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Strategy Presentation

This document provides an overview of a bank aiming for balanced growth across its business lines. It summarizes the bank's: - Consistent growth and above-industry profitability driven by gaining market share. - Diversified revenue streams including fees from retail deposits, insurance, investments, and loans. - Nationwide presence through branches, ATMs, call centers and digital channels. - Focus on maintaining strong asset quality and expanding offerings to retail, SME, corporate and infrastructure customers. The bank aims to further its balanced growth by leveraging domestic opportunities, strengthening its retail franchise, and pursuing a relationship-based approach across all customer segments.

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Princy Agrawal
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© Attribution Non-Commercial (BY-NC)
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Download as PDF, TXT or read online on Scribd
88 views

Strategy Presentation

This document provides an overview of a bank aiming for balanced growth across its business lines. It summarizes the bank's: - Consistent growth and above-industry profitability driven by gaining market share. - Diversified revenue streams including fees from retail deposits, insurance, investments, and loans. - Nationwide presence through branches, ATMs, call centers and digital channels. - Focus on maintaining strong asset quality and expanding offerings to retail, SME, corporate and infrastructure customers. The bank aims to further its balanced growth by leveraging domestic opportunities, strengthening its retail franchise, and pursuing a relationship-based approach across all customer segments.

Uploaded by

Princy Agrawal
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 32

Aiming at Balanced Growth

August 2011

Track record of growth & profitability


Consistent growth trajectory

Above industry profitability

Diversified fee income franchise

Expanding retail deposit franchise

Pan-India multi-channel presence

Robust asset quality

Consistently Gaining Market Share


In Business as well as Profits

Source : Company annual reports Top 10 sample is based on ranking of banks by FY11 asset base

Delivering Above Industry Profitability

Source : Company annual reports Top 10 sample is based on ranking of banks by FY11 asset base

Diversified Fee Income Franchise


Fee income (` bn) Fee profile (FY11)

Fee Income as % of Operating Revenue 35.9% 34.1% 37.2% 32.7% 33.9%


4

1 CAGR is based on data of Fiscal 2006 to 2011 Note: Previous years figures have been restated where required

Stable Deposit Base


CASA and Retail term deposits (` crore)
1,11,224 1,11,475

Composition of deposits As on Mar07 Mar08 Mar09 CASA Deposits 40% 46% 43% CASA + Retail Term Deposits* 57% 64% 63%

92,878

74,523

56,074

33,746

Mar10 Mar11
Jun11

47% 41%
41%

66% 59%
61%

*Retail Term Deposits are defined as term deposits up to ` 5 crore


1 . CAGR (between Mar07-Mar11) 5

Multi-channel Presence Pan-India


Integrated channel strategy No. of branches & Extension counters Customer convenience and cost effective customer delivery Advanced use of technology

Branches

Call centre

ATMs

Customer touch points


Point of Sale
Mobile Banking
Particulars Branches + Extn counters Mar08 644 2,764 405 Mar09 792 3,595 515 Mar10 983 4,293 643 Mar11 1,390 6,270 921 Jun11 1,411 6,871 932

Internet Banking
Traditional channels Alternate channels

ATMs Centers Covered

1. CAGR for period from March 2008 to March 2011

Asset Quality
Amounts in `crore

Provision coverage of 80.00% as on June 2011 after write-offs and 90.38% before accumulated write offs

Summary
Combining growth & profitability Gained market share and maintained above industry profitability

Diversified revenue streams


Strong retail deposit franchise Robust asset quality

Aiming for balanced growth Continue to build on key strengths of the franchise

Leverage customer relationships with a complete product portfolio


Pursue growth opportunities in key businesses

Business Strategy Along Four Key Themes


Leveraging Domestic Growth Opportunities

Continue to build and strengthen Retail Banking franchise

Leverage leadership position in Infrastructure linked Financial services

Build a full-service offering to SME customers

Capture end-to-end opportunities in Payments across customer segments

Corporate Banking

10

Corporate Banking: A key driver of overall bank performance

CB share (%) in aggregate loans FY11

CB share (%) in fees


11

Originate and Distribute Model


Debt Private Placement League Table Loan syndication market share

Institution

Rank (CY11 YTD)

Rank (CY10)

Rank (CY09)

Axis Bank ICICI Bank I-Sec Primary

1 2 3

1 2 5

1 10 4

Citi
KMCC

4
5

12
11

9
8

Source: Bloomberg 12

Infra focus has helped Axis establish credibility & recognition in the industry
Dedicated Infrastructure Group Leveraging strong position in infrastructure financing to capture endto-end opportunity

Origination and relationship management strengthen and deepen


Risk Distribution

End to End Infrastructure Player


Investment Banking
Relationship with overseas /domestic equity investors Private Equity M&A Advisory IPO placements

Credit
Project Advisory Underwriting Rupee & FCL/ECB Credit Appraisal Risk Assessment Trade Finance Performance bonds, bid bonds

