Description
An investor is a person who allocates capital with the expectation of a financial return. The types of investments include, — gambling and speculation, equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc.
Investor Presentation March 2013
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives Financial Highlights Value Proposition
1
Well positioned across GDP spectrum
`. Tn
100 90 80 70 60 50 40 30 20 10 0
India GDP*
Private Consumption • Equally well positioned in urban and rural markets • Leading player across retail loan categories • Focus on working capital finance and trade services
Government • Large tax collector for the Government of India • Significant provider of cash management services for public sector and semi government undertakings
FY 2011 FY 2012 FY 2013
Private consumption Government Investment
Investment • Term Loans for capex and brown field expansion • Debt syndication team in place • Project financing to strong and established players • Leading working capital banker to capital goods manufacturers
*Source CSO – GDP at Market Prices at current prices FY – Fiscal year ended March 31 ` - Rupees
2
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
3
Wide Range of Products and Customer Segments
Loan Products: Auto Loans Personal Loans Home Loans / Mortgages Commercial Vehicles Finance Retail Business Banking Credit Cards Loans against Gold 2-Wheeler Loans Construction Equipment Finance Loans against Securities Agri and Tractor loans Education Loans Commercial Banking: Deposit Products: Savings Accounts Current Accounts Fixed / Recurring Deposits Corporate Salary Accounts Loan products contd… Self Help Group Loans Joint Liability Group Loans Kisan Gold Card Other Products / Services: Depository Accounts Mutual Fund Sales Private Banking Insurance Sales (Life, General) NRI Services Bill Payment Services POS Terminals Debit Cards Gold Sales Foreign Exchange Services Broking (HDFC Securities Ltd)
Retail Banking
Transactional Banking: Cash Management Custodial Services Clearing Bank Services Correspondent Banking Tax Collections Banker to Public Issues
Investment Banking: Debt Capital Markets Equity Capital Markets Project Finance M&A and Advisory
Key Segments: Large Corporate Emerging Corporates Financial Institutions Government / PSUs Supply Chain (Suppliers and Dealers) Agriculture Commodities
Wholesale Banking
Working Capital Term Loans Bill Collection Forex & Derivatives Wholesale Deposits Letters of Credit Guarantees
Products / Segments:
Other Functions: Asset Liability Management Statutory Reserve Management
Treasury
Foreign Exchange Debt Securities Derivatives Equities
Complete Suite of Products to Meet Diverse Customers’ Needs
4
Business Mix
Total Deposits
`. Bn 3,200 `. Bn 2,600
Gross Advances
`. Bn 120
Profit Before Tax
1,600
1,300
60
0 2011 2012 2013
0 2011 2012 2013
0 2011 2012 2013
Retail
Wholesale
Retail
Wholesale
Retail
Wholesale
• •
Customer segments - main drivers of net revenues Well balanced loan mix between wholesale and retail segments
•
•
Higher retail revenues partly offset by higher operating and credit costs
Equally well positioned to grow both segments
Indian GAAP figures. Fiscal Year ended 31 st March; ` - Rupees Gross advances and Profit Before Taxes classified as per RBI guidelines for segmental reporting (Basel II). “Other Banking Operations Segment” (which includes Credit Cards, Third Party Product sales etc.) has been added to the Retail Segment 5
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
6
Strong National Network
Mar ‘10 Mar ‘11 Mar ‘12 Mar ‘13
Branches ATMs Cities / Towns
1,725 1,986 2,544 3,062 4,232 5,471 8,913 10,743 779 996 1,399 1,845 Branch classification
Mar ‘10
Semi Urban 26% Rural 8% Metro 35% Urban 24%
Mar '13
Semi Urban 36%
Urban 31%
Rural 17% Metro 24%
? All branches linked online, real time
? Bank added 193 ‘micro’ branches in FY 2013
? Customer base of over 28 million, net addition of over 2 million customers in FY 2013
FY – Fiscal year ended March 31
7
High Quality Deposit Franchise
Total Deposits
`. Bn 3,200
Core CASA Ratio
Average Saving Balance per Account
`.
