Investor Hdfc

8/10/2019 Investor Hdfc

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Investor Presentation


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Well positioned across Indias GDP spectrum

Meeting Diverse Customers Needs

Unique Franchise in the Indian Banking Sector

Key Business Initiatives

Financial Highlights

Value Proposition

1

Contents


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Well positioned across GDP spectrum

Private Consumption

Well positioned in urban and rural marketsLeading 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 publicsector and semi government undertakings

Investment

Term Loans for brown field and green field capex

Debt syndication Amongst the top 5 players in industry

Project financing to strong and established players

Leading working capital banker to capital goods

manufacturers

India GDP*

2

*Source CSO (GDP at Market Prices at current prices, FY 2014 data is advance estimates)

FY Fiscal year ended March 31

` - Rupees

`. Tn

Investment

Government

Private consumption

0

30

60

90

120

FY 2012 FY 2013 FY 2014


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Well positioned across GDP spectrumMeeting Diverse Customers Needs




Value Proposition

3

Contents


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Wide Range of Products and Customer Segments

Loan Products:

Auto Loans

Personal Loans

Home Loans / Mortgages

Commercial Vehicles FinanceRetail Business Banking

Credit Cards

Loans against Gold

2-Wheeler /Consumer Durable Loans

Construction Equipment FinanceLoans against Securities

Agri and Tractor loans

Education Loans

Other Products / Services:

Depository Accounts

Mutual Fund Sales

Private Banking

Insurance Sales (Life, General)NRI Services

Bill Payment Services

POS Terminals

Debit Cards

Foreign Exchange ServicesBroking (HDFC Securities Ltd)

Deposit Products:

Savings Accounts

Current Accounts

Fixed / Recurring Deposits

Corporate Salary Accounts

Loan products contd

Self Help Group LoansJoint Liability Group Loans

Kisan Gold Card

Key Segments:

Large Corporate

Emerging Corporates

Financial Institutions

Government / PSUs

Business Banking / SME

Supply Chain (Suppliers and Dealers)

Agriculture

Commodities

Products / Segments:

Foreign Exchange

Debt Securities

Derivatives

Equities

Other Functions:

Asset Liability Management

Statutory Reserve Management

Complete Suite of Products to Meet Diverse Customers Needs

Treasury

WholesaleBanking

RetailBanking

4

Commercial Banking:

Working Capital

Term Loans

Bill / Invoice discounting

Forex & Derivatives

Wholesale Deposits

Letters of Credit

Guarantees

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


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Total Deposits Gross Advances Profit Before Tax

5

Indian GAAP figures. Fiscal Year ended 31stMarch; ` - 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

Business Mix

Over 90% of net revenues from customer segments

Large retail deposit franchisea source of stable funding

Well balanced loan mix between wholesale and retail segments

Equally well positioned to grow both segments

`. Bn`. Bn `. Bn

0

1,850

3,700

2012 2013 2014

Retail Wholesale

0

1,550

3,100

2012 2013 2014

Retail Wholesale

0

70

140

2012 2013 2014

Retail Wholesale


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Value Proposition

6

Contents


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Strong National Network

All branches linked online, real time

55% of total branches (40% in Mar 11) in Semi-urban and Rural locations

Customer base of over 28 million, new

customer acquisition of 3 million in FY 2014

Branch classification

Mar 11 Mar 12Mar 13Mar 14

Branches 1,986 2,544 3,062 3,403

ATMs 5,471 8,913 10,743 11,256

Cities / Towns 996 1,399 1,845 2,171

Metro32%

Urban28%

SemiUrban

31%

Rural9%

Mar 11

Metro23%

Urban21%

SemiUrban34% Rural

22%

Mar '14

FY Fiscal year ended March 31


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-

1,850

3,700

2012 2013 2014

Time Savings Current

Total Deposits Core CASA Ratio Average Saving Balance per Account

Healthy proportion of CASA (current & savings) deposits

Floats from multiple transactional banking franchises

Provides customer base for ongoing cross-sell through branches

Raised US$ 3.4 billion FCNR deposits and swapped into rupees at a concessional rate

with RBI in November 2013

`. Bn

Indian GAAP figures. Fiscal year ended 31st March; FCNRForeign Currency Non-Resident

Core CASA ratio based on daily average balances for the year

` - Rupees

8

`.

High Quality Deposit Franchise

0%

26%

52%

2012 2013 2014

Savings Current

0

26,000

52,000

2012 2013 2014


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Amongst the lowest deposit costs in the industry

Healthy marginsrelatively stable across interest rate and economic cycles

Average yields supported by higher proportion & product mix of retail loans

Indian GAAP figures. Fiscal year ended 31st March

9

Low Funding Costs Healthy Margins

4.43% 4.47% 4.37%

0.00%

3.00%

6.00%

2012 2013 2014

Net Interest Margin

5.72%6.13% 5.97%

0.00%

3.50%

7.00%

2012 2013 2014

Cost of Deposits


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Indian GAAP figures ; FY - Fiscal Year ended 31 stMarch.

