mrs.) Brinda Jagirdar, is an independent consulting economist with specialization in areas relating to the Indian economy and financial intermediation. She is on the Governing Council of Treasury Elite, a knowledge sharing platform for finance and treasury professionals. She retired as General Manager and Chief Economist, State Bank of India, based at its Corporate Office in Mumbai. She has a brilliant academic record, with a Ph.D. in Economics from the Department of Economics, University of Mumbai, M.S. in Economics from the University of California at Davis, USA, M.A. in Economics from Gokhale Institute of Politics and Economics, Pune and B.A. in Economics from Fergusson College, Pune. She has attended an Executive Programme at the Kennedy School of Government, Harvard University, USA and a leadership programme at IIM Lucknow. MR. DESH RAJ DOGRA - INDEPENDENT DIRECTOR Mr. D.R. Dogra retired in 2016, as MD and CEO of CARE Ratings, which is the 2nd largest credit rating agency in India in terms of rating income. After a stint of 15 years in Dena Bank, he joined CARE in 1993. He has over 38 years of experience in the financial sector in the areas of banking & credit rating. He holds a Bachelor’s & a Master’s degree in Agriculture from Himachal Pradesh University and MBA from Faculty of Management Studies, University of Delhi. He is a certified associate of the Indian Institute of Bankers. MR. PRAVIR VOHRA - INDEPENDENT DIRECTOR Mr. Pravir Vohra is a postgraduate in Economics from St. Stephen's College, University of Delhi & a Certified Associate of the Indian Institute of Bankers. He began his career in banking with State Bank of India where he worked for over 23 years. He held various senior level positions in business as well as technology within the bank, both in India & abroad. The late 1990s saw Mr. Vohra as Vice President in charge of the Corporate Services group at Times Bank Ltd. In January 2000, he moved to the ICICI Bank group where he headed a number of functions like the Retail Technology Group & Technology Management Group. From 2005 till 2012 he was the President and Group CTO at ICICI Bank. MR. AASHISH KAMAT - INDEPENDENT DIRECTOR Mr. Aashish Kamat has over 30 years of experience in the corporate world, with 24 years being in banking & financial services & 6 years in public accounting. Mr. Kamat was the Country Head for UBS India, from 2012 until his retirement in January 2018. Prior to that he was the Regional COO/CFO for Asia Pacific at JP Morgan based out of Hong Kong. Before moving to Hong Kong, Mr. Kamat was in New York, where is was the Global Controller for the Investment Bank (IB) at JP Morgan in New York; & at Bank of America as the Global CFO for the IB, and, Consumer and Mortgage Products. Mr. Kamat started his career with Coopers & Lybrand, a public accounting firm, in 1988 before he joined JP Morgan in 1994. 36 MR. VISHAL MAHADEVIA – NON-EXECUTIVE NON INDEPENDENT DIRECTOR Mr. Vishal Mahadevia joined Warburg Pincus in 2006 & is a member of the firm’s executive management group. Previously, he was a Principal at Greenbriar Equity Group, a fund focused on private equity investments in the transportation sector. Prior to that, Mr. Mahadevia worked at Three Cities Research, a New York-based PE fund, & as a consultant with McKinsey & Company. He received a B.S. in economics with a concentration in finance & B.S. in electrical engineering from the University of Pennsylvania SECTION 8: BOARD & SHAREHOLDERS Current Shareholding Pattern Scrip Name : IDFC FIRST Bank (BSE: 5394437, NSE:IDFCFIRSTB) Key shareholders % Holding Public (incl Other Bodies IDFC Financial Holding Company Limited 40.00 NRIs) Corporate 22.3% 3.3% Warburg Pincus through its affiliated entities 9.99 MF/Insurance/ Trusts and AIF/ Bank/FI Clearing President of India 5.47 4.0% Members GIC Singapore 3.94 0.2% Platinum Asset Management 1.85 Aditya