2012 02 IIFL Investor Presentation

7/30/2019 2012 02 IIFL Investor Presentation

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ICICI Group: Strategy &PerformanceFebruary 2012


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Certain statements in these slides are forward-looking statements.These statements are based on management's current expectations andare subject to uncertainty and changes in circumstances. Actual resultsmay differ materially from those included in these statements due to avariety of factors. More information about these factors is contained inICICI Bank's filings with the US Securities and Exchange Commission.All financial and other information in these slides, other than financialand other information for specific subsidiaries where specificallymentioned, is on an unconsolidated basis for ICICI Bank Limited onlyunless specifically stated to be on a consolidated basis for ICICI BankLimited and its subsidiaries. Please also refer to the statement ofunconsolidated, consolidated and segmental results required by Indianregulations that has, along with these slides, been filed with the stockexchanges in India where ICICI Banks equity shares are listed and withthe New York Stock Exchange and the US Securities and ExchangeCommission, and is available on our website www.icicibank.com


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Agenda

Strategy & executionFinancial results: Q3-2012

Recent economic developments


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Economic developments

Currenttrends

z Advance estimate for GDP growth forFY2012 at 6.9% by CSO; at 7.0% by RBI

z Growth in IIP for Apr-Dec 2011 at 3.6%compared to 8.3% for Apr-Dec 2010

z Corporate performance: moderation insales and net profits both on a y-o-y andsequential basis

Outlookz Growth outlook expected to improve

z Moderation in inflationz Expectations of reversal in interest

rate cyclez Policy and administrative steps to

facilitate investments


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Credit & depositszNon-food credit growth at 16.7% y-o-y at Jan 13, 2012

z 21.2% at March 25, 2011 and 23.2% at Jan 14, 2011

Non-food credit growth moderated to 16.7% y-o-y

z Total deposits: 17.2% y-o-y increase at Jan 13, 2012z 15.9% at March 25, 2011 & 16.5% at Jan 14, 2011

zDemand deposits: increase of 5.1% y-o-y at Jan 13, 2012z Demand deposit growth declined till end-Dec 2011

Deposit growth improving


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Monetary policy action: January 2012CRR reduced by 50 basis points, repo rate unchangedzMonetary policy stance

z Maintain an interest rate environment to contain inflationand anchor inflation expectationsz Manage liquidity to ensure it remains in moderate deficit,consistent with effective monetary transmissionz Respond to increasing downside risks to growth

zGDP growth estimate for FY2012 revised to 7.0%zNon-food credit growth estimate revised to 16.0% atend-Mar 2012z Inflation estimates maintained at 7.0% by March 2012zNeed for fiscal consolidation emphasised


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Agenda




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Our strategic pathFY2010

z 4Cs: CASA,Costs, CreditQuality & Capital

FY2011z Resume

balance sheetgrowth

FY2012onwardsz Accelerategrowth

z Position thebalance sheetfor growth

z Furtherimprovefunding mixthrough retailterm depositgrowth

z Improve RoA:sharpreduction inprovisions

z On the back ofimprovedliabilitystructure &RoA

z Leveragecapital toincrease RoE

Based on long-term economic growthoutlook for the Indian economy


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Progress against strategy: funding profile

Current accountdeposits

Savingsdeposits

March31, 2009

December31, 2011

CAGR410.36

216.32

734.98

400.39

23.6%

25.1%CASA ratio 28.7% 43.6%

` in bnImprovement in funding profile


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Progress against strategy: asset quality

ProvisionsQ3-2010 Q3-2012 Change10.02 3.41 -66.0%

Unsecured retail/ domestic loans

5.8% 1.4%

` in bnStrengthening asset quality

Net NPA ratio 2.19% 0.70%Provisioningcoverage 51.2% 78.9%


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Focus on derisking portfolioz Reduction in investments in bonds/notes of financial

institutions from about US$ 2.2 bn at September 30, 2009to about US$ 228 mn at December 31, 2011zNo exposure to peripheral Europe in investment portfolio