* Recoveries includes miscellaneous income

` - Rupees

10

Strong Non-Funded Revenues

Multiple sources of fees &

commissions:

Banking charges (Retail & Wholesale)Retail Asset FeesCredit card FeesThird party product salesCash management

Trade FinanceDepositary chargesCustody

`. Mn

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

FY 2012 FY 2013 FY 2014

Fees & Commission

Fx & Derivatives

Recoveries*

P/L on Investments

Other Income (non-fund revenues) at 30% of Net Revenues in FY 2014

Composition of Other Income in FY 2014:

Fees and commission 72%, FX and Derivatives Revenues 18%,

Recoveries from written-off accounts 9%,

Profit / Loss on sale of Investments 1%


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% Customer Initiated Transactions by Channel

2004

Multiple Delivery ChannelsGreater Choice and Convenience for Our Retail

Customers

Central / Regional Processing Units Economies of Scale; Branch focus: Sales & Service

Electronic Straight Through Processing Lower Transaction Costs & Error Rates

Data Warehousing, CRM, Analytics Higher Sales & Credit Efficiencies, Cross-sell

Innovative Technology Applications Enable new Products / Channels including Apps

2014

11

Leveraging Technology

Branches27%

Phone Banking10%

Internet & Mobile10%

ATM53%

ATM25%

Branches15%

Internet & Mobile55%

Phone Banking5%

The charts above cover only transactions initiated by our own customers at our channels and which could have been transacted at the Banks 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. Apps include Micro/Lite App, Smart Phone App and Tablet App


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NPA% to Advances Loan Loss Provisions`. Bn

Amongst the best portfolio quality (wholesale & retail) in the industry

Strong credit culture, policies, processes

Specific provision cover at 73% of NPAs, total coverage ratio over 100%

Restructured loans at 0.2% of the Bank's gross advances as on March 31, 2014

Floating provisions at`18.4 Bn as on March 31, 2014

NPA rate lower than 10 year average even in current challenging environment

Indian GAAP figures. Fiscal year ended 31stMarch.

Net Non Performing Assets (NPA) = Gross NPA less specific loan loss provisions

` - Rupees

12

Healthy Asset Quality

-0

18

35

2012 2013 2014

Gross NPAs Specific Provision General Provision

1.02% 0.97% 0.98%

0.18% 0.20% 0.27%

0%

1%

2%

2012 2013 2014Gross NPA % Net NPA %


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Net Profit`. Mn

Indian GAAP figures. Fiscal year ended 31st March

113

Consistent Financial Performance

-

42,500

85,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

ROA EPS`.

1.5% 1.6%1.8%

1.9%2.0%

0%

1%

2%

2010 2011 2012 2013 2014

13.517.0

22.1

28.5

35.5

0

18

36

2010 2011 2012 2013 2014


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Well diversified product mix

Balancing volumes and market

share with margins and risk

Home Loans*origination` 118.9

Bn and buyback`

55.6 Bn for FY2014

Loan losses for most products

stable and within product pricing

parameters

`. Bn

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 againstSecurities, etc

Indian GAAP figures. Fiscal year ended 31st March; ` - Rupees, Overseas RetailSecured by Deposits

115

Retail Loans Profitable Growth

AutoLoans

BusinessBanking

Personal Loans

Home Loans

OverseasRetail

CommercialVehicles

Credit Card

Kisan Gold Card

Others

Gold Loans

0

850

1,700

2012 2013 2014

Two wheelers


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`. Bn Wholesale Advances

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 ,commodity finance and other consumer loans over ` 50 million.

FIGFinancial Institutions and Government group, CV/CELarge ticket commercial vehicle and construction equipment loans ` - Rupees

116

Wholesale Banking - Accessing Multiple Segments

Leveraging relationships with large & emerging

corporates for multiple revenue streams

Balanced mix between working capital financing,

term loans and transactional banking

Well diversified loan portfolio

Investment banking capability across multiple

industry segments and product verticals

0

750

1,500

2012 2013 2014

FIG

CV / CE

Others

Business Banking

Emerging Corporate

Corporate

Leading provider of electronic banking services for supply chain management (SCM)

Structured cash management-cum-vendor/distributor finance

Corporate

Dealers

DistributorsOEM Customers

Vendors


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0

850

1,700

2012 2013 2014

Primary Settlements Accounts(Stock Exchanges)

0

17,000

34,000

2012 2013 2014

Gross Cash Management Volumes * Nos.

