Investor PresentationJuly 2020
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The i n format ion conta ined in th is presenta t ion i s prov ided by Axis Bank L im i ted ( the “Bank ”) to you so le ly for your re ference. Th i s document i s be ing g iven so le ly for your in format ion and for your use and may not be re ta ined by you and ne i ther th is presenta t ion nor any par t thereof may be ( i ) used or re l ied upon by any o ther par ty or fo r any o ther purpose; ( i i ) cop ied, photocop ied, dup l i ca ted or o therwise reproduced in any form or by any means; or ( i i i ) red is t r ibu ted, passed on or o therwise d isseminated, to any o ther person wi thout the pr ior wr i t ten consent o f the Ban k . A l though care has been taken to ensure that the in format ion in th is presenta t ion i s accurate , and that the op in ions expressed are fa i r and reasonable , the in format ion i s sub jec t to change wi thout not i ce , i t s accuracy i s not guaranteed and has not been independent ly ver i f ied . No representa t ion, warranty, guarantee or under tak ing (express or impl ied) i s made as to , and no re l iance shou ld be p laced on, the accuracy, comple teness or cor rec tnes s o f any in format ion, inc lud ing any pro jec t ions , es t imates , ta rgets and op in ions , conta ined here in , and accord ing ly, none o f the Bank , i t s adv isors , representa t i ves or any o f i t s d i rec tors assumes any respons ib i l i t y o r l i ab i l i t y fo r , the accuracy or comple teness o f , o r any er rors or om iss ions in , any in format ion or op in ions conta ined here in . None o f the Bank , i t s adv isors , representa t i ves and i ts d i rec tors , o f f i cers , employees or a f f i l i a t es nor any o ther person accepts any l iab i l i t y ( in neg l igence, or o therwise) whatsoever for any loss howsoever ar i s ing f rom any use o f th is presenta t ion or i t s contents or o therwise ar i s ing in connect ion therewi th .
The s ta tements conta ined in th is document speak on ly as a t the date as o f wh ich they are made, and the Bank express ly d isc la ims a ny ob l igat ion or under tak ing to supp lement , amend or d isseminate any updates or rev is ions to any s ta tements conta ined here in to re f lec t any change in events , cond i t ions or c i rcumstances on which any such s ta tements are based. By prepar ing th is presenta t ion, none o f the Bank , i t s management , and the i r respec t i ve adv isers under takes any ob l igat ion to prov ide the rec ip ient wi th access to any add i t iona l in format ion or to update th is presenta t ion or any add i t iona l in format ion or to cor rec t any inaccurac ies in any such in format ion which may become apparent . Th is document does not cons t i tu te or fo rm par t o f and shou ld not be cons t rued as an o f fer to se l l o r i ssue or recommendat ion or so l i c i ta t ion o f an o f fer to buy or acqu i re secur i t ies o f the Bank or i t s subs id iar ies or a f f i l i a tes in any ju r i sd ic t ion or as an inducement to enter in to inves tment ac t i v i ty. No par t o f th is document , nor the fac t o f i t s d is t r ibu t ion, shou ld form the bas is o f , o r be re l ied on in connect ion wi th , any cont rac t or commi tment or inves tment dec is ion whatsoever . You acknowledge that you wi l l be so le ly respons ib le for y our own assessment o f the market and the market pos i t ion o f the Bank and that you wi l l conduct your own ana lys is and be so le ly respons ib le for fo rm ing your own v iew of the potent ia l fu ture per formance o f the bus iness o f the Bank . Th is document i s not f inanc ia l , lega l , tax or o ther produc t adv ice.