52%
50,000
1,600
26%
25,000
2011 2012 2013
0% 2011 2012 2013
0 2011 2012 2013
Time
Savings
Current
Savings
Current
• • • • •
Healthy proportion of CASA (current & savings) deposits Floats from multiple transactional banking franchises Continued growth in new customer acquisitions Provides customer base for ongoing cross-sell through branches Quality growth rather than mere numbers
Indian GAAP figures. Fiscal year ended 31st March Core CASA ratio based on daily average balances for the year
` - Rupees
8
Low Funding Costs – Healthy Margins
Cost of Deposits
7.00%
Net Interest Margin
6.13%
6.00%
5.72%
4.30%
3.50%
4.44%
4.43%
4.47%
3.00%
0.00% 2011 2012 2013
0.00% 2011 2012 2013
• • •
Amongst the lowest deposit costs in the industry Healthy margins – relatively stable over rising & declining interest rates Average yields supported by higher proportion & product mix of retail loans
Indian GAAP figures. Fiscal year ended 31st March
9
Strong Non-Funded Revenues
`. Mn 78,000
Multiple sources of fees & commissions:
Fees & Commission 38,000 Fx & Derivatives Recoveries* P/L on Investments
-2,000
2011
2012
2013
Banking charges (Retail & Wholesale) Retail Asset Fees Credit card Fees Third party product sales Cash management Trade Finance Depositary charges Bullion sales Custody
• •
Other Income (non-funded revenues) at 30% of Net Revenues in FY 2013 Composition of Other Income in FY 2013: • • • • Fees and commission 75%, FX and Derivatives Revenues 15%, Recoveries from written-off accounts 8%, Profit / Loss on sale of Investments 2%
Indian GAAP figures. Fiscal year ended 31 st March; FY - Fiscal Year ended 31st March. * Recoveries includes miscellaneous income
` - Rupees
10
Leveraging Technology
Multiple Delivery Channels
2001
ATM 40% Branches 18% Phone Banking 8%
Greater Choice and Convenience for Our Retail Customers
2013
ATM 30%
Branches 43%
Phone Banking 14%
Internet & Mobile 3%
Internet & Mobile 44%
% Customer Initiated Transactions by Channel
Regionalized Processing Units
Derive Economies of Scale
Electronic Straight Through Processing
Reduce Transaction Costs and Error Rates
Data Warehousing, CRM, Analytics
Improve Sales & Credit Efficiencies, Cross-sell
Innovative Technology Application
Provide New or Superior Products
The charts above cover only transactions initiated by our own customers at our channels and which could have been transacted at the Bank?s branches. Transactions such as (a) SMS alerts sent to customers, (b) point of sale (POS) transactions, and (c) transactions by holders of other banks? cardholders have therefore been excluded. 11
Healthy Asset Quality
NPA% to Advances
`. Bn
2% 28
Loan Loss Provisions
1.05%
1%
1.02%
0.97%
14
0.19%
0%
0.18%
0.20%
0
-
2011
2012
2013
2011
2012
2013
Gross NPA %
Net NPA %
Gross NPAs
Specific Provision
General Provision
• • • •
Amongst the best portfolio quality (wholesale & retail) in the industry Strong credit culture, policies, processes Specific provision cover (excluding write-offs, technical or otherwise) at 80% of NPAs Restructured loans formed 0.2% of the Bank's gross advances as on March 31, 2013
•
Floating provisions at `1,835 crore as on March 31, 2013
Indian GAAP figures. Fiscal year ended 31 st March. Net Non Performing Assets (NPA) = Gross NPA less specific loan loss provisions
` - Rupees
12
Consistent Financial Performance
`. Mn
70,000
Net Profit
35,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
ROA
2% 1.58% 1.77% 1.90%
`. 30
EPS
28.5 22.1 17.0
1%
15
0% 2011 2012 2013
0 2011 2012 2013
Indian GAAP figures. Fiscal year ended 31st March * 10 year Compounded Annual Growth Rate EPS for the year 2011 has been recomputed to give effect of the share split from face value of ` 10 to face value of ` 2 13 1
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
14
Retail Loans – Profitable Growth
`. Bn
1,400
Two wheelers Gold Loans
Kisan Gold Card
Others
• • •
Well diversified product mix Balancing volumes and market share with margins and risk Home Loans* (Mortgage) offering – origination (loan sanctions) now around ` 10 Bn per month
Credit Card Home Loans Personal Loans