ICICI Bank UK

z Reduction in credit derivative exposure (including offbalance sheet exposure) from US$ 1.12 bn at September30, 2009 to US$ 210 mn at December 31, 2011

zUnderlying comprises Indian corporate credits

Credit derivative portfolio


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Progress against strategy: efficiencyimprovements

Cost/income

OperatingexpensesFY2008 FY201179.72

50.0%

65.38

41.9%Cost/averageassets 2.2% 1.7%

` in bnSignificant improvement in operating efficiency

9M-201255.95

43.5%1.7%

Despite significant scale up in branch network from 1,262 atMarch 2008 to 2,552 at December 2011


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Key subsidiariesz Continued focus on building franchise to capitalise on

long-term opportunityzHealthy profitability in life insurance business

Domestic subsidiaries

z Consolidation strategy in view of regulatory approachzOngoing dialogue on future plan

Overseas banking subsidiaries


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Resulting in improvement in profitability

StandaloneRoE

ConsolidatedRoEStandalone

RoA

FY2009 FY2011

0.98% 1.34%

7.7% 9.6%

7.8% 11.6%

9M-2012

1.43%

10.5%

13.3%


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Well-placed to meet short-term challenges

z Volatility in global marketsz Slowdown in domestic macroeconomic activityz Issues relating to project execution

Key challenges

z Substantially reduced exposure to internationalmarkets

z Careful project selection in infrastructure sectorz Retail portfolio mainly comprises secured loans

ICICI Banks position


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Well capacitised for future growth

Build up ofbranchnetwork

z Scale up to 2,552 branches at December31, 2011z Largest branch network among privatesector banks

Strongcapital base

z CAR of 18.9% with Tier 1 ratio of 13.1%at December 31, 2011

Diversifiedbusinesslines

z Presence across all segments of financialservices


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Focus in FY2013

Depositfranchisez Maintain and enhance traction in retaildeposit growthz Leverage branch network for productivity

Profitabilityz Net interest margin improvementz Diversified fee income streamsz Improvement in operating cost ratiosz Continued control over credit costs

Loan growthz Focus on domestic market, includingretail lending

z Substantial loan maturities in overseasbranches; new lending to be calibrated todebt market conditions

improving return metrics


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Agenda




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Q3-2012: Performance highlights (1/2)z 20.3% increase in standalone profit after tax from `14.37 bn in Q3-2011 (October-December 2010) to `17.28 bn in Q3-2012 (October-December 2011)

z Net interest income increased by 17.3% year-on-year; net interest margin at 2.70%z 4.7% increase in fee income year-on-yearz Other income increased from ` 1.03 bn in Q3-2011 to

` 2.56 bn in Q3-2012, driven by first dividend fromlife insurance subsidiaryz 26.7% reduction in provisions


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z Advances increased by 19.1% year-on-year to `2,461.57 billion at December 31, 2011z CASA ratio at 43.6% at December 31, 2011;average CASA ratio at 39.0% in Q3-2012z Net NPA ratio decreased to 0.70% at December 31,

2011 from 0.80% at September 30, 2011 (December31, 2010: 1.16%)

Q3-2012: Performance highlights (2/2)


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D o m e s t i cc o r p o r a t e2 6 . 4 %

O v e r s e a sb r a n c h e s2 8 . 3 % Ret a i lb u s i n e s s

g r o u p3 3 . 5 %

R u r a l7 . 1 %

S M E4 . 7 %

D o m e s t i cc o r p o r a t e

2 4 . 2 %

O v e r s e a sb r a n c h e s2 8 . 6 % Ret a i lb u s i n e s s

g r o u p3 5 . 0 %

R u r a l7 . 5 %

S M E4 . 7 %

Composition of total loan book

1. Retail business group includes builder loans anddealer funding

2. Including impact of exchange rate movement

September 30, 2011

Total loan book: ` 2,340 bn

December 31, 2011

Total loan book: ` 2,462 bn

11

22


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Vehicleloans26.9%

Home66.4%

Personalloans1.2%

Othersecured

2.5%

Creditcards3.0%

Vehicleloans25.3%

Home67.3%

Personalloans1.5%

Othersecured

2.8%

Creditcards3.1%

Composition of retail loan book

1. September 30, 2011 :Vehicle loans includes auto loans9.2%, commercial business 16.0%

2. December 31, 2011 :Vehicle loans includes auto loans9.7%, commercial business 17.1%

September 30, 2011

Total retail loan book: ` 819 bn Total retail loan book: ` 824 bn

December 31, 2011

21


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Asset quality and provisioning