Pas t per formance in format ion in th is presenta t ion shou ld not be re l ied upon as an ind icat ion o f (and i s not an ind icator o f ) fu tur e per formance. Th is presenta t ion conta ins s ta tements that cons t i tu te forward - look ing s ta tements which invo lve r i sks and uncer ta in t ies . These s ta tements inc lude descr ip t ions regard ing the in tent , be l ie f or cur rent expec ta t ions o f the Bank or i t s o f f i cers and in format ion cur rent l y ava i lab le wi th them inc lud ing wi th respec t to the conso l idated resu l ts o f operat ions and f inanc ia l cond i t ion , and fu ture events and p lans o f the Bank . These s ta tements can be recognised by the use o f words such as “expec ts ” , “p lans” , “wi l l ” , “es t imates” , “ in tends” or words o f s im i la r meaning. Such forward - look ing s ta tements are not guarantees o f fu ture per formance and invo lve r i sks and uncer ta in t ies , and ac tua l resu l ts may d i f fe r f rom those in the forward - look ing s ta tements as a resu l t o f var ious fac tors and assumpt ions . You are caut ioned not to p lace undue re l iance on these forward look ing s ta tements , wh ich are based on the cur rent v iew of the management o f the Bank on fu ture events . No assurance can be g iven that fu ture events wi l l occur , or that assumpt ions are cor rec t . Ne i ther the Bank nor i t s adv isors or representa t i ves assume any respons ib i l i t y to amend, modi fy or rev ise any forward - look ing s ta tements , on the bas is o f any subsequent deve lopments , in format ion or events , or o therwise.
This presenta t ion i s not a prospec tus , a s ta tement in l i eu o f a prospec tus , an o f fer ing c i rcu lar , an adver t i sement or an o f fer doc ument under the Companies Ac t , 2013, and the ru les made thereunder , as amended, the Secur i t ies and Exchange Board o f Ind ia ( Issue o f Capi ta l and D isc losure Requi rements ) Regula t ions , 2018, as amended, or any o ther app l i cab le law in Ind ia .
In add i t ion , as th is presenta t ion on ly conta ins genera l , summary and se lec ted in format ion about the Bank , i t may om i t mater ia l i n fo rmat ion about the Bank and is not a comple te descr ip t ion o f the Bank ’s bus iness and the r i sks re la t ing to i t . Therefore , th is presenta t ion shou ld not fo rm the bas is o f any inves tment dec is ion to purchase or se l l t he Bank ’s secur i t ies .
This presenta t ion inc ludes cer ta in indus t ry data and pro jec t ions that have been obta ined f rom pub l i c l y ava i lab le documents f rom va r ious sources , inc lud ing indus t ry pub l i ca t ions and surveys . Such pub l i c l y ava i lab le documents , indus t ry pub l i ca t ions and surveys and forecas ts genera l l y s ta te that the in format ion conta ined there in has been ob ta ined f rom sources be l ieved to be re l iab le , but there i s no assurance that the in format ion i s accurate or comple te . Ne i ther the Bank nor any o f i t s adv isors or representa t i ves have independent ly ver i f ied any o f the data f rom th i rd -par ty sources or ascer ta ined the under lying economic assumpt ions re l ied upon there in . A l l i ndus t ry data and pro jec t ions conta ined in th is presenta t ion are based on data obta ined f rom the sources c i ted and invo lv e s ign i f i cant e lements o f sub jec t i ve judgment and ana lys is , wh ich may or may not be cor rec t . For the reasons ment ioned above, you shou ld not re ly in any way on any o f the pro jec t ions conta ined in th is presenta t ion for any purpose.
The d is t r ibut ion o f these mater ia ls in cer ta in jur i sd ic t ions may be res t r i c ted by law and persons in to whose possess ion these mat er ia ls comes should in form themselves about and observe any such res t r i c t ions .
This presenta t ion and the in format ion conta ined here in does not cons t i tu te or fo rm par t o f any o f fer fo r sa le or recommendat ion or subscr ip t ion o f or so l i c i ta t ion or inv i ta t ion o f any o f fer to buy or subscr ibe for any secur i t ies o f the Bank , nor shou ld i t o r any par t o f i t fo rm the bas is o f , o r be re l ied on in connect ion wi th , any cont rac t or commi tmen t whatsoever . Th is presenta t ion i s not an o f fer o f secur i t ies for sa le in the Uni ted S ta tes . Secur i t ies may not be o f fered or so ld in the Uni ted S ta tes absent reg is t ra t ion or an exempt ion f rom reg is t ra t ion.