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

`. Bn

117

Focus on Transactional Banking Opportunities


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0

7,500

15,000

2012 2013 2014

FX & Derivatives Revenues

RevenuesLargely 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

CorpCorporate, ECGEmerging Corporate Group, BBBusiness Banking, FIGFinancial Institutions & Government Group;

Others includes Capital Markets and Commodity Finance

`. Mn

118

Customer Focused Treasury Products

Corp15%

ECG10%

Retail59%

BB5%

FIG4%

Others7%

Customer Revenues Mix


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0

65

130

2012 2013 2014

Market leader in credit cards

Over 70% of new credit cards issued to internal customers

Rationalisation of inactive cards

Merchant acquiringover 215,000 POS terminals, 30% growth in thru-puts in FY 2014

Number of Cards Credit Cards Receivables Acquiring Thruputs

Indian GAAP figures. Fiscal year ended 31stMarch. ` - Rupees

FY 2014Fiscal year ended 31stMarch 2014

POSPoint of Sale

`.Bn `.BnMn

119

Cards Market Leadership

0

12

24

2012 2013 2014

Debit cards Credit cards

0

500

1,000

2012 2013 2014


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HDB Financial Services Limited

NBFC catering to certain customer segments not served by the Bank

Main Products: Retail (LAP, CV/CE, PL), Insurance services and Collection services

Network of 275 branches

FY 2014 - Loan book :`133.9 Bn, Net Profit :`2.1 Bn

FY 2014 - Gross NPA : 0.81%, Capital adequacy ratio (CAR) : 18.4%HDFC Securities Limited

Amongst the leading equity brokerages in the country

Over190 branches and 1.9 million customers

Revenues from equity broking as well as distribution of financial products

FY 2014 - Net Profit :`784 million

21

Subsidiary Companies

` - Rupees

FY 2014Fiscal year ended March 31, 2014; LAPLoan Against Property; CV/CECommercial Vehicle and Construction Equipment Loans;

PLPersonal Loans


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Value Proposition

22

Contents


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Indian GAAP figures ( Mn) , ` - Rupees.

23

Key Financials

`. In million

Quarter

Ended

Sep14

Quarter

Ended

Sep13

Change

Year

Ended

Mar14

Year

Ended

Mar13

Change

Net Interest Income 55,110 44,765 23.1% 184,826 158,111 16.9%

Fees & Commissions 15,365 13,544 13.4% 57,349 51,669 11.0%

FX & Derivatives 2,217 5,014 -55.8% 14,011 10,101 38.7%

Profit / (loss) on Investments 951 (1,733) - 1,105 1,613 -31.5%

Recoveries 1,938 1,619 19.7% 6,732 5,143 30.9%

Net Revenues 75,581 63,209 19.6% 264,023 226,637 16.5%

Operating Costs 34,979 29,342 19.2% 120,422 112,361 7.2%

Provisions & Contingencies 4,559 3,859 18.1% 15,880 16,770 -5.3%

Profit Before Tax 36,043 30,008 20.1% 127,720 97,506 31.0%

Tax 12,228 10,184 20.1% 42,937 30,243 42.0%

Profit After Tax 23,815 19,824 20.1% 84,784 67,263 26.0%


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Net revenues up by 19.6% to` 75.6 Bn

Net Interest Margin at 4.5%

Cost-to-income ratio at 46.3%

Net profit up by 20.1% to` 23.8 Bn

Gross advances increased by 21.8% to`3,295 Bn

Deposits up by 24.8% to`3,907 Bn

Gross NPA / gross advances at 1.0%

Net NPA / net advances at 0.3%

Capital adequacy ratio (CAR)* - Total 15.7% of which Tier I at 11.8%

24

Indian GAAP figures (Bn =Billion); ` - Rupees;Net NPA = Gross NPA less specific loan loss provisions;

* Capital adequacy ratio computed as per RBIs Basel III regulations

Comparisons are with respect to corresponding figures for the quarter ended September 30, 2013

Financial Highlights - Quarter ended September 2014


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Well positioned across GDP spectrum

Meeting Diverse Customers Needs


Key Business InitiativesFinancial Highlights

Value Proposition

25

Contents


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26

Value Proposition Healthy Growth, Low Risk

Healthy balance sheet andrevenue growth

Leveraging organic andinorganic growth

opportunities

Proven ability to generateShareholder Value

Branch Sales Process,Data Mining & CRM,geared for Cross sell

Strong Risk management,

focus on asset quality

Disciplined margin andcapital management with a

focus on ROA/ROE

Nationwide network, withexpanding semi urban and

rural footprint

Growing economy /banking industry,

Gaining market share

Leading player acrossmultiple products

Wide Product range andmultiple customer

segments


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Certain statements are included in this release which contain words or phrases, such as will,aim,believe,expect,willcontinue,

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 toimplement 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, any penalties imposed by the RBI, 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 short-term 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, any downgrade in

Indiasdebt rating or the debt rating of our borrowings, 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 theKashmir 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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