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Strictly confidential
Q1FY20-June 2019
Investor Presentation
This presentation has been prepared by The Lakshmi Vilas Bank Limited (the “Bank”) solely for information purposes without regard to any specific
objectives, financial situations or informational needs of any particular person. This presentation should not be construed as legal, tax, investment or
other advice. This presentation is may not be copied, distributed or disseminated, directly or indirectly, in any manner. Furthermore, no person is
authorized to give any information or make any representation which is not contained in, or is inconsistent with, this presentation. Any such extraneous
or inconsistent information or representation, if given or made, should not be relied upon as having been authorized by or on behalf of the Bank. This
presentation contains statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or
current expectations of the Bank or its directors and officers with respect to the results of operations and financial condition of the Bank. These
statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” or other words of similar meaning. Such
forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those
specified in such forward-looking statements as a result of various factors and assumptions. The risks and uncertainties relating to these statements
include, but are not limited to, (i) fluctuations in earnings, (ii) the Bank’s ability to manage growth, (iii) competition, (iv) government policies and
regulations, and (v) political, economic, legal and social conditions in India. The Bank does not undertake any obligation to revise or update any
forward-looking statement that may be made from time to time by or on behalf of the Bank. Given these risks, uncertainties and other factors, viewers
of this presentation are cautioned not to place undue reliance on these forward-looking statements. The information contained in this presentation is
only current as of its date and has not been independently verified. The Bank may alter, modify or otherwise change in any manner the contents of this
presentation, without obligation to notify any person of such revision or changes. No representation, warranty, guarantee or undertaking, express or
implied, is or will be made as to, and no reliance should be placed on, the accuracy, completeness, correctness or fairness of the information,
estimates, projections and opinions contained in this presentation. None of the Bank or any of its affiliates, advisers, directors, officers, agents or
representatives accept any liability whatsoever for any loss howsoever arising from any information presented or contained in this presentation. Please
note that the past performance of the Bank is not, and should not be considered as, indicative of future results. This presentation does not constitute or
form part of and should not be construed as, directly or indirectly, any offer or invitation or inducement to sell or issue, or any solicitation of any offer to
purchase or subscribe for, any securities of the Bank by any person in any jurisdiction, including in India or the United States, nor shall it or any part of
it or the fact of its distribution form the basis of, or be relied on in connection with, any investment decision or any contract or commitment therefore.
This presentation is not a prospectus, a statement in lieu of a prospectus, an offering circular, an advertisement or an offer document under the
Companies Act, 2013, as amended, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as
amended, or any other applicable law in India.
Disclaimer
2
3
Business Highlights2
Merger with Indiabulls - Update6
Financials of FY 20194
Strategy3
Lakshmi Vilas Bank - Overview1
Table of Contents
4
Lakshmi Vilas Bank- Overview1
Lakshmi Vilas Bank- Overview
5
Overview
Deposit and Advances Evolution
Shareholding (as of 30th June 2019)
One of the oldest banks in the history of banking in India; instituted in 1926
Mainly caters to the South of India with 50 % concentration of business in Tamil Nadu
& Puduchery
Wide coverage and distribution network with presence in 18 states and 1 Union
Territory across India
Consistent growing bank book since FY13 ( Loan book 1.9x of FY19 wrt.. FY14)
Highly experienced management team with an average of 22-29 years of experience
Focus on CASA; Retail and MSME the cash cows of future; Corporate Adv. continues
to be 35% of book
Bank recently announced the amalgamation with Indiabulls Housing Finance, subject
to RBI and other regulatory and statutory approvals
Promoter & Promoter group
7.1%
Instn Holdings19.9%
Others73.0%
569
branches
4,845
employees19 states
incl. UT
1,047
ATMs
Over 20 lakh
customers
22.5 lakh
accounts
18,57321,964
25,431
30,55333,309
29,279 28,980
FY14 FY15 FY16 FY17 FY18 FY19 Jun-19
Deposits (INR cr)
12,88816,352
19,644
23,72925,768
21,956 20,556
FY14 FY15 FY16 FY17 FY18 FY19 Jun-19
Advances (INR cr)
Offering Diverse Range of Products and Services
6
Insurance Loans
Deposits
Mutual Fund
Distribution
Internet
Banking
Retail Banking
Group
Corporates
Banking
group
Agri, Commercial &
Development
Banking group
Strategic Business