By access ing th is presenta t ion, you accept that th is d isc la imer and any c la ims ar is ing out o f the use o f the in format ion f rom th is presenta t ion sha l l be governed by the laws o f Ind ia and on ly the cour ts in Ind ia , and no o ther cour ts , sha l l have jur i sd ic t ion over the same.
The in format ion conta ined in th is presenta t ion i s s t r i c t l y pr i va te and conf ident ia l and has been prov ided for in format iona l purpo ses only. Th is presenta t ion and the in format ion conta ined here in may not be d isc losed, reproduced or used in whole or in par t fo r any purpose or fu rn ished to any o ther person or persons . The persons who are or wh o may come in possess ion o f th is document , hereby under take to observe the res t r i c t ions conta ined here in .
Disclaimer
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Agenda
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Axis Bank – At a glance 04
Business Highlights 05
Financial Highlights 13
Appendix: Financial Summary 18
3rd Largest Private Sector Bank in India in terms of total assets (1)
Axis Bank – At a glance
Size of Balance Sheet (2) Scale of retail presence (2) Prudent Risk Management (2) Robust Financial Metrics (7)
INR8,971bn
Total assets
4,528Domestic branches + Extension
counters
75%
Provision Coverage Ratio
(excludes technical write-offs) (3)
19.5%Growth in net interest income
(Q1FY21 vs Q1FY20)
INR5,613bn
Net advances
17,456ATMs and cash deposit and
withdrawal machines
17.47%Basel III Total CAR (4)
3.40%
NIM – Overall (8)
INR6,282bn
Total deposits
83%
CASA + RTD as % of total deposits (2)
13.50%
Basel III CET I CAR (5)
38.94%Cost to income ratio (9)
INR861bn
Shareholders’ funds
53%
Retail advances as % of total net
advances (2)
1.23%
Net NPA (6)
INR305Book value per equity share (10)
4
Note Figures and financials for the quarter ending June 30, 2020, unless specified otherwise. Figures rounded off to nearest integral values
(1) As on March 31st, 2020. Source: Public filings (2) End of period figures; data as of 30 June 2020
(3) Calculated as closing Gross NPAs minus Net NPA divided by closing Gross NPAs (4) Includes profit for Q1FY21
(5) Includes profit for Q1FY21 (6) As % of net customer assets. Net customer assets include advances, credit substitutes after deductions of provisions
(7) Data for the quarter ended 30 June 2020 (8) Annualized; Ratio of net interest income to daily average interest earning assets for Q1FY21
(9) Ratio of operating expenses to sum of net interest income and non-interest income (10) Shareholders’ funds divided by number of total equity shares outstanding as of 30 June 2020
Business highlights
5
2,065 2,458 3,054 2,986
587 656
619 571 1,744
1,834
2,041 2,056 4,397
4,948
5,714 5,613
Mar-18 Mar-19 Mar-20 Jun-20
Retail SME Corporate
4,536
5,485
6,401 6,282
Mar-18 Mar-19 Mar-20 Jun-20
Healthy growth in deposits supporting balanced growth in advances
Balance Sheet growth
6
Deposits (1) Advances (2)
Note: Figures rounded off to nearest integral values.
(1) End of period numbers
(2) Figures on net advances basis
16% YOY
All figures in INR bn
• Including TLTRO investments, advances grew 16.5% YoY as of 30 June
2020 to INR 5,794bn
• Corporate loan portfolio increased 26% YoY including TLTRO
investments as of 30 June 2020
39% 35% 34% 34%
25% 20%17% 15%
36%45%
49% 51%3,817
4,423
5,171 5,238
Mar-18 Mar-19 Mar-20 Jun-20
SA CA Retail Term Deposits
5.15%
5.43% 5.48%
FY18 FY19 FY20
Granularization of deposits profile helping optimize cost of funds
Retail segment
7
Retail deposits (CASA plus RTD) (1) Cost of funds (%) (3)
Note: Figures rounded off to nearest integral values. RTD – Retail Term Deposits (Term deposits from individuals, term deposits of up to INR 50mn from non-individuals)
(1) Based on end of period numbers
(2) As % of total deposits
(3) Computed based on daily average balances. Calculated as ratio of total interest expense to average interest-bearing liabilities for the period
1A
84% 81% 81% 83%
Mar-18 Mar-19 Mar-20 Jun-20
Share of retail deposits (1)(2)
All figures in INR bn
Retail loan book is well diversified and stood at 53% of total loans
Retail segment
8
Note: Figures rounded off to nearest integral values for share of retail in advances and share of retail in fee income. Figures rounded off to one decimal for retail loan book mix.