700
Commercial Vehicles
•
Business Banking
Loan losses within product pricing
parameters
Auto Loans
0 2011 2012 2013
Retail loans are net of loans sold and include loan assignments. Retail loans are classified as per RBI guidelines for segmental reporting (Basel II). * In arrangement with HDFC Ltd., „Others? includes Tractor Loans, Loans to Self Help Group, Retail overdrafts, Loans against Securities, etc Indian GAAP figures. Fiscal year ended 31st March; ` - Rupees 15 1
Wholesale Banking - Accessing Multiple Segments
`. Bn 1,200
FIG CV / CE Others Business Banking
Wholesale Advances
• •
Leveraging relationships with large & emerging corporates for multiple revenue streams Focus on house banking
•
• •
Balanced mix between working capital financing, term loans and transactional banking
Well diversified loan portfolio across major industry segments Investment banking capability built across various industry segments
600
Emerging Corporate
Corporate
0 2011 2012 2013
Dealers Vendors Corporate Distributors OEM Customers • • Leading provider of electronic banking services for supply chain management (SCM) Structured cash management-cum-vendor/distributor finance
Indian GAAP figures. Fiscal year ended 31st March; Total wholesale advances are as per the RBI guidelines for segmental reporting (Basel II). „Others? includes Capital markets and commodity finance, and other consumer loans over ` 50 million. FIG – Financial Institutions and Government group, CV/CE – Large ticket commercial vehicle and construction equipment loan
` - Rupees
16 1
Focus on Transactional Banking Opportunities
`. Bn 28,000
Gross Cash Management Volumes *
Nos.
Primary Settlements Accounts (Stock Exchanges)
1,700
14,000
850
0 2011 2012 2013
0 2011 2012 2013
• •
Clear market leader : cash settlements on stock & commodities exchanges Leading provider of cash management solutions • • • Large corporates and SME Financial Institutions Government (including tax collections)
For the Fiscal year ended 31st March, * Gross Cash Management Volumes adjusted for collections on account of IPOs
` - Rupees
17 1
Customer Focused Treasury Products
`. Mn 12,000
FIG 3% BB 6% Others 9% Corp 17%
FX & Derivatives Revenues
Customer Revenues Mix
6,000
ECG 10%
0 2011 2012 2013
Retail 55%
• • • •
Revenues – Largely customer driven, low reliance on trading revenue Treasury advisory services Plain vanilla FX offerings to retail and business banking segments FX and derivatives product sales to corporate and institutional customers
Indian GAAP figures. Fiscal year ended 31st March; ` - Rupees Corp – Corporate, ECG – Emerging Corporate Group, BB – Business Banking, FIG – Financial Institutions & Government Group; „Others? includes Capital Markets and Commodity Finance 18 1
Cards – Achieving Scale
Number of Cards
Mn 24 `.Bn 120
Credit Cards Receivables
`.Bn 800
Acquiring Thruputs
12
60
400
0
0
0 2011 2012 2013 2011 2012 2013
2011
2012
2013
Debit cards
Credit cards
• • • •
Market leader in credit cards Around 75% of new credit cards issued to internal customers Loss rates well within the range priced in Merchant acquiring – over 240,000 POS terminals, 53% growth in thru-puts in FY 2013
Indian GAAP figures. Fiscal year ended 31 st March. ` - Rupees FY 2013 – Fiscal year ended 31st March 2013 POS – Point of Sale 19 1
Banking on Rural India
Banking Services for the rural eco-system through customised loan and deposit products whilst maintaining credit standards
Local Government
Loan Products
Pre and Post Harvest Credit Tractor Loans Kisan Cards
Individuals
Small Working Capital Loan Sustainable Livelihood Banking Liability Products Regular / Basic Savings Bank Deposit Account
Food Processors
Self Help Groups
Term / Micro deposits
Other banking products
Life and General Insurance Payment ecosystem
Intermediaries (Arhatiyas, traders)
Farmers
Rural banking products offered through traditional and micro branches in the deeper geography of the country
Micro branches are primarily two member branches to expand and deepen the penetration in the rural market including in unbanked area.