Units
Caters to individuals, HUFs, trusts and
clubs
As Q1FY20, 10. % of Bank’s loans and
advances to retail banking customers
Retail Asset Centers in Chennai &
Bengaluru servicing local mrkts
Caters to MSMEs, emerging businesses
with revenues up to INR 75 crore
annually, and agricultural and allied rural
services businesses
As of 30th June 2019, 55% of Bank’s
loans and advances to MSME
/Rural//Commercial banking customers
Caters to business with revenues above
INR 75 crore annually
As of 30st June 2019, 35% of Bank’s
loans and advances to Corporate
banking customers
Retail Banking Group
Agri, Commercial & Development
Banking group
Corporates Banking group
Guided by Experienced Board of Directors
7
7
Shri G Sudhakara Gupta
Non-Independent and Non-Executive Director
With Bank since 2017
Former Director at XS Real Properties Private Limited
Shri B K Manjunath
Non-Executive Chairman and Independent Director
With Bank since 2017
Practicing Chartered Accountant
Dr Y N Lakshminarayana Murthy
Independent and non – executive Director
With Bank since 2016
Ph.D. holder in Soil Science and Agricultural Chemistry
Smt Anuradha Pradeep
Non-Independent and Non-Executive Director
With Bank Since 2017
Independent Legal practitioner by profession practicing in the High
Court of Karnataka
Smt. Supriya Prakash Sen
Independent and Non-Executive director
Joined Bank in Q1 FY2020
BFSI expert & Director in ASEAN Financial Net work in Singapore
Shri H S Upendra Kamath
Independent and non-executive Director
With Bank since 2018
Former Director at Canara Bank, Chairman and Managing Director
at Vijaya Bank, Former MD and CEO at Tamilnad Mercantile Bank
Shri N Saiprasad
Non-Independent and Non-Executive Director
With Bank; rejoined in 2019
Managing Partner in M/s Venkateswara Exports, Karur
Shri Rajnish Kumar
RBI nominee Director
General Manager at RBI
Shri Suvendu Pati
RBI nominee Director
General Manager at RBI
Shri Parthasarathi Mukherjee
Managing Director and Chief Executive Officer
With Bank since 2016
Former Group Executive at Axis Bank
Awards
8
NATIONAL PAYMENTS CORPORATION OF INDIA Felicitates LAKSHMI VILAS BANK for FASTEST CTS IMPLEMENTATION in CHENNAI
NATIONAL PAYMENTS EXCELLENCE AWARDS 2014 – Winner (Scheduled Banks – Small Bank Category) for Excellent Performance in National Automated Clearing House - 3rd December 2014
CIO100 SPECIAL AWARDS 2015 - Winner - CLOUD CONQUEROR HONOREE 2015 -IDG award for Cloud Implementation
DQLIVE BUSINESS EXCELLENCE AWARDS2015 for EXCELLENCE IN THE IMPLEMENTATION & USE OF TECHNOLOGY FOR BUSINESS BENEFITS
IDRBT BANKING TECHNOLOGY EXCELLENCE AWARDS 2014-15 - BEST BANK AWARD (AMONG SMALL BANKS) for MANAGING IT INFRASTRUCTURE AMONG SMALL BANKS
MEDAL OF HONOUR for SUCCESSFUL DIGITAL ODYSSEY 2017
BEST CIO CLUB IT AWARD 2017 FINALISTBSE – CIO KLUB OF THE YEAR 2017for Banking Category
IDC INSIGHTS AWARDS 2018 forEXCELLENCE IN OMNI EXPERIENCE
9
Business Highlights2
Strong South India Focused Franchise with Pan India Reach
10
Branch Count (569)
North includes Madhya Pradesh, Uttar Pradesh, Uttarakhand, Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Rajasthan, Chandigarh and Delhi;
East includes Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Bihar, Chhattisgarh, Jharkhand, Odisha, Sikkim, West Bengal and Andaman & Nicobar Islands;
West includes Goa, Gujarat and Maharashtra; South includes Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Puducherry and Telangana
295
9
1
2
13
24
52
60
13
4
2
2
4
5
4
5
69
1
4
South87%
West6%
North4%
East3%
Metro29%
Rural19%
Semi Urban30%
Urban22%
Branch distribution (March, 2019) Distribution Mix
11%
8%
28%
9%
44% 569
branches
< 1 yr 1-2 yrs 2-5 yrs > 10 yrs5-10 yrs
Coverage Mar ’14 Jun’19
Mar’14 vs
Mar’19
Change
States 16 19 3
Districts 108 147 39
Branches 362 569 207
Total staff 3,292 4,845 1553
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
Architectural Initiatives to Streamline the Transaction Lifecycle, from
Sourcing to Processing to Servicing
1111
CRM Tool Automated loan origination Enhanced banking platform
100% completion achieved on CRM
Implementation
Key features:
Salesforce Automation and
Leads Management
Campaign Management and
Customer Segmentation to
ensure mass reachout
Analyse leads and take informed
decisions, such as automated
responses to FAQs, automated
escalation, and fixing service
levels based on segmentation
Improve cross-selling and up-
selling capability
Drive CASA to targeted levels
Improve account balances and
income due to better partner sales
management and reduced churn
of customers
Fully automated loan origination
system to ensure uniform processing
through standardized enforcement of
credit terms and conditions; integration
with credit rating modules, and
automatic reporting
Tabs to feet on street for instant
notifications to Corporate office for
commencement of processing
Spreadsheet based upload, followed
by automatic application of defined
business rules and eligibility norms
Reduced time for data entry
Low error rate
Lower TAT
Improvement in
employee productivity
Standardized borrower evaluation
Improved document handling
App with convenient options such
as Favourites, Quickpay, utility
payments, and quick recharges etc.