z Gross retail NPLs at ` 61.70 bn and net retail NPLs at ` 8.32bn at December 31, 2011z Provisioning coverage ratio of 78.9% at December 31, 2011computed in accordance with RBI guidelinesz Net restructured loans of ` 30.70 bn at December 31, 2011z Outstanding general provision on standard assets: ` 14.80 bnat December 31, 2011

(` billion)

0.80%22.3678.71

101.07September

30, 2011

1.16%28.7373.57

102.30December

31, 2010

0.70%20.8277.3898.20

December

31, 2011

Net NPA ratioNet NPAsLess: Cumulative provisionsGross NPAs


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Key ratios

10.51.50.4.20.4.6eturn on networth213.34.23.71.65.2311.6eturn on average networth1,2(consolidated)

1.75.74.77.66.75.70ost to average assets244.2

41.140.42.59481

43.31.31

9M-2011

42.1

44.440.22.61509

51.91.41

Q2-2012

1.43.57.47.34eturn on average assets2

43.63.64.25.1ASA ratio

42.140.12.64481

49.5

Q3-2011

41.537.02.70529

59.6

Q3-2012

43.538.72.63529

52.7

9M-2012

41.2ee to income41.92.64478

45.3

FY2011

Book value (`)

Cost to incomeNet interest margin2

Weighted avg EPS (`)2

(Percent)

1. Based on quarterly average networth2. Annualised for all interim periods3. Includes surplus of ` 3.84 bn for 9M-2011 on non-participating policyholders funds of ICICI Life;

accounted on quarterly basis for subsequent quarters


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Thank you


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Unconsolidated financials


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Profit & loss statement

13.4%129.0346.0442.46115.1440.61156.65Total income

14.7%72.7526.8723.5467.4223.4390.48Operating profit

-9.1%.33.10.12.68.11.79ease depreciation

-1.70)0.65)0.80)0.19).212.15)Treasury income

1.0754.88

4.6549.7952.7476.29

9M-

2012

0.4016.67

1.0316.2517.4923.12Q3-

2011

1.1245.92

3.9846.2850.0765.07

9M-

2011

0.3718.70

2.5617.0118.9227.12Q3-

2012

1.5763.81

4.4464.1966.4890.17FY

2011

0.3618.44

1.2017.0017.4025.06Q2-

2012

-7.5%12.2%

-4.7%8.2%

17.3%Q3-o-Q3

growth

DMA expensesOperating expenses

- Other income- Fee incomeNon-interest incomeNII

(` billion)


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Profit & loss statement

20.3%45.6317.2815.0336.9914.3751.51Profit after tax

40.1%5.98.18.321.40.416.10ax24.9%61.6123.4620.3548.3918.7867.61Profit before tax

14.7%72.7526.8723.5467.4223.4390.48Operating profit

22.87

FY

2011

4.65

Q3-

2011

19.03

9M-

2011

3.41

Q3-

2012

11.14

9M-

2012

-26.7%.19rovisions

Q2-

2012

Q3-o-Q3

growth

(` billion)


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Balance sheet: Assets

19.5%72.0062.6643.92RIDF1 and related

15.3%69.3860.7367.11SLR investments

-24.5324.5322.00- Equity investment insubsidiaries

3,928.97

210.412,066.92

1,337.03314.61

December

31, 2010

12.0%,497.91,476.85nvestments

4,407.25

229.092,339.52

361.79September

30, 2011

4,592.93

239.992,461.57

393.46December

31, 2011

16.9%

14.1%19.1%

25.1%Y-o-Y

growth

Total assets2

Fixed & other assetsAdvances2

Cash & bank balances

(` billion)

z Investment in security receipts of asset reconstruction companies was ` 23.86 bn atDecember 31, 2011

z Credit derivative exposure (including off balance sheet exposure) decreased from US$413 mn at Sep 30, 2011 to US$ 210 mn at Dec 31, 2011 due to contractual maturitiesz Underlying comprises of Indian corporate credits