Birla Asset Management 1.75 Vanguard 1.41 FII/FPI/Foreign V Vaidyanathan* 1.19 Corporates 24.7% Promoters Dimensional Fund Advisors 0.81 40.0% iShares 0.68 President of India LIC 0.61 5.5% *Including shares amounting to 0.14% of the Bank transferred by him to a Social Total # of shares as of 5th January 2018 : 478,15,21,604 Welfare Trust where he is a Trustee. Book Value per Share as of 31st December 2018: Rs. 38.43 37 Since Capital First business model and profitability trends will form an important part of the new business trajectory, we present to you the business model and financial trends of Capital First Limited. These slides are essentially an extract of the last official investor presentation of Capital First prior to the merger (Period ending Q2 FY18.) � IDFC FIRST E.J Bank History of Capital First Limited The Company was first listed on Stock Exchanges in January 2008. Between 2010 to 2012, Mr Vaidyanathan acquired a stake in the company and executed a Management Buyout (MBO) of the Company with equity backing of Rs. 810 Crore from Warburg Pincus, and created a new brand and entity called Capital First. As part of the MBO, the company raised fresh equity, reconstituted a new Board and got new shareholders, including open offer to public. A brief history of the company is as follows: 2008-10 The Company was largely in the business of Wholesale Financing, PE, Asset Management, Foreign Exchange and Retail Equity Broking. The total AUM of the Company was Rs. 935 crores of which Retail AUM was 10%, Rs. 94 crores. 2010-11 Mr. V Vaidyanathan joined the Company and prepared the ground for executing a Management Buyout by taking significant corporate actions including divesting Forex JV to JV partner, merging a subsidiary NBFC with itself, by winding down other non core businesses and launching retail businesses in the Company. The Company launched technology driven financial businesses for the consumer and SME segments. The Retail loan book crossed Rs. 700 crores by March 2011. The Company presented this as proof of concept to many global private equity players for Buyout. 2011-12 The company continued to present the concept to prospective PE players throughout the year. The Company undertook additional corporate actions and further wound down non-core business subsidiaries and launched more retail financing businesses. The concept, model and volume of retail financing businesses gained traction and reached to Rs. 3,660 crores, 44% of the overall AUM. 2012-13 Mr. Vaidyanathan secured equity backing of Rs. 810 billion from Warburg Pincus for an MBO and thus Capital First was founded. As part of the transaction an open offer was launched, the Company raised Rs. 100 Cr of fresh equity capital, a new Board was reconstituted and a new brand and entity “Capital First” was created. 2013-14 The Company further raised Rs. 178 Cr as fresh equity at Rs. 153/ share. It acquired HFC license from NHB and launched housing finance business under its wholly owned subsidiary. 2014-15 Company’s Assets under Management reached Rs. ~12,000 Cr and the number of customers financed since inception crossed 10 lacs. The Company raised Rs. 300 Crores through QIP at Rs. 390 per share from marquee foreign and domestic investors. 2015-16 The Company received recognition as “Business Today – India’s most Valuable Companies 2015” and “Dun & Bradstreet – India’s top 500 Companies, 2015”. The Company scrip was included in S&P BSE 500 Index. 2016-17 Company’s Assets under Management reached ~ Rs. 20,000 Cr and the number of customers financed since inception crossed 4.0 million. The Company raised fresh equity capital of Rs. 340 Cr from GIC, Singapore through preferential allotment @ Rs. 712 per share. The Company received recognition as “CNBC Asia – Innovative Company of the Year, IBLA, 2017”, “Economic Times – 500 India’s Future Ready Companies 2016” and “Fortune India’s Next 500 Companies, 2016”. 