App launched across iOS, Android,
and Windows platforms
Digital penetration supported by
customer education, marketing
and expansion in branch network
Supreme 2 factor authentication
banking channels across internet
and mobile
ServicingSourcing Processing
Better customer satisfaction
More cross sell opportunities
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
Digital Transformation
New Digital platform for Hosting Internet Banking
12
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
Get information on your
upcoming payments
Get a consolidated
look of your account
Keep tab on your bills and
pay instantly through your
account. Its that easy!!!!
Track your recent activities
and your spends
Get instant notification on
offers and transactions,
Track the status of your
service requests and Track
all your payments
Find your total Net
worth and plan your
targets accordingly
Keep track of all your
account in one place.
Your current and
savings account, Term
Deposit account,
Recurring deposit
account, Loan and
Finance and Credit
card. All the facilities at
one place!!
Digital Transformation
Multifunction Mobile App with Intuitive Functioning
13
Login with PIN or
Internet Banking
ID
Information not
specific to an account is available
without login
Login page Landing page Fund transfer page
Smart memorization of previous
payment choices exercised –
Leading to one-step payment
One step instant payee
addition
Bill paymentsRecharge
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
Corporate35%
Rural18%
MSME20%
Retail10%
Commercial17%
Segmental overview of advances
14
Corporate loans - Advances growth
11,242
7,4807,132
Q1FY19 Q4FY19 Q1FY20
MSME loans - Advances growth
4,490 4,741 4,083
Q1FY19 Q4FY19 Q2FY20
Retail loans - Advances growth
2,542 2,260 2,133
Q1FY19 Q4FY19 Q1FY20
4,343 3,990 3,731
Q1FY19 Q4FY19 Q1FY20
Rural loans - Advances growth
3,511 3,485 3,478
Q1FY19 Q4FY19 Q1FY20
Commercial loans - Advances growth
Average ticket size (INR lakhs)
3954 3596 3208
1.71 1.52 1.43
29.52 35.14 32.86
4.87 4.86 4.6470.84 76.33 75.24
INR
lakhs
INR
lakhs
INR
lakhs
INR
lakhs
INR
lakhs
INR cr
INR cr
INR cr
INR crINR cr
Data provided is on Gross basis
Digital Transformation
Bank aims to be a front runner in digital offerings
15
Transaction Value in Digital Channels (INR cr) Share of digital and non-digital volume of transactions
Mobile Transactions (INR cr)
109 359 423 500.462,271 1,920
5,184 5748.87
50 918 2,524
6292.88
30 55 116 155.09
6,317
14,006
21,683
34398.62
2016 2017 2018 2019
POS ATM Mobile Ecom Internet
3.9
5.3 5.1
6.5
1.01.2
2.3
3.5
8,777
17,258
29,930
47,096
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2016 2017 2018 2019
Non digital volume (cr) Digital volume (cr) Digital value (INRcr)
• RTGS & NEFT transactions1 (INR cr)
646
844
1,095
1,350
1,526
1,741
2,039 2,112
Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20
65,523
45,218
56,012 53,972
56,635
45,268
Q1 FY19 Q2 FY18 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20
Source: Company information, RBI
Note: 1 Denotes total transaction value for outward and inward NEFT transactions and consumer inward and outward spends on RTGS
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
Capital Position
16
0.1% 9.0%
16.6%
74.4%
BPLR Base Rate Fixed Rate MCLR
[INR 20,566 Cr]
Q1FY20
Capital Ratios have been impacted by increased provisioning for the non performing book
Rebalancing RWA’s has been taken up by bank and capital raising continues
Bank anticipates to better its rating of book qoq
Bank has undertaken repricing of its book in the last 2 quarters; yields of book has move
up.