20
Subsidiary Companies
HDB Financial Services Limited • • NBFC catering to certain customer segments not served by the Bank Main Products: Retail secured and unsecured loans, Insurance services and Collection
services
• • Network of 230 branches FY 2013 - Loan book : ` 82,037 million, Net Profit : ` 1,024 million
HDFC Securities Limited • • • • Amongst the leading equity brokerages in the country Over 190 branches and 1.6 million customers Revenues from brokerage as well as distribution of financial products FY 2013 - Net Profit : ` 668 million
` - Rupees
FY 2013 – Fiscal year ended March 31, 2013
21
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
22
Key Financials
`. In million
Quarter Ended Mar 2013 Net Interest Income Fees & Commissions FX & Derivatives Profit / (loss) on Investments Recoveries* Net Revenues 42,953 13,826 2,014 649 1,547 60,989 31,362 3,006 7,723 18,898
Quarter Ended Mar 2012 35,613 12,473 3,252 (715) 1,279 51,902 26,637 4,116 6,618 14,531
Change 20.6% 10.8% -38.1% -190.7% 21.0% 17.5% 17.7% -27.0% 16.7% 30.1%
Year Ended Mar 13 158,111 51,669 10,101 1,613 5,143 226,637 112,361 16,770 30,243 67,263
Year Ended Mar 12 128,846 43,121 11,388 (1,959) 5,286 186,682 92,776 18,774 23,461 51,671
Change 22.7% 19.8% -11.3% -182.3% -2.7% 21.4% 21.1% -10.7% 28.9% 30.2%
Operating Costs
Provisions & Contingencies Tax Profit After Tax
Indian GAAP figures (` Mn) , ` - Rupees;
*Recoveries includes miscellaneous income
23
Financial Highlights - Quarter ended March 2013
• • Net profit up by 30.1% to ` 18.9 Bn Gross advances increased by 22.6% to ` 2,413 Bn
•
• • • • • •
Deposits up by 20.1% to ` 2,962 Bn
CASA ratio at 47.4% Core Net Interest Margin at 4.5% Cost-to-income ratio at 51.4% Gross NPA / gross advances at 1.0% Net NPA / net advances at 0.2% Capital adequacy ratio (CAR) - total 16.8% of which tier I at 11.1%
Indian GAAP figures (Bn =Billion); ` - Rupees Net NPA = Gross NPA less specific loan loss provisions, Capital adequacy ratio computed as per Basel II guidelines. Comparisons are with respect to corresponding figures for the quarter ended March 31, 2012 24
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
25
Value Proposition – Healthy Growth, Low Risk
Growing economy / banking industry, Gaining market share Healthy balance sheet and revenue growth Disciplined margin and capital management with a focus on ROA/ROE Nationwide network, with expanding semi urban and rural footprint Wide Product range and multiple customer segment Branch Sales Process, Data Mining & CRM, geared for Cross sell Leveraging organic and inorganic growth opportunities
Leading (Top 3) player across multiple products
Strong Risk management, focus on asset quality
Proven ability to generate Shareholder Value
26
Certain statements are included in this release which contain words or phrases, such as “will”, “aim”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “future”, “objective”, “project”, “should”, and similar expressions or variations of these expressions, that are “forward-looking statements”. Actual results may differ materially from those suggested by the forward-looking statements due to certain risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to implement our strategy successfully, the market acceptance of and demand for various banking services, future levels of our non-performing loans, our growth and expansion, the adequacy of our allowance for credit and investment losses, technological changes, volatility in investment income, our ability to market new products, cash flow projections, the outcome of any legal, tax or regulatory proceedings in India and in other jurisdictions we are or become a party to, the future impact of new accounting standards, our ability to pay dividends, the impact of changes in banking regulations and other regulatory changes in India and other jurisdictions on us, our ability to roll over our shortterm funding sources and our exposure to market and operational risks. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what may actually occur in the future. As a result, actual future gains, losses or impact on net income could materially differ from those that have been estimated. Our forward looking statements speak only as of the date on which they are made and we do not undertake any obligation, and we do not intend, to update or revise any forward looking statements to reflect events or circumstances after the date in the statement, even if our expectations or any related events or circumstances change. In addition, other factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this document include, but are not limited to: general economic and political conditions, instability or uncertainty in India and other countries which have an impact on our business activities or investments caused by any factor including the global financial crisis and problems in the Eurozone countries, terrorist attacks in India, the United States or elsewhere, anti-terrorist or other attacks by the United States, a United States-led coalition or any other country, tensions between India and Pakistan related to the Kashmir region, military armament or social unrest in any part of India, the monetary and interest rate policies of the government of India, natural calamities, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in Indian and foreign laws and regulations, including tax, accounting and banking regulations, changes in competition and the pricing environment in India, and regional or general changes in asset valuations.
doc_672226129.pdf
An investor is a person who allocates capital with the expectation of a financial return. The types of investments include, — gambling and speculation, equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc.