2017-18 The Company’s Asset Under Management touch ~Rs. 27,000 Cr and number of customers financed crossed 6.0 million. The Company received “Best BFSI Brand Award 2018” at The Economic Times Best BFSI Brand Awards 2018 and “Financial Services Company of the Year 2018” at VC Circle Awards 2018. In January 2018, the Company announced the merger with IDFC Bank subject to regulatory approvals. 39 � IDFCFIRST E...J Bank History of Capital First Limited From 31-March-2010 to 31-Mar-2018, the company has transformed across all key parameters including: • The total Capital has grown from Rs. 691 Cr to Rs. 3,993 Cr • The Assets under Management increased from Rs. 935 Cr to Rs. 26,997 Cr • The retail Assets Under Management increased from Rs. 94 Cr to Rs. 25,243 Cr • The long term credit rating has upgraded from A+ to AAA • The number of lenders increased from 5 to 297 • The Gross NPA reduced from 5.28% (180 DPD) to 1.62% (90 DPD) • The Net NPA reduced from 3.78% (180 DPD) to 1.00% (90 DPD) • Cumulative customers financed reached over 60 lacs The growth of the key parameters are as follows: o Total Asset Under Management has grown at a CAGR (FY13-FY18) of 29% from Rs. 7,510 Cr (FY13) to Rs. 26,997 Cr (FY18) o Total Income has grown at a CAGR (FY13-FY18) of 47% from Rs. 357.5 Cr (FY13) to Rs. 2429.6 Cr (FY18) o Profit After Tax has grown at a CAGR (FY13-FY18) of 39% from Rs. 63.1 Cr (FY13) to Rs. 327.4 Cr (FY18) o Earning Per Share has grown at a CAGR (FY13-FY18) of 30% from Rs. 9 (FY13) to Rs. 33 (FY18) 40 � IDFCFIRST E...J Bank Over the last Eight years the company has consistently stayed with the founding theme of financing self-employed entrepreneurs, MSMEs and consumers through the platform of technology & has grown the retail franchise * As per Ind - AS Rs. 32,622 Cr*  A highly diversified portfolio across 600 industries and over 70 lakh customers $ 4.47 bn  Retail Loan Assets becoming 91% of the Overall Loan Assets  This transformation & diversification has resulted in high asset quality, consistency of growth, and sustained increase in profits. Rs. 26,997 Cr $ 4,15 bn 9% Rs. 19,824 Cr 6% $ 3.05 bn Retails loans 91% Rs. 16,041 Cr Real Estate & Corporate Loans $ 2.47 bn 7% 94% Total AUM Rs. 11,975 Cr $ 1.84 bn 14% 93% Rs. 9,679 Cr $ 1.49 bn 16% Rs. 7,510 Cr 86% $ 1.16 bn 19% 84% Rs. 6,186 Cr $ 0.95 bn 26% 81% Rs. 2,751 Cr As a result, the growth in the net profit of the Company has outpaced the growth of the loan book 74% Rs. 935 Cr $ 0.42 bn $ 0.14 bn 44% 56% demonstrating increased efficiency in use of capital. The company plans to continue to build in this strategic • 28% direction and aims to grow the loan book at a CAGR of 25% over the next three years. 10% 72% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Q2 FY19 41 Growth in Retail Assets The company’s product launches have been highly successful in the marketplace and the company has emerged as a significant player in Indian retail financial services within eight years of inception with the Retail Loan Book crossing Rs. 29,625 Crores (USD 4.06 bn) Rs. 29,625 Cr* ($4,058Mn) Rs. 25,243 Cr ($3,891Mn) Rs. 18,353 Cr ($2,824Mn) Rs. 13,756 Cr ($2,116 Mn) Rs. 10,113 Cr ($1,556 Mn) Rs. 7,883 Cr ($1,213 Mn) Rs. 5,560 Cr ($855 Mn) Rs. 3,460 Cr ($532 Mn) - Rs. 771 Cr Rs. 94 Cr ($119 Mn) ($15 Mn) 31-Mar-10 31-Mar-11 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 30-Sept-18 *Under Ind - AS 42 Capital First provided financing to select segments that are traditionally underserved by the existing financing system Traditionally these end uses are underserved by the financial system as ticket sizes are small, credit evaluation is difficult, collections is difficult, and business is often unviable owing to huge operating and credit costs. Loans for Business Expansion Loans for Plant & Short Term Business Machinery funding MSMEs Loans for Two