1. Rural Infrastructure Development Fund

2. Including impact of exchange rate movement


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Equity investment in subsidiaries

13.483.480.96CICI Lombard General Insurance

124.53

0.140.050.611.871.583.00

11.12

23.2533.5035.93

September

30, 2011

122.00

0.140.050.611.871.583.00

11.12

23.2533.5035.93

December

31, 2010

11.12CICI Home Finance

23.25CICI Bank UK

0.61CICI AMC

33.50CICI Bank Canada

3.00CICI Bank Eurasia LLC1.58CICI Securities Primary Dealership

0.14thers124.53

0.05

1.87

35.93December

31, 2011

Total

ICICI Venture Funds Mgmt

ICICI Securities Limited

ICICI Prudential Life Insurance

(` billion)


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Balance sheet: Liabilities

13.8%34.9801.4945.77Savings26.6%00.3929.9716.23Current

3,928.97

143.941,053.27

2,177.47542.78

11.51554.29

December

31, 2010

4,407.25

157.071,213.24

2,450.92574.50

11.52586.02

September

30, 2011

4,592.93

154.471,222.81

2,605.89598.23

11.53609.76

December

31, 2011

16.9%

7.3%16.1%

19.7%10.2%

-10.0%

Y-o-Y

growth

Borrowings1,2

Total liabilities2

Other liabilities

Deposits- Reserves- Equity capital

Net worth

(` billion)

z Credit/deposit ratio of 71.1% on the domestic balancesheet at December 31, 2011

1. Borrowings include preference shares amounting to ` 3.50 bn2. Including impact of exchange rate movement


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Composition of borrowings

1,053.27

528.6215.14

543.76175.97333.54509.51

December

31, 2010

670.7169.54verseas2200.2294.40Other borrowings351.8849.30Capital instruments1

1,222.81

652.7118.00

552.10December

31, 2011

1,213.24

652.9416.60

543.70September

30, 2011

Total borrowings2

- Other borrowings- Capital instruments

Domestic

z Capital instruments constitute 63.7% of domestic borrowings

1. Includes preference share capital ` 3.50 bn2. Including impact of exchange rate movement

(` billion)


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Capital adequacy (Basel II)

959.4965.6163.39Off balance sheet2,888.64,803.94,536.26On balance sheet

3,669.55214.50482.26696.76` bn

September 30,

2011

5.85%13.14%18.99%

%

5.75%13.13%18.88%

%

3,848.13221.03505.32726.35` bn

December 31,

2011

3,299.65206.56452.63659.19` bn

December 31,

2010

6.26%13.72%19.98%

%

Risk weighted assets- Tier II- Tier I

Total Capital

Basel II


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Overseas subsidiaries


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L o a n s &a d v a n c e s5 8 . 8 %

A s s e t b a c k e ds e c u r i t i e s

1 . 8 %

O t h e r a s s e t s &in v e s t m e n t s

6 . 5 %

I n d i a l i n k e din v e s t m e n t s

4 . 0 %

C a s h & l i q u i ds e c u r i t i e s

2 4 . 1 %

B o n d s / n o t e s o ff i n a n c i a l

i n s t i t u t io n s4 . 8 %

L o a n s &a d v a n c e s5 8 . 0 %

A s s e t b a c k e ds e c u r i t i e s

1 . 8 %

Other asse ts &i n v e s t m e n t s

7 . 0 %

I n d i a l i n k e di n v e s t m e n t s

3 . 9 %

C a s h & l i q u i ds e c u r i t i e s

2 3 . 7 %

B o n d s /n o t e s o ff i n a n c i a l

i n s t i t u t i o n s5 . 6 %

35

ICICI Bank UK asset profile

1. Includes cash & advances to banks, T Bills and CDs2. Includes India-linked credit derivatives of US$ 14 mn at December 31, 2011(US$ 14 mn at September 30, 2011)3. Includes securities re-classified to loans & advances