74% of the Book is linked to its MCLR with majority to its 1 year rate
*Bank raised a pref. transaction for Tier I capital of INR 188.2 Crores in July, 2019. With the
same, the Tier I capital shall stand at 5.56%
1027766
398 377
14251143
17957 17166
5.72%
4.46%
2.00% 2.00%
7.72%
6.46%
1%
4%
7%
10%
300
Q4FY19 Q1FY20
Tier-I Capital Tier-II Capital Total Capital
Total Risk Weighted Assets Tier I CRAR (%) Tier II CRAR(%)
CRAR(%)
Capital Position ( Basel III) | RWA | Tier 1 & II Ratios Distribution of Book Across Pricing Mechanism
Capital Conservation Bank has Demonstrated Ability to Raise Capital
Date Amount (INR cr) Type
FY2014 78.4 Tier II
FY2015 406 Rights Issue
FY2016 140 Tier II
FY2017 167.5 QIP
FY2018 780.6 Rights Issue
FY2018 69.7 Tier II
FY2019 459.6 QIP Placement
FY2020* 188.2 Pref. Allotment to IHFL
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
*Resolution undertaken; process underway
*5.56%
On Track to Build a “Retail & SME Focused” Bank
Build a strong CASA franchise
17
Steady Deposit Base
Consistent growth in CASA deposits
% of total depositsINRcr
4,573 4,925 5,093 5,171 5,265 5,552 5,617
1,9092,090 1,870 1,719 1,771 1,963 2,241
6,482 7,015 6,964 6,890 7,036
7,515 7,859
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Savings Current
21.1% 21.1% 25.7%21.4% 22.2%1,520,600 1,769,965
1,808,358 17,33,791
89,647 1,09,765 1,70,108 1,72,249
FY17 FY18 FY19 Q1FY20
Savings Current
Increasing Number of CASA accounts
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
22,56723,898 21,651 21,048
5,844 7,015 7,515 7,8592,142 2,396
1137430,553 33,309 29,279 28,981
FY17 FY18 FY19 Q1FY20
Bank term CASA Retail term
Stagnated Cost of Deposits
7.30%
6.75% 6.75% 6.74%
FY17 FY18 FY19 Q1FY20
22.8%
27.1%
On Track to Build a “Retail & SME Focused” Bank
Building a Strong CASA franchise (cont’d.)
18
High interest rates of 5% and 6% to drive CASA growth in
select categories
Capitalize existing customers to acquire HNI accounts and
build client base to cross sell
Savings account
Add-on services on current accounts like cash pickup, cash
management and door step banking
Enlarging sales force with adequate training to offer trade and
foreign exchange services
Current account
Print, OOH, FM, television and mobile van campaigns
Online tests for product education for staff; coupled with
incentives to market CASA products
Promotions
CASA proportion in branches aged <5 years
2018
261 branches2019
[186 branches]
2017
213 branches
Product differentiation and aggressive marketing New branches showing positive results on CASA accumulation
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
CASA32.0%
Term68.0%
CASA26.7%
Term73.3%
CASA18.7%
Term81.3%
Strategy for increasing CASA
Potential to increase CASA as vintage branches turn profitable
Focus on Business Correspondent model to increase CASA
Shift on measuring CASA on a CDAB (Cumulative Daily Average Balance) basis
than on a period end basis
CDAB of CASA saw an increase of 546 bps YoY and 371 bps QoQ
Focus on onboarding customers through Digital channels with Insta opening
optionality
Branches to be redefined as sales outlets with defined CASA targets with a specific
focus on HNI & NRI customers
Product innovation and extension of existing products
Expansion of “Crown” franchise to include NRE, NRO accounts
Attractive interest rates for savings & flexi current account facilities
Aggressive advertising on both digital & offline platforms
Interest Income
19
Net Interest Income and Non Interest Income (INR Cr) Diversified loans and Advances…
Yield on Advances, Cost of Funds and Net Interest Margin …Across Sectors
Corporate35%
Rural18%
MSME20%
Retail10%
Commercial17%
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
INR [20,556] for
Q1FY20
INR [20,556] cr
Q1FY20
783 791
130 151 139 140
560
124
503
347
61 71 61 57
250
53
FY17 FY18 Q1'19 Q2'19 Q3'19 Q4'19 FY19 Jun-19
Net Interest Income Non-Interest Income
8.26%8.85% 9.17% 9.09% 9.09% 8.99%
5.82% 6.02% 5.87% 5.87% 5.86% 5.73%
1.34% 1.48% 1.74% 1.65% 1.73% 1.65%
Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20
Yield on Advances Cost of Funds Net Interest Margin
Infrastructure38%
Textiles27%
Basic Metal and Metal Products
20%
All Engineering8%
Other industries7%
Income Trend
Diverse Revenue Base
20
147 134 122 116
23.2
2016 2017 2018 2019 Jun-19
Fee income % of total income
15.5% 10.4% 10.7%
Insurance Tie ups with insurance behemoths for life, general, and health
insurance
MFs and PMS Investing opportunities customized for small amounts; developing
advisory app with manual intervention for sale of mutual fund products
Debit cards Multiple debit cards to suit customer’s needs
Forex travel cards High growth high margin exchange rate driven product, irrespective of
amounts remitted
Others Money transfer and pension schemes
Product Overview Partners
13Mutual Fund affiliations
14.3%
Multiple avenues to boost fee income
Fee income evolution (INR Cr)Other Income Breakdown (INR Cr)
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
23
6.0
0.1
4.5
0.6
19.0
Commission
Profit on Investments
Profit on sale of Asset
Exchange Profit
Bad Debts Recovery
Others13.1%
Prudent Management of Asset Quality
Adopting Clean-up of Corporate Loan Book…
21
Overview Close tracking of watch list through FY18 & 19 comes to an end
Increased provisioning to augment rising NPAs Corporate NPAs already identified in the book
2,500 2,250
1,725 1,560
400 200
0 0 0
Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 H1FY19 Q3FY19 Q4FY19 Q1FY20
Announced watch list of INR2,500cr in March 2017
Accelerated NPA recognition in 4Q18 under new RBI guidelines
Watch list reduced from INR2,500cr as of March 2017 to nil as of March,
2019. *Additional INR 310.84 crores slipped on account of 2 corporate
accounts (incremental)
The residual stress in corporate book is now contained; additional slippage
shall be overcome by net recovery
MSME and Rural Book has incremental stress reported; shall stagnate
hereafter
386 636 286 1,608
% of total gross NPAs
INRcr633 572
403 573
871 967
1,982 2,068
2,420 2,366 2,413
Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 H1FY19 Q3FY19 Q4FY19 Q1FY20
INRcr
67.7% 73.5% 69.7% 71.9%68.1%65.2%63.0%
170 165 217 305
11691335
15791,785
212
Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 H1FY19 Q3FY19 Q4FY19 Q1FY20
2.67%
INRcr
1.76%
5.66%
4.27%
9.98%
5.66%
13.95%
7.64%
Gross NPA % 12.31%
6.88%
5.50%
4.33%
3.78%
2.84%
Gross slippages of total book (INRcr)
Net NPA %
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
59.5% 46.7% 55.1% 55.9%55.4%46.7%51.3%Provision
coverage ratio
(%)
207
70.4%15.30%
7.49%
62.08%
17.3%
8.3%
63.08%
310*
67.9%
Prudent Management of Asset Quality
… has led to a better quality loan mix
22
Bank continues to focus on capital preservation
Most of the slippages arose from the lower rated book; higher run off’s of higher rated paper attributed to lessening of weightage in high rated buckets
28.9% 29.4%
43.0%
32.0% 28.1%
29.6% 28.2%
30.4%
28.4% 32.0%
4.8% 6.1%
7.1%
7.0% 8.6%
17.3% 13.6%
14.8% 32.6% 31.3%
19.5% 22.6%
4.7% 0.0% 0.0%
FY16 FY17 FY18 FY19 Jun-19
LVB 1/2/3 LVB 4/5 LVB 6/7/8/9 Need not be rated Unrated
17.8%
42.9%
55.6%
40.1% 36.4%
14.3%
13.4%
17.7%
17.4% 16.2% 27.5%
21.8%
14.8%
28.8% 28.5%
40.4%
21.9% 11.9% 13.7%
18.9%
FY16 FY17 FY18 FY19 Jun-19
A & above BBB < BBB Unrated
Distribution by Internal ratings Distribution by external ratings
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
Overview of NPAs (FY19)
23
NPA movement QoQ (INRcr) NPA overview
Industry Classification of GNPA on Q1 FY20
INRcr Jun-19 Mar-19 Dec-18 Sep-18 Mar-18 Dec-17
Gross NPA 3557 3,359 3,364 2,965 2,694 1427
Net NPA 1539 1,506 1,716 1,560 1,458 1060
Gross NPA % 17.30% 15.30% 13.95% 12.30% 10.00% 5.60%
Net NPA % 8.30% 7.49% 7.60% 6.90% 5.70% 4.20%
Provision Coverage
Ratio %63.08% 62.08% 55.9% 55.4% 55.1% 46.7%
Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Gross NPA 1427.01 2694.21 2804.72 2964.89 3364.28 3358.99 3556.58
Net NPA 1060.46 1457.89 1478.09 1560.08 1716.22 1506.29 1539.41