Investor Presentation March 2013
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives Financial Highlights Value Proposition
1
Well positioned across GDP spectrum
`. Tn
100 90 80 70 60 50 40 30 20 10 0
India GDP*
Private Consumption • Equally well positioned in urban and rural markets • Leading player across retail loan categories • Focus on working capital finance and trade services
Government • Large tax collector for the Government of India • Significant provider of cash management services for public sector and semi government undertakings
FY 2011 FY 2012 FY 2013
Private consumption Government Investment
Investment • Term Loans for capex and brown field expansion • Debt syndication team in place • Project financing to strong and established players • Leading working capital banker to capital goods manufacturers
*Source CSO – GDP at Market Prices at current prices FY – Fiscal year ended March 31 ` - Rupees
2
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
3
Wide Range of Products and Customer Segments
Loan Products: Auto Loans Personal Loans Home Loans / Mortgages Commercial Vehicles Finance Retail Business Banking Credit Cards Loans against Gold 2-Wheeler Loans Construction Equipment Finance Loans against Securities Agri and Tractor loans Education Loans Commercial Banking: Deposit Products: Savings Accounts Current Accounts Fixed / Recurring Deposits Corporate Salary Accounts Loan products contd… Self Help Group Loans Joint Liability Group Loans Kisan Gold Card Other Products / Services: Depository Accounts Mutual Fund Sales Private Banking Insurance Sales (Life, General) NRI Services Bill Payment Services POS Terminals Debit Cards Gold Sales Foreign Exchange Services Broking (HDFC Securities Ltd)
Retail Banking
Transactional Banking: Cash Management Custodial Services Clearing Bank Services Correspondent Banking Tax Collections Banker to Public Issues
Investment Banking: Debt Capital Markets Equity Capital Markets Project Finance M&A and Advisory
Key Segments: Large Corporate Emerging Corporates Financial Institutions Government / PSUs Supply Chain (Suppliers and Dealers) Agriculture Commodities
Wholesale Banking
Working Capital Term Loans Bill Collection Forex & Derivatives Wholesale Deposits Letters of Credit Guarantees
Products / Segments:
Other Functions: Asset Liability Management Statutory Reserve Management
Treasury
Foreign Exchange Debt Securities Derivatives Equities
Complete Suite of Products to Meet Diverse Customers’ Needs
4
Business Mix
Total Deposits
`. Bn 3,200 `. Bn 2,600
Gross Advances
`. Bn 120
Profit Before Tax
1,600
1,300
60
0 2011 2012 2013
0 2011 2012 2013
0 2011 2012 2013
Retail
Wholesale
Retail
Wholesale
Retail
Wholesale
• •
Customer segments - main drivers of net revenues Well balanced loan mix between wholesale and retail segments
•
•
Higher retail revenues partly offset by higher operating and credit costs
Equally well positioned to grow both segments
Indian GAAP figures. Fiscal Year ended 31 st March; ` - Rupees Gross advances and Profit Before Taxes classified as per RBI guidelines for segmental reporting (Basel II). “Other Banking Operations Segment” (which includes Credit Cards, Third Party Product sales etc.) has been added to the Retail Segment 5
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
6
Strong National Network
Mar ‘10 Mar ‘11 Mar ‘12 Mar ‘13
Branches ATMs Cities / Towns
1,725 1,986 2,544 3,062 4,232 5,471 8,913 10,743 779 996 1,399 1,845 Branch classification
Mar ‘10
Semi Urban 26% Rural 8% Metro 35% Urban 24%
Mar '13
Semi Urban 36%
Urban 31%
Rural 17% Metro 24%
? All branches linked online, real time
? Bank added 193 ‘micro’ branches in FY 2013
? Customer base of over 28 million, net addition of over 2 million customers in FY 2013
FY – Fiscal year ended March 31
7
High Quality Deposit Franchise
Total Deposits
`. Bn 3,200
Core CASA Ratio
Average Saving Balance per Account
`.