Total assets: USD 5.1 bn

September 30, 2011

12

3

Total assets: USD 4.8 bn

December 31, 2011

1

2

3

2


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ICICI Bank UK liability profile

Total liabilities: USD 5.1 bn

September 30, 2011

z Profit after tax of US$ 7.7 mn in Q3-2012 compared to US$ 10.9 mn in Q3-2011z Capital adequacy ratio at 29.3%z Proportion of retail term deposits in total deposits

at 69% at December 31, 2011

Total liabilities: USD 4.8 bn

December 31, 2011

D e m a n dd e p o s i t s

1 6 . 4 %

S y n d i c a t e dl o a n s &

i n t e r b a n kb o r r o w i n g s

6 . 2 %

O t he rl i a b i l i t i e s

5 . 9 %

T e r m d e p o s i ts4 2 . 6 %

N e t w o r th1 3 . 3 %

L o n gte r m d e b t

1 5 . 6 % D e m a n dd e p o s i t s1 5 . 6 %

S y n d i c a t e dl o a n s &

i n t e r b a n kb o r r o w i n g s

6 . 5 %

O t h erl i a b i l i t i e s

7 . 0 %

T e r m d e p o s i ts4 0 . 6 %

N e t w o r th1 4 . 6 %

L o n gte r m d e b t

1 5 . 7 %


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Cash & liquidsecurities

10.0%

Insuredmortgage

25.9%

Other assets &investments

10.0%

Asset backedsecurities

1.4%

India linkedinvestments

0.8%

Loans tocustomers

51.9%

37

ICICI Bank Canada asset profile

1. Includes cash & advances to banks and governmentsecurities2. Includes India-linked credit derivatives of CAD 15 million atDecember 31, 2011 (CAD 32 million at September 30, 2011)3. Based on IFRS, securitised portfolio of CAD 921 million andCAD 1,137 million considered as part of Insured mortgageportfolio at September 30, 2011 and December 31, 2011respectively

Total assets: CAD 5.1 bn

2

1

Total assets: CAD 5.3 bn

September 30, 2011

3

December 31, 2011

1

2

3Cash & liquidsecurities12.2%Insuredmortgage29.7%

Other assets &investments9.6%Asset backedsecurities

1.2%

India linkedinvestments0.4%

Loans tocustomers46.8%


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Borrowings19.6%

Net worth19.1%

Demanddeposits14.2%

Otherliabilit ies

3.4%

Term deposits43.7%

38

ICICI Bank Canada liability profile

Total liabilities: CAD 5.3 bnz Profit after tax of CAD 6.6 mn in Q3-2012 compared to CAD 10.7 mn inQ3-2011z Capital adequacy ratio at 31.6%

September 30, 2011

1. As per IFRS, proceeds of CAD 926 million and CAD 1,141 millionfrom sale of securitised portfolio considered as part ofborrowings at September 30, 2011 and December 31, 2011respectively

Total liabilities: CAD 5.1 bn

December 31, 2011

1 1Borrowings23.0%

Net worth18.8%

Demanddeposits

16.2%

Otherliabilit ies

1.6%

Term deposits40.4%


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Loans tocorporates &

banks40.9%

Retail loans16.5%

Cash & cashequivalents38.2%

Promissorynotes1.5% Corporatebonds

2.2%

Other assets &investments

0.7%

L o a n s t oc o r p o r a t e s &

b a n k s3 8 . 4 %

R e t a i l lo a n s1 8 . 6 %

C a s h & c a s he q u i v a l e n t s3 5 . 1 %

P r o m i s s o r yn o t e s4 . 0 % C o r p o r a t eb o n d s

2 . 2 %

O t h e r a s s e t s &i n v e s t m e n t s

1 . 7 %

39

ICICI Bank Eurasia asset profile

Total assets: USD 272 mn

1. Includes cash & call placements with banks,balances with central bank and nostro balances

z Total borrowings of USD 170 mn at December 31, 2011z Capital adequacy of 24.8% at December 31, 2011z Net profit of USD 0.9 mn in Q3-2012