500
1000
1500
2000
2500
1%
1%
2%
1%
5%
11%
17%
Gems and Jwellery
Other Industries
All Engineering
Bevarages
Textiles
Basic Metal and Metal Products
Infrastructure
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
3,359 3,359 3,364 3,364 3,557
311 113
1
Opening GNPA Gross Slippage Recoveries/upgradation
Tech write off Closing GNPA /Opening GNPA
MSME Commercial
SMA – Segmental breakdown
Continuous Improvement on account of stringent monitoring
24
Rural Retail Total portfolio
34%
57%
30%41%
57%
43%
21%
56%
59%35%
23% 22%14%
0%8%
887 905
224446
843
1002003004005006007008009001000110012001300140015001600170018001900200021002200230024002500260027002800290030003100
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20SMA2 SMA1 SMA0 Total
Corporate
70%
63%
24%19%
17%
12%
13%
25%
53%
35%
18%25%
50%
28%
48%
1,208
1,486
735
104
563
50
300
550
800
1,050
1,300
1,550
1,800
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20SMA2 SMA1 SMA0 Total
57%
79%
35%
60%37%
21%
10%
36%
20%
27%
22%11%
29%20%
36%
277 274
182
28
113
10
110
210
310
410
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
SMA2 SMA1 SMA0 Total
51% 58%
24%
0%
29%
22%20%
25%
28%
26% 22%
51%
100%
42%250 257
136
5
93
0
50
100
150
200
250
300
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20SMA2 SMA1 SMA0 Total
*CC/OD interest debited on 31.01.19 has not been considered for SMA0
SMA0 data for Q3FY18 is not reported. Bank has reported SMA0 post Feb 2018 circular of RBI
SMA nos. for Q1FY20 are unaudited and may vary subject to the same
Bank
37%36%
47% 45%
46%
23% 27%
22%
0%
20%
40% 37%31%
55%
34%
338 321
372
11
323
10
110
210
310
410
510
610
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20SMA2 SMA1 SMA0 Total
53% 59%
31%37%
41%
24%17%
30%
55%
32%
23% 24%
39%
8%
27%
2,958
3,245
1,649
595
1,935
101102103104105106107108109101,0101,1101,2101,3101,4101,5101,6101,7101,8101,9102,0102,1102,2102,3102,4102,5102,6102,7102,8102,9103,0103,1103,2103,3103,4103,5103,6103,7103,8103,9104,0104,1104,2104,3104,4104,5104,6104,7104,8104,9105,0105,1105,2105,3105,4105,5105,6105,7105,8105,910
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20SMA2 SMA1 SMA0 Total
Credit Risk Management Framework
Bank has enhanced its way of assessing business
25
Industry exposures tracked and dynamically set up
Achieve granularity of exposures
Cap exposures to below-BBB rated exposures
Generate 2/3rd of corporate advances incrementally from A and above
borrowers
Tighten rating standards and target higher RAROC on exposures
Preparing for ECL under Ind AS regime
Limiting exposures largely to A and above rated borrowers
Setting credit risk policy
Complete review and bringing in IMaCS Rating System
Use of external inputs from rating agencies, credit information bureaus
Focus on increasing MSME exposures
Retail Asset rollout through dedicated Credit teams
Improvement in sanction and disbursement TAT
Tighter management of portfolio/market risk/ ALM
Tight management of capital
Engaging with external providers of information on borrower universe
and taking up special informational reports
Build work flow based sanction processes drawing external inputs
Transitioning into credit operations through special branches
Mandating cleaning of historic data and separate credit operations and
monitoring
Standardizing documentation and improving customer experience
Ongoing steps to manage credit risk
Steps taken to manage credit risk
Pan India
reach
Digital
Transformation
Capital
PositionDeposits
Income
Trends
Asset
Quality
Strong asset liability management framework ( as on 30th June, 2019_Provisional)
26
Established ALM framework
ALM policy
Stress Testing Policy
Counterparty Risk Management Policy
Market Risk Management Policy
Reporting
ALCO
Managing ALM using system driven environment
Review and Monitoring of Funding Plans on an ongoing basis
Creation of Balance Sheet Management Group to manage CFU
Bank maintains surplus SLR for liquidity purposes
Integral part of ALM is building up Retail Term deposits