Syndication
Relationship with FIs, banks, Insurance companys, MFs, PFs Syndication Thrust Rupee & FCL

Treasury
FX & interest rate hedging DCM - Bond Syndication

Business Banking
Escrow and TRA Cash Management Solutions CDAB (CA)

Non-Bank Units
Trusteeship Services

13

Skill Sets in Place to Cover Key Infra Sectors


Roads Airports Ports Railways Construction

Transportation

Energy

Generation

Transmission

Distribution

Telecom

Active Infrastructure

Passive Infrastructure

Urban Infrastructure

SEZ

Industrial Parks

IT Parks and Others

Emerging Sectors

Water

Education Healthcare

14

Risk Management Approach In Infra Lending


Origination Project specific risk mitigation Promoters with significant experience and proven track record Ability to access capital Avoid projects where land acquisition and environmental clearances are sensitive issues Ensure that fuel supply and long term PPAs for off-take of power generated are adequately tied up Portfolio risk mitigation Upfront equity contribution Distribute the exposure to other banks through syndication Maintain and closely monitor cash/escrow accounts

15

SME

16

MSME: Growing Segment


Year Total MSME units (lacs units) Fixed Investment (`000 Crores)

Production at Current Prices (`000 Crores)


709.4 790.8 880.8 1,030.5 1,165.0
Census Data

2006-07 2007-08 2008-09 2009-10 2010-11

261.01 272.79 285.16 298.08 NA

500.8 558.2 621.8 696.4 786.9

Source: Ministry of Micro, Small and Medium Enterprises Govt of India, Annual Report 2007-08 and 2008-09 For 2009-10 and 2010-11 fixed investment and Production is estimated based on recent years performance.

17

Steady Growth in Bank Credit to MSMEs

Source- RBI. As per the Data published by RBI/SIDBI, production data till FY06 is only for SSIs and from FY07 onwards it pertains to overall MSME segment (as per regulatory definition). *Total value of the goods produced by MSME sector in FY09-10 & 10-11 is estimated. Amount of bank credit available to SSI in FY10-11 is estimated.

18

Profitable Business Growth


Growth in loan portfolio and customer base

Full-service product offering Loans Current Accounts Trade finance and Forex Payroll accounts

` cr
CAGR = 25% CAGR = 23%
19

Segmented Approach
SME

Medium Enterprises Group Relationship based approach Key products - Working capital finance

Small Enterprises Group Sales & Relationship based Approach Key products - Templated products - Working capital finance

Supply Chain Finance Corporate Anchored Business Key products - Factoring - Vendor - Dealer Finance

- Term loans
- Non-fund based facilities

20

Relationship-led Model
Encourage cross-sell Almost all SME customers have Current Accounts with the Bank Nearly 1/3rd of SME customers avail forex products Integration with Wealth Management a key priority going forward

Invest in quality and personal touch of RMs

78% of SME Customers have rated overall quality of RM highly (source:


IMRB survey, 2011)

Key strengths of RM model as per the IMRB survey:

Availability
Knowledge level Timely product and service delivery Promptness in responding to queries
21

Separation of Sales, Credit and Operations


Relationship Managers

Sales

Branch leads

Segregation of Sales Credit Credit Appraisal


Business Proposals processed through dedicated credit cells at 32 SME Centers Proposals rated and vetted by

independent Risk team

Operation Team

Post Sanction & Monitoring

Disbursement & Monitoring by separate Corporate Banking Operations Team

22

Distribution of Ratings
80% of SME advances have rating of at least SME3 as at June 2011

23

Retail Banking

24

Consistent Growth in Retail Franchise


Branch Network ATM Network

CAGR = 26%

CAGR = 28%

Retail Deposit franchise (` bn.)


1,112 CAGR = 35% 745 561 929

Retail Fees (` Cr.)

CAGR = 40%

338

25

Recognised for High Quality Customer Service


Hindustan Times MARS Banking Satisfaction study 2010

This independent survey covered 18 Cities and 9,486 bank account holders across India

26

Customer Needs Along Six Product Dimensions


Product Category Savings Loans Insurance Investments Cards Broking

Customer Category

Mass Mass Affluent Affluent

Wealthy

Axis Bank position

Legend:

Heavy requirement

Moderate requirement

Light requirement
27

Investment, Insurance and Broking offerings


Distribution of investment products
Mutual Fund (particularly Axis Mutual Fund) Wealth advisory services

Life insurance distribution tie-up with Max New York Life

Launch of Axis Direct online broking offering targeted at savings bank


customers Integrated with Savings Bank and demat products of the Bank

28

Retail Lending: A Key Driver for Cross-sell


Retail Advances Portfolio (`cr) Retail Loan mix FY11

CAGR = 33%

29

Five-pronged Strategy for Retail Assets


To Build a Profitable And Balanced Retail Lending Book

Diversify product mix

Branch based sourcing of existing customers

Expand footprint

Deploy a more quantitative and statistical approach to risk management Create awareness we offer loan and cards products too

30

Thank You

31

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