Wheeler Loans for office display --------------- purchase panels Consumers Loans for Air- Loans for Office Conditioners Furniture Loans for Office Automation – PCs, Laptops, Printers 43 MSME Financing – A key area of Focus Capital First has emerged as a Specialized Player in financing MSMEs by offering different products for their various financing needs Typical Loan Ticket Size From CFL Typical Customer Profile To Small and Medium Entrepreneurs financing based on customised cash flow analysis and Rs. 10 lacs - Rs. 2 crores references from the SME’s customers, vendors, suppliers. To Small Entrepreneurs/ partnership firms in need of immediate funds, for say, purchase of Rs. 1 lakh - Rs. 10 lacs additional inventory for an unexpected large order. To Micro business owners and consumers for purchase of office PC, office furniture, Tablets, Two- Rs. 15k - Rs. 1 lakh Wheeler, etc. 44 Key Product Offerings Average Loan Average Average Loan Challenges Products Key Features Ticket Size Loan Tenor to Value Ratio (Rs.) (Months) (%) CFL provides long term loans to MSMEs after proper Evaluation of cash flows is a key 7,400,000 60* 45% evaluation of cash flows. challenge for credit appraisal of s Backed by collateral of residential or commercial ($ 114,000) MSMEs. n a property. o L Monthly amortizing products with no moratorium. Businesses may undergo reverses E M CFL also provides unsecured short tenure working over lifetime of the loan that may S capital loans to MSMEs. affect repayments M CFL provides financing to salaried segment as well as High collection effort and costs as s n self employed individuals like small traders, shop 53,000 24 72% the collection efforts required are a o keepers for purchase of new two-wheelers. ($815) significant due to small ticket size L r and large number of customers e le running into millions. Operating e h expenditure is also very high. W o w T e lb C cu F s L t p o r m o e vi r d s e f s o r f in p a u n rc c h in a g s i t n o g s o a f l a L r C ie D d / L a E n D d p s a e n lf e -e ls m , ployed 2 ($ 2 3 ,0 3 0 8 0 ) 12 77% H th ig e h c o co lle lle ct c i t o io n n e f e f f o fo rt r s t s r e a q n u d i r c e o d s t a a re s a Laptops, Air-conditioners and other such white good significant due to small ticket size r u Ds products. They are also availed by small and large number of customers r e n a entrepreneurs for official purposes. running into millions. Operating mo L expenditure is also very high. u s n o C 45 Note: All the loan product related figures are for the period FY18 * On actuarial basis Rigorous Credit Underwriting Process helps in maintaining high asset quality In the Mortgages business at Capital First, about 38% of the total applications are disbursed after passing through several levels of scrutiny and checks, mainly centred around cash flow evaluation, 2-3 ✘ credit bureau and reference checks. Most rejections are because of 38-40 ✘ the lack of visibility or inadequate cash flows to service the loan. 2-4 ✘ ✘ 5-7 10-12✘ 100 38 Application Logged in CIBIL / Credit Bureau Rejection Due to Rejection after Rejection due to Rejection for Other Net Disbursals Rejection Insufficient Cashflow Personal Interview Legal & Technical Reasons / Documentation Reasons 46 Reputed marquee FIIs and DIIs have invested in CFL Key Shareholders of Capital First Limited (as of 30 September 2018) Warburg Pincus, through its affiliate entities V. Vaidyanathan GIC, Sovereign Wealth Fund, Singapore 25.72% Government Pension Fund Global, Norway 35.52% Birla Asset Management, India HDFC Mutual Fund, India Vanguard, USA 3.50% Jupiter Asset Management, UK TIAA, USA 10.51% DSP Blackrock, India MV SCIF, Mauritius 24.75% Dimensions Group, USA Kotak Mutual fund, India Warburg Pincus Affiliated Companies FII & FPI ICICI Prudential Mutual Fund, India Financial Institution/Bank/MF/ Insurance Bodies Corporate Individuals & Others JOM Silkkitie, Finland Total # of shares as of 30 September, 2018: 9,90,52,644 Book Value per Share as per Ind AS : Rs. 296 (US$4.05) 47 The Asset Under Management has consistently grown at a 5 year CAGR of 29%. AUM (In Rs. Cr)-LHS • AUM (In Rs. Cr)-LHS 2 2 6 35,000 3 0 7 ,2 3 7 ,9 9 2 30,000 5 9 ,6 0 4 7 9 5 7 ,4 2 2 25,000 2 7 3 4 8 7 4 2 8 ,9 1 4 ,1 2 ,2 2 1 1 2 0 5 0 , , , 0 0 0 0 0 0 0 0 0 4 2 0 ,8 4 4 2 ,8 1 7 0 ,9 9 7 6 ,9 3 0 6 ,0 1 5 4 0 ,1 1 5 9 6 ,1 1 5 7 9 ,1 1 4 4 6 ,2 1 4 0 6 ,3 1 3 7 9 ,4 1 1 4 0 ,6 1 1 2 ,7 1 9 ,7 1 ,8 1 1 5,000 - 4 4 4 4 5 5 5 5 6 6 6 6 7 7 7 7 8 8 8 8 * * 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 9 9 Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y 1 1 F F F F F F F F F F F F F F F F F F F F Y Y - 1 - 2 - 3 - 4 - 1 - 2 - 3 - 4 - 1 - 2 - 3 - 4 - 1 - 2 - 3 - 4 - 1 - 2 - 3 - 4 F - F - Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q 1 2 Q Q *Highlighted figures are based on Indian AS in comparison to quarterly figures for earlier periods based on Indian GAAP. 48 The Profit After Tax has grown steadily with improvement in Cost to Income ratio - 120.0 90% PAT (In Cr) (LHS) OPEX to Income 104.6* 101.5* 80% 100.0 95.3 70% 87.0 78.3 80.0 60% 70.8 67.0 61.4 50% 57.6 60.0 49.2 40% 47.5 44.5 41.0 40.0 36.5 30% 33.1 29.8 29.9 27.0 20% 20.8 20.0 10.1 10% 7.2 5.5 - 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY14 FY14 FY14 FY14 FY15 FY15 FY15 FY15 FY16 FY16 FY16 FY16 FY17 FY17 FY17 FY17 FY18 FY18 FY18 FY18 FY19 FY19 *Figures for Q1 FY19 and Q2 FY19 are based on Ind AS and earlier periods are under Indian GAAP 49 Yearly Profit Growth Trend.. Yearly Net Profit (Rs Cr) 327 239 206* 166 114 53 FY14 FY15 FY16 FY17 FY18 H1 FY19 *Figures for H1-FY19 are based on Ind AS and earlier periods are under Indian GAAP 50 With enhanced business operations, the Return on Equity has continuously improved over the quarters… 14.51% H1-FY18 13.31% All figures are annualised 11.93% FY18 10.14% 14.82% FY17 14.47% 14.46% 14.08% 8.33% FY16 4.93% 13.06% 12.87% FY15 12.49% 12.10% FY14 11.39% 11.46% 11.09% 11.20% 10.68% 10.29% 10.08% 9.58% 8.89% 8.32% 7.02% 4.15% 2.96% 2.28% 4 4 4 4 5 5 5 5 6 6 6 6 7 7 7 7 8 8 8 8 * * 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 9 9 Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y 1 1 F F F F F F F F F F F F F F F F F F F F Y Y 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q F 1 F 2 Q Q *Highlighted figures are based on Indian AS in comparison to quarterly figures for earlier periods based on Indian GAAP. 51 The Market Cap of the Company grew more than 10X in the last 6 years.. Market Capitalization Rs. 8,282 Cr# ($ 1,274 Mn) Rs. 7,628 Cr ($ 1,174 Mn) Rs. 6,096 Cr ($ 938 Mn) Rs. 3,937 Cr Rs. 3,634 Cr ($ 606 Mn) ($ 559 Mn) Rs. 1,478 Cr Rs. 1,152Cr ($ 227 Mn) Rs. 781Cr* ($ 177 Mn) ($ 120 Mn) 31-Mar-12 31-Mar-13 31-Mar-14 31-Mar-15 31-Mar-16 31-Mar-17 12-Jan-18 31-Mar-18 * Last date of Financial Year immediately preceding the Management Buyout # Market Cap on the day before the announcement of merger with IDFC Bank (Jan 13, 2018). 52 The Company has been steadily increasing dividend pay-out every year.. Dividend (as % of face value per share) 28% 26% 24% 22% 20% 18% 31-Mar-13 31-Mar-14 31-Mar-15 31-Mar-16 31-Mar-17 31-Mar-18 53 With the increasing assets size, returns have shown a consistent growth over the last six years… FY13 FY14 FY15 FY16 FY17 FY18 CAGR ............... � .__,, __I ,_-II.__ 29% AUM (Rs. Cr) 7,510 9,679 11,975 16,041 19,824 26,997 Total Income (Rs. 47% 357.3 422.2 658.8 991.8 1,640.3 2,429.6 Cr) .__.'--'.__, 39% PAT (Rs. Cr) 63.1 52.6 114.3 166.2 238.9 327.4 Earning per Share 30% 9.00 6.37 12.56 18.24 24.53 33.34 (Rs.) Market Cap 40% 1,152 1,478 3,634 3,937 7,628 6,096 (Rs. Cr) 54 I ,_ , _.Ii II.__, I I .............................. ,__,.__,.__.Ii II.__. I I _.II.__. .__.,__,.__.,I._ _,, __ I._ -- '--'.__,.__. I I I I,_ I