ALM group runs MCLR computation
Hedging policy for Balance Sheet Management in place
Derivatives capabilities being built in upgraded Treasury system
Counterparty Limits managed out of ALM
100676 732
377 582 585
1607
4440
11769
977
7134
158 0 0 0 0 0 0 0351 178 140285
771 777 1014
1744 1658
323
1038
7643
1179
2251
84 157 143 78 108
7881096
23142591
481
1638
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1 D
ay
2-7
Days
8-1
4 D
ays
15-3
0 D
ays
31 d
ays &
upto
2m
onth
s
Mo
re than 2
mo
nth
s &
upto
3 m
onth
s
3-6
Mo
nth
s
6 M
onth
s-1
Year
1-3
Yea
rs
3-5
Yea
rs
Over
5 Y
ears
INR
cr
Deposits Borrowings Advances Investments
Audited statement
27
Strategy3
Strategic Initiatives for Business Structuring
28
Separate retail lending group established
Focus on profitable gold loans, business credit and home loans
Project TRANSME: Transformation of the MSME business model
Relationship management team: One-stop shop for all financial needs of customers
Focus on high-rated clients
Conscious de-focusing on the wholesale business segment
Loan Book:
Retail & MSME
Focus
Branch expansion; Potential to increase CASA with new branches turning profitable
Branches being redefined as sales outlets with defined CASA targets
Specific focus on HNI & NRI customers
Product innovation and extension of existing products
Attractive interest rates for savings account & flexi current account facilities to drive CASA growth
Aggressive advertising on both digital & offline platforms
Liability:
Increasing
CASA
Transaction Banking vertical launched to boost fee income
Focus on trade finance ( TReDS enabled for MSME), bill discounting, guarantees, LCs, cash management, government banking
Tie-up with third parties for insurance, mutual funds, credit cards, money transfer, forex travel cards
Fee Income
Initiatives across the transaction lifecycle - CRM tool, automated loan origination
Multifunction mobile app with intuitive functioning for a state-of-the-art customer interface
Implementation of large-scale technological reforms
Upgraded core banking suite, develop business intelligence unit, enhance digital banking & omni-channel presence, multi function e-
lounge, Oracle Financial product suite
Technology
Overhaul of risk management framework to enhance credit risk management systems & processes
Separate Recovery Vertical & empanelment of recovery agencies to reduce TAT of recovery
Demarcate operations between business setups & improve asset quality in the future
Conduct of high value credit portfolio under constant monitoring guided by technology
Asset Quality:
Revamped Risk
Management
Framework
1
2
3
4
5
Transformation Work Streams : Strategy for Next 3 Years
29
People Transformation
Organization design, recruitment,
training and performance management
Relationship Management structure
Branding & Communication
Active brand endorsement
Extensive analyst coverage
Proactive communication with
customers
Technology Transformation
Applications and Hardware
implementation
OFSAA Launch
Core Banking upgrade and
Digital Banking full suite launch
Service Delivery, Processes, Policies
and Manuals
Design and documentation of operating
principles
Risk, Compliance, Finance and
Treasury & Capital Markets
Implementation of support and control
functions
Robust early warning signal system
implementation
Regulatory & Business
restructuring
Provisioning
NCLT Case(s) exits
Capital Raise
Business unit individual
assessment
Business Transformation
Omni-channel strategy | market capture
Full scale relationship management
implementation
Less focus on Treasury Income
Drive to enhance cross-sell
30
Financials4
31
Key Performance Highlights - FY 20192
32
Key Performance Highlights – Q1 FY 20
As of 30th June 2019 Gross Loan book stands at INR 20556 cr
(-)21.32 % Y-o-Y growth in loan book; (-) 6.37% Q-o-Q growth in loan book
MRC book : 8.52 % Y-o-Y reduction ; and Corporate Book reduced by 36.56 % Y-o-Y
Loan book
Total net interest income at INR 123.57 cr; down 5.09 % Y-o-Y.