September 30, 2011

1

Total assets: USD 283 mn

December 31, 2011

1


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Domestic subsidiaries


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ICICI Home Finance

Total assets: ` 76.50 bnz Profit after tax of ` 670 mn in Q3-2012 compared to ` 497 mn in Q3-2011z Capital adequacy ratio of 26.5% at December 31, 2011z Net NPA ratio: 1.3%z At December 31, 2011: Networth ` 14.02 bn; Deposits ` 9.05 bn andBorrowings ` 50.06 bn

September 30, 2011

Total assets: ` 73.13 bn

December 31, 2011

Loans

95.5%

Investments and other

assets

4.5%

Loans

96.1%

Investments and other

assets

3.9%


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ICICI Life

21.4%632.223.67

16.0%1.388.60

32.0420.0711.97Q3-2012Q3-2011 FY2011New business received premium 16.35 78.62

Renewal premium 24.21 100.19Total premium 40.56 178.81Annualised premium equivalent (APE) 5.71 39.75New Business Profit (NBP) 1.00 7.13NBP margin 17.6% 17.9%Statutory profit/(loss) 6.141 8.08Assets Under Management 663.34 681.50Expense ratio2 17.6% 17.3%

(` billion)

1. Includes surplus of ` 5.20 billion for 9M-2011 on non-participating policyholders funds;accounted on quarterly basis for subsequent quarters2. Expense ratio: All expenses (including commission)/ (Total premium 90% of Single Premium)3. Source: IRDA

z Profit after tax of ` 10.56 billion for 9M-2012 compared to ` 5.13for 9M-2011z Market share based on retail weighted received premium was6.3%3 for April-December 2011


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ICICI General

1. Excluding remittances from third party motor pool (TPMP) and includingpremium on reinsurance accepted2. As per IRDA order dated March 12, 2011, all general insurance companieswere required to provide for TPMP losses at a provisional loss ratio of 153%(from FY2008 to FY2011) compared to earlier loss ratios of 122-127%. Theresults for FY2011 included an impact of ` 2.72 bn on account of the above.3. IRDA vide its order dated January 3, 2012 has enhanced the ultimate lossratios (ULR) of the Pool to 159.0%-213.0% for the above years. The ULR forFY2012 is awaited. IRDA has clarified that the effect of the above is to beconsidered as at the end of March 2012. The General Insurance Council hassought relaxations from IRDA, in the manner in which the liability has to bedetermined and treated in the books of accounts. Based on the ULRsspecified, the additional liability reserve to be provided for is estimated at `6.27 bn as at the end of March 2012, which would impact the profit & lossaccount of ICICI General in the future.4. Source: IRDA

1.0113.56

Q3-2012

(0.80)20.73AT44.080.41ross premium1

FY2011Q3-2011(` billion)

z Market share based on gross weighted premium was 9.6%3for April-December 2011


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Other subsidiaries

0.070.380.040.35

Q3-2011

0.220.530.490.18

Q3-2012

0.72CICI Prudential Asset Management

1.13CICI Securities Ltd

0.740.53

FY2011Profit after tax

ICICI VentureICICI Securities Primary Dealership

z 6.6% increase in consolidated profit after tax from ` 20.391bn in Q3-2011 to ` 21.74 bn in Q3-2012

z Consolidated return on average net worth for 9M-2012 at13.3% compared to 11.6% in 9M-2011z Consolidated return on average net worth for Q3-2012 at14.2%

(` billion)

1. Includes surplus of ` 3.84 bn for 9M-2011 on non-participating policyholders funds of ICICI Life;accounted on quarterly basis for subsequent quarters

2012 02 IIFL Investor Presentation

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