52%
50,000
1,600
26%
25,000
2011 2012 2013
0% 2011 2012 2013
0 2011 2012 2013
Time
Savings
Current
Savings
Current
• • • • •
Healthy proportion of CASA (current & savings) deposits Floats from multiple transactional banking franchises Continued growth in new customer acquisitions Provides customer base for ongoing cross-sell through branches Quality growth rather than mere numbers
Indian GAAP figures. Fiscal year ended 31st March Core CASA ratio based on daily average balances for the year
` - Rupees
8
Low Funding Costs – Healthy Margins
Cost of Deposits
7.00%
Net Interest Margin
6.13%
6.00%
5.72%
4.30%
3.50%
4.44%
4.43%
4.47%
3.00%
0.00% 2011 2012 2013
0.00% 2011 2012 2013
• • •
Amongst the lowest deposit costs in the industry Healthy margins – relatively stable over rising & declining interest rates Average yields supported by higher proportion & product mix of retail loans
Indian GAAP figures. Fiscal year ended 31st March
9
Strong Non-Funded Revenues
`. Mn 78,000
Multiple sources of fees & commissions:
Fees & Commission 38,000 Fx & Derivatives Recoveries* P/L on Investments
-2,000
2011
2012
2013
Banking charges (Retail & Wholesale) Retail Asset Fees Credit card Fees Third party product sales Cash management Trade Finance Depositary charges Bullion sales Custody
• •
Other Income (non-funded revenues) at 30% of Net Revenues in FY 2013 Composition of Other Income in FY 2013: • • • • Fees and commission 75%, FX and Derivatives Revenues 15%, Recoveries from written-off accounts 8%, Profit / Loss on sale of Investments 2%
Indian GAAP figures. Fiscal year ended 31 st March; FY - Fiscal Year ended 31st March. * Recoveries includes miscellaneous income
` - Rupees
10
Leveraging Technology
Multiple Delivery Channels
2001
ATM 40% Branches 18% Phone Banking 8%
Greater Choice and Convenience for Our Retail Customers
2013
ATM 30%
Branches 43%
Phone Banking 14%
Internet & Mobile 3%
Internet & Mobile 44%
% Customer Initiated Transactions by Channel
Regionalized Processing Units
Derive Economies of Scale
Electronic Straight Through Processing
Reduce Transaction Costs and Error Rates
Data Warehousing, CRM, Analytics
Improve Sales & Credit Efficiencies, Cross-sell
Innovative Technology Application
Provide New or Superior Products
The charts above cover only transactions initiated by our own customers at our channels and which could have been transacted at the Bank?s branches. Transactions such as (a) SMS alerts sent to customers, (b) point of sale (POS) transactions, and (c) transactions by holders of other banks? cardholders have therefore been excluded. 11
Healthy Asset Quality
NPA% to Advances
`. Bn
2% 28
Loan Loss Provisions
1.05%
1%
1.02%
0.97%
14
0.19%
0%
0.18%
0.20%
0
-
2011
2012
2013
2011
2012
2013
Gross NPA %
Net NPA %
Gross NPAs
Specific Provision
General Provision
• • • •
Amongst the best portfolio quality (wholesale & retail) in the industry Strong credit culture, policies, processes Specific provision cover (excluding write-offs, technical or otherwise) at 80% of NPAs Restructured loans formed 0.2% of the Bank's gross advances as on March 31, 2013
•
Floating provisions at `1,835 crore as on March 31, 2013
Indian GAAP figures. Fiscal year ended 31 st March. Net Non Performing Assets (NPA) = Gross NPA less specific loan loss provisions
` - Rupees
12
Consistent Financial Performance
`. Mn
70,000
Net Profit
35,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
ROA
2% 1.58% 1.77% 1.90%
`. 30
EPS
28.5 22.1 17.0
1%
15
0% 2011 2012 2013
0 2011 2012 2013
Indian GAAP figures. Fiscal year ended 31st March * 10 year Compounded Annual Growth Rate EPS for the year 2011 has been recomputed to give effect of the share split from face value of ` 10 to face value of ` 2 13 1
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
14
Retail Loans – Profitable Growth
`. Bn
1,400
Two wheelers Gold Loans
Kisan Gold Card
Others
• • •
Well diversified product mix Balancing volumes and market share with margins and risk Home Loans* (Mortgage) offering – origination (loan sanctions) now around ` 10 Bn per month
Credit Card Home Loans Personal Loans
700
Commercial Vehicles
•
Business Banking
Loan losses within product pricing
parameters
Auto Loans
0 2011 2012 2013
Retail loans are net of loans sold and include loan assignments. Retail loans are classified as per RBI guidelines for segmental reporting (Basel II). * In arrangement with HDFC Ltd., „Others? includes Tractor Loans, Loans to Self Help Group, Retail overdrafts, Loans against Securities, etc Indian GAAP figures. Fiscal year ended 31st March; ` - Rupees 15 1
Wholesale Banking - Accessing Multiple Segments
`. Bn 1,200
FIG CV / CE Others Business Banking
Wholesale Advances
• •
Leveraging relationships with large & emerging corporates for multiple revenue streams Focus on house banking
•
• •
Balanced mix between working capital financing, term loans and transactional banking
Well diversified loan portfolio across major industry segments Investment banking capability built across various industry segments
600
Emerging Corporate
Corporate
0 2011 2012 2013
Dealers Vendors Corporate Distributors OEM Customers • • Leading provider of electronic banking services for supply chain management (SCM) Structured cash management-cum-vendor/distributor finance
Indian GAAP figures. Fiscal year ended 31st March; Total wholesale advances are as per the RBI guidelines for segmental reporting (Basel II). „Others? includes Capital markets and commodity finance, and other consumer loans over ` 50 million. FIG – Financial Institutions and Government group, CV/CE – Large ticket commercial vehicle and construction equipment loan
` - Rupees
16 1
Focus on Transactional Banking Opportunities
`. Bn 28,000
Gross Cash Management Volumes *
Nos.