PL – Personal loans, LAP – Loan against property, CC – Credit card loans, SB loans – Small business loans
(1) As % of total net advances
(2) Others primarily includes education loans, gold loans, business equipment loans, loans against deposit and other non-schematic loans
(3) Retail fee income includes income from cards, mutual fund & insurance distribution, other retail fees including forex exchange services fees
1B
47% 50% 53%
Mar-18 Mar-19 Mar-20
Share of retail in advances (1)
55%61% 64%
FY18 FY19 FY20
Share of retail in fee income (3)
41% 39% 36%
15% 14%12%
10%11%
13%
10% 12% 13%
8% 8% 9%
4% 5% 5%3% 3% 4%9% 8% 8%
Mar-18 Mar-19 Mar-20
Mortgage loans Retail agriculture loansAutomobile loans PLLAP CCSB loans Others
Retail loan book mix
(2)
Well distributed Pan-India branch network
Retail segment
9
Note: Figures rounded off to nearest integral values
(1) Includes extension counters
(2) Geographical distribution is as of June 30, 2020 based on RBI classification
(3) Classification by category as of June 30, 2020 based on the India 2011 census
1C
3,7034,050
4,528 4,528
Mar-18 Mar-19 Mar-20 Jun-20
Domestic branch network (1)
Branch presence classified by
geography (2)
North
23%
East19%
West19%
South24%
Central15%
Branch presence classified by
category (3)
Metro
30%
Urban23%
Semi-Urban31%
Rural16%
Strong relationship led wholesale franchise driving synergies across One Axis entities
Wholesale segment
• Re-oriented coverage groups and
strengthened operations & service
infrastructure
• Leveraged ‘One Axis’ platform to provide
comprehensive solutions to clients
Full
service
wholesale
bank
1
2
3
4
‘One stop shop’ for banking needs of Indian corporates
Investment Banking / Capital Markets
• Debt Capital Markets (DCM)
• Equity Capital Markets (ECM)
• M&A & Advisory
• Forex & Derivative Solutions
Commercial Banking
• Working Capital / Term Loans
• Letter of Credit / Bank Guarantee
• Bill / Invoice Discounting, Supply Chain financing
• Wholesale Deposits
Transaction Banking
• Cash Management Services (Collection / Payment)
• Current Accounts
• Custodial Services
• Correspondent Banking Services
Linkage to Retail Bank
• Wealth Management – Burgundy / Burgundy Private
• Salary Accounts of employee
Reliable Partner Throughout the Business Life Cycle
Axis Capital
Axis MF
A. Treds
Axis Trustee
Axis Finance
10
2
• Approximately 95% of the new corporate
loans sanctioned in FY20 and FY19 were
rated A- and above
32% 34% 31%
68% 66% 69%
Mar-18 Mar-19 Mar-20
WC loans Term loans
13% 12% 18%
34% 39%39%
30%31%
26%
18% 14% 13%
5% 4% 4%
Mar-18 Mar-19 Mar-20
AAA AA A BBB BB and below
1,744 1,834
2,041
Mar-18 Mar-19 Mar-20
Better rated originations; focus on short term loans
Corporate segment
Corporate loans (1)
Corporate loan book mix
(by type)
Corporate loan book mix
(by rating)
Note: Figures rounded off to nearest integral values
(1) Figures on net advances basis
(2) Includes AA+, AA and AA-
(3) Includes A+, A and A-
(4) Includes BBB+, BBB and BBB-
(5) Includes BB+, BB and BB- and below11
2A
All figures in INR bn
(2) (3) (4) (5)
587
656619
Mar-18 Mar-19 Mar-20
Majority of SME book is secured and predominantly working capital financing
Commercial segment
77% 79% 77%
23% 21% 23%
Mar-18 Mar-19 Mar-20
WC loans Term loans
12
SME loan book (1) SME book mix (by type) SME book mix (by rating) (2)
2B
All figures in INR bn
Note: Figures rounded off to nearest integral values
(1) Figures on net advances basis
(2) SME rating scale goes from SME1 to SME8 with SME1 denoting highest credit quality. SME3 represents “Good” credit quality (CRISIL) – Better than above average credit quality (SME4)
85% 85%87%
15% 15%13%
Mar-18 Mar-19 Mar-20
SME3 or better Others
Financial highlights
13
Note: Figures rounded off to nearest integral values for operating revenue and operating profit. NIM for Q1FY21 is annualized
(1) Represents the ratio of net interest income to daily average interest earning assets
(2) Calculated on a quarterly average basis
(3) Operating profit calculated as sum of interest earned and Other Income, reduced by Interest Expended and Operating Expenses
Steady operating performance across parameters
Financial performance
3.44% 3.43%3.51%
3.40%
FY18 FY19 FY20 Q1FY21
Net Interest Margin (NIM) (1)
2.17%
2.13%
2.09%
FY18 FY19 FY20
Opex to average assets (2)
156
190
234
58
3
4716 11
0
50
100
150
200
250
FY18 FY19 FY20 Q1FY21
Operating profit and Net profit (3)
Operating Profit Net Profit
14
All figures in INR bn
186 217 252
70
110 131
155
26
296
348
407
96
FY18 FY19 FY20 Q1FY21
Operating revenue
Net Interest Income Non-Interest Income
6.77%
5.26% 4.86% 4.72%
3.40%
2.06%1.56% 1.23%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
Mar-18 Mar-19 Mar-20 Jun-20
Gross NPA Net NPA
Strengthening the Balance Sheet with prudent provisioning practices
Asset quality
3.57%
1.91%2.15%
FY18 FY19 FY20
Credit costBB and below advances as % of gross
customer assets
Note: Figures rounded off to nearest integral values for PCR and cumulative value of provisions.
(1) Excludes technical write-offs. Calculated as closing Gross NPAs minus Net NPA divided by closing Gross NPAs
(2) As % of gross customer assets. Gross customer assets include advances, credit substitutes before provisions
(3) As % of net customer assets. Net customer assets include advances, credit substitutes after deductions of provisions15
Movement in GNPA and NNPA
1.78%
1.32%
1.05%
Mar-18 Mar-19 Mar-20
52%
62%
69%
75%
FY18 FY19 FY20 Q1FY21
(2) (3)
Provision Coverage Ratio (1)
• The Bank has adopted a prudent and conservative approach towards
provisioning to mitigate the impact of the Covid-19 pandemic
• In order to address the impact of the COVID-19 situation, the Bank made
an additional provision of INR30bn in FY20
All figures in INR bn
13.04% 12.54% 14.49% 14.44%
3.53% 3.30% 3.04% 2.85%
16.57% 15.84% 17.53% 17.29%
Mar-18 Mar-19 Mar-20 Jun-20
Tier I CAR Tier II CAR
Strong capital position with adequate liquidity
Capital & Liquidity
75%69% 67%
Mar-18 Mar-19 Mar-20
Bank’s Capital Adequacy Ratio (1) RWA to Total Assets (3)
Note: Figures rounded off to nearest integral values for RWA to total assets ratio and Liquidity Coverage Ratio
(1) Computed in accordance with RBI guidelines under Basel III
(2) Excludes profit for Q1FY21
(3) Calculated as Total risk weighted assets and contingents divided by total assets at the end of the period
(4) As of 30 June, 202016
All figures in INR bn
• The Bank holds excess SLR of INR 266bn (4)
• Total CAR including Q1FY21 profit
stood at 17.47% as of 30 June 2020
• For the quarter ended 31 March 2020 and the
three months ended 30 June 2020, the Bank’s
average liquidity coverage ratio was 113.4%
and 120% respectively
Liquidity coverage
(2)
Measures taken in relation to Covid-19
Note: CERT - Central Emergency Response Team 17
Operational measures