Primary Settlements Accounts (Stock Exchanges)
1,700
14,000
850
0 2011 2012 2013
0 2011 2012 2013
• •
Clear market leader : cash settlements on stock & commodities exchanges Leading provider of cash management solutions • • • Large corporates and SME Financial Institutions Government (including tax collections)
For the Fiscal year ended 31st March, * Gross Cash Management Volumes adjusted for collections on account of IPOs
` - Rupees
17 1
Customer Focused Treasury Products
`. Mn 12,000
FIG 3% BB 6% Others 9% Corp 17%
FX & Derivatives Revenues
Customer Revenues Mix
6,000
ECG 10%
0 2011 2012 2013
Retail 55%
• • • •
Revenues – Largely customer driven, low reliance on trading revenue Treasury advisory services Plain vanilla FX offerings to retail and business banking segments FX and derivatives product sales to corporate and institutional customers
Indian GAAP figures. Fiscal year ended 31st March; ` - Rupees Corp – Corporate, ECG – Emerging Corporate Group, BB – Business Banking, FIG – Financial Institutions & Government Group; „Others? includes Capital Markets and Commodity Finance 18 1
Cards – Achieving Scale
Number of Cards
Mn 24 `.Bn 120
Credit Cards Receivables
`.Bn 800
Acquiring Thruputs
12
60
400
0
0
0 2011 2012 2013 2011 2012 2013
2011
2012
2013
Debit cards
Credit cards
• • • •
Market leader in credit cards Around 75% of new credit cards issued to internal customers Loss rates well within the range priced in Merchant acquiring – over 240,000 POS terminals, 53% growth in thru-puts in FY 2013
Indian GAAP figures. Fiscal year ended 31 st March. ` - Rupees FY 2013 – Fiscal year ended 31st March 2013 POS – Point of Sale 19 1
Banking on Rural India
Banking Services for the rural eco-system through customised loan and deposit products whilst maintaining credit standards
Local Government
Loan Products
Pre and Post Harvest Credit Tractor Loans Kisan Cards
Individuals
Small Working Capital Loan Sustainable Livelihood Banking Liability Products Regular / Basic Savings Bank Deposit Account
Food Processors
Self Help Groups
Term / Micro deposits
Other banking products
Life and General Insurance Payment ecosystem
Intermediaries (Arhatiyas, traders)
Farmers
Rural banking products offered through traditional and micro branches in the deeper geography of the country
Micro branches are primarily two member branches to expand and deepen the penetration in the rural market including in unbanked area.