• Activated the CERT and Axis’ risk assessment and business continuity plans
• Enabled employees to work from home
• Conducted mock drills and set up business continuity plans to ensure that all critical activities can be carried out from remote locations
• Organized online training programs on skill development for the Bank’s users
• Activated additional digital channels for payments. Sending payment links to customers with pre-filled data, making it convenient for customers to make
payments
• ‘Awareness calls' done with customers to inform them of the terms of the moratorium
Supporting the community
• Bank has operationalized RBI’s COVID-19 regulatory package, thereby
offering payment moratorium to eligible borrowers
• Committed INR 1,000mn for fighting the Covid-19 pandemic
Prudent provisioning
• As on 31 March 2020, the Bank made an additional provision of
INR30bn for COVID-19 pandemic
• Made additional provisions of INR7.3bn during Q1FY21 taking total
Covid-19 related provisions to INR37.3bn as of 30 June 2020
Appendix
18
Standalone Profit & Loss Account
Financial Summary
19
Financial Performance (INR mn) Q1FY21 Q1FY20 FY20 FY19 FY18
Interest Income (1) A 165,389 152,549 626,352 549,858 457,803
Other Income B 25,867 38,688 155,366 131,303 109,671
Total Income C = A + B 191,256 191,237 781,718 681,161 567,474
Interest Expended D 95,536 94,113 374,290 332,776 271,626
Net Interest Income E = A – D 69,853 58,436 252,062 217,082 186,177
Operating Revenue F = E + B 95,720 97,124 407,427 348,385 295,848
Operating Expenses G 37,276 38,196 173,046 158,334 139,903
Operating Profit H = F – G 58,444 58,928 234,381 190,051 155,945
Provisions and Contingencies I 47,322 45,227 218,109 143,285 153,188
Net Profit J = H - I 11,122 13,701 16,272 46,766 2,757
EPS Diluted (in INR) (2) 3.94 5.26 5.97 18.09 1.12
Return on Average Assets (annualized) 0.48% 0.69% 0.20% 0.63% 0.04%
Return on Equity (annualized) 5.74% 9.19% 2.34% 8.09% 0.53%
Capital Adequacy Ratio (Basel III) (3) 17.29% 15.82% 17.53% 15.84% 16.57%
Note: Figures rounded off to nearest integral values. Financial information prepared in accordance with Indian GAAP
(1) Interest earned includes dividends earned on equity and preference shares and units of mutual funds
(2) Diluted EPS for Q1FY21 and Q1FY20 are not annualized
(3) Capital adequacy ratios are computed in accordance with RBI guidelines
Standalone Balance Sheet
Financial Summary
20
Balance Sheet (INR mn) As on 30th Jun’20 As on 30th Jun’19 As on 31st Mar’20 As on 31st Mar’19 As on 31st Mar’18
Capital And Liabilities
Capital 5,644 5,239 5,643 5,143 5,133
Reserves & Surplus 855,066 707,037 843,835 661,620 629,320
Deposits 6,281,503 5,406,777 6,401,050 5,484,713 4,536,227
Borrowings 1,428,360 1,301,214 1,479,541 1,527,758 1,480,161
Other Liabilities and Provisions 400,809 325,395 421,579 330,731 262,455
Total 8,971,382 7,745,662 9,151,648 8,009,965 6,913,296
Assets
Cash and Balances with RBI / Banks and
call money600,800 382,769 972,682 672,046 434,549
Investments 1,873,231 1,757,915 1,567,343 1,749,693 1,538,761
Advances 5,613,408 4,972,760 5,714,242 4,947,980 4,396,503
Fixed Assets 43,589 40,532 43,129 40,366 39,717
Other Assets 840,355 591,686 854,252 599,880 503,766
Total 8,971,382 7,745,662 9,151,648 8,009,965 6,913,296
Note: Figures rounded off to nearest integral values. Financial information prepared in accordance with Indian GAAP
Thank You