20
Subsidiary Companies
HDB Financial Services Limited • • NBFC catering to certain customer segments not served by the Bank Main Products: Retail secured and unsecured loans, Insurance services and Collection
services
• • Network of 230 branches FY 2013 - Loan book : ` 82,037 million, Net Profit : ` 1,024 million
HDFC Securities Limited • • • • Amongst the leading equity brokerages in the country Over 190 branches and 1.6 million customers Revenues from brokerage as well as distribution of financial products FY 2013 - Net Profit : ` 668 million
` - Rupees
FY 2013 – Fiscal year ended March 31, 2013
21
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
22
Key Financials
`. In million
Quarter Ended Mar 2013 Net Interest Income Fees & Commissions FX & Derivatives Profit / (loss) on Investments Recoveries* Net Revenues 42,953 13,826 2,014 649 1,547 60,989 31,362 3,006 7,723 18,898
Quarter Ended Mar 2012 35,613 12,473 3,252 (715) 1,279 51,902 26,637 4,116 6,618 14,531
Change 20.6% 10.8% -38.1% -190.7% 21.0% 17.5% 17.7% -27.0% 16.7% 30.1%
Year Ended Mar 13 158,111 51,669 10,101 1,613 5,143 226,637 112,361 16,770 30,243 67,263
Year Ended Mar 12 128,846 43,121 11,388 (1,959) 5,286 186,682 92,776 18,774 23,461 51,671
Change 22.7% 19.8% -11.3% -182.3% -2.7% 21.4% 21.1% -10.7% 28.9% 30.2%
Operating Costs
Provisions & Contingencies Tax Profit After Tax
Indian GAAP figures (` Mn) , ` - Rupees;
*Recoveries includes miscellaneous income
23
Financial Highlights - Quarter ended March 2013
• • Net profit up by 30.1% to ` 18.9 Bn Gross advances increased by 22.6% to ` 2,413 Bn
•
• • • • • •
Deposits up by 20.1% to ` 2,962 Bn
CASA ratio at 47.4% Core Net Interest Margin at 4.5% Cost-to-income ratio at 51.4% Gross NPA / gross advances at 1.0% Net NPA / net advances at 0.2% Capital adequacy ratio (CAR) - total 16.8% of which tier I at 11.1%
Indian GAAP figures (Bn =Billion); ` - Rupees Net NPA = Gross NPA less specific loan loss provisions, Capital adequacy ratio computed as per Basel II guidelines. Comparisons are with respect to corresponding figures for the quarter ended March 31, 2012 24
Contents
Well positioned across GDP spectrum Meeting Diverse Customers’ Needs Unique Franchise in the Indian Banking Sector Key Business Initiatives
Financial Highlights
Value Proposition
25
Value Proposition – Healthy Growth, Low Risk
Growing economy / banking industry, Gaining market share Healthy balance sheet and revenue growth Disciplined margin and capital management with a focus on ROA/ROE Nationwide network, with expanding semi urban and rural footprint Wide Product range and multiple customer segment Branch Sales Process, Data Mining & CRM, geared for Cross sell Leveraging organic and inorganic growth opportunities
Leading (Top 3) player across multiple products
Strong Risk management, focus on asset quality
Proven ability to generate Shareholder Value
26
Certain statements are included in this release which contain words or phrases, such as “will”, “aim”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “future”, “objective”, “project”, “should”, and similar expressions or variations of these expressions, that are “forward-looking statements”. Actual results may differ materially from those suggested by the forward-looking statements due to certain risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to implement our strategy successfully, the market acceptance of and demand for various banking services, future levels of our non-performing loans, our growth and expansion, the adequacy of our allowance for credit and investment losses, technological changes, volatility in investment income, our ability to market new products, cash flow projections, the outcome of any legal, tax or regulatory proceedings in India and in other jurisdictions we are or become a party to, the future impact of new accounting standards, our ability to pay dividends, the impact of changes in banking regulations and other regulatory changes in India and other jurisdictions on us, our ability to roll over our shortterm funding sources and our exposure to market and operational risks. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what may actually occur in the future. As a result, actual future gains, losses or impact on net income could materially differ from those that have been estimated. Our forward looking statements speak only as of the date on which they are made and we do not undertake any obligation, and we do not intend, to update or revise any forward looking statements to reflect events or circumstances after the date in the statement, even if our expectations or any related events or circumstances change. In addition, other factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this document include, but are not limited to: general economic and political conditions, instability or uncertainty in India and other countries which have an impact on our business activities or investments caused by any factor including the global financial crisis and problems in the Eurozone countries, terrorist attacks in India, the United States or elsewhere, anti-terrorist or other attacks by the United States, a United States-led coalition or any other country, tensions between India and Pakistan related to the Kashmir region, military armament or social unrest in any part of India, the monetary and interest rate policies of the government of India, natural calamities, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in Indian and foreign laws and regulations, including tax, accounting and banking regulations, changes in competition and the pricing environment in India, and regional or general changes in asset valuations.
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