Operating loss at INR 25.55 cr;
Net Loss( Before Tax Provision) at INR 237.25 cr; up 53.29 % Y-o-Y.
Profitability
Tier 1 CRAR at 4.46 %
Tier 2 CRAR at 2.00 %Capital position
Provision coverage ratio at 63.08 %
Gross NPA at 17.30 % vs Gross NPA at 15.30 % in Q4’19
Net NPA at 8.30 % vs Net NPA at 7.49 % in Q4’19
Asset Quality
As of 30th June 2019, total deposit stands at INR 28980 Cr
CASA ratio at 27.12 %
Deposits
Operational
Total customer base around 2.19 million
569 branches :– of which 162 in Metros, 125 in Urban, 173 in Semi Urban and 109 in rural Centers in 18 states and 1
union territory
Key Performance Highlights – Q1 FY20
33
Net Interest
Income
Total Income
Operating Profit
Net Profit
Other Income
INR 123.57 cr
INR 53.22cr
INR 176.79 cr
INR (25.55) cr
INR (237.25 ) cr
Y-o-Y Growth
(5.09)%
(12.06) %
(7.30) %
(478.13)%
(91.53) %
(11.86)%
(7.41)%
(10.57) %
(20.62) %
10.28%
Q-o-Q Growth
Key Performance Highlights – Balance Sheet
34
Loans & Advances
Deposits
CASA
Borrowings
Investments + Cash
Balances
INR 20,556 cr
INR 10,889 cr
INR 28,980 cr
INR 7,859 cr
INR 826 cr
Y-o-Y Growth Q-o-Q Growth
(21.32) %
(4.83) %
(10.76)%
12.85 %
(72.35)%
(6.37) %
(7.98)%
(1.02) %
4.58 %
(10.32)%
Key Performance Highlights – Key Ratios
35
Net interest Margin
Net NPA
Tier 1 CRAR
CASA Ratio
Gross NPA
1.65%
17.30%
8.30%
4.46%
INR 7,859 cr
(27.12%)
Y-o-Y Growth Q-o-Q Growth
12.85% 4.58 %
17 bps 8 bps
200 bps657 bps
81 bps234 bps
126 bps318 bps
Income Statement
36
INRcr FY17 FY18 FY19 Q1 FY20Y-o-Y
ChangeQ4’19
Q-o-Q
Change
Interest earned 2,847 3,042 2840 623.95 (-)14.17% 682 (-)8.55%
Interest expended 2,064 2,251 2280 500.38 (-)16.15% 542 (-)7.69%
Net interest income 783 791 560 123.57 (-)5.09% 140 (-)11.86%
Other income 503 347 250 53.22 (-)12.06% 57 (-)7.41%
Total income 1,285 1,137 810 176.79 (-)7.30% 197 (-)10.57%
Total Operating expenses 651 782 822 202.34 9.99% 219 (-)7.54%
Employees cost 335 392 401 102.73 5.70% 111 (-)7.80%
Other operating expenses 317 390 421 99.62 14.80% 107 (-)7.28%
PPOP 634 355 (12) (25.55) (-)478.13% (21) 20.62%
Provisions and Contingencies 254 1,306 1276 211.70 31.06% 479 (-)55.78%
Profit before tax 380 (951) (1288) (237.25) 53.30% (500) (-)52.55%
Tax expenses 124 (366) (394) - (236)
Net income 256 (585) (894) (237.25) 91.54% (264) (-)10.28%
Earnings Per Share
Basic 14.07 (28.29) (34.66) (7.42) (10.02)
Diluted 13.95 (28.11) (34.59) (7.41) (10.00)
Balance Sheet
37
INRcr FY17 FY18 FY19 Q1 FY20 Y-o-Y Change
Capital 191 256 320320
24.94%
Reserves & Surplus 1,945 2,072 15731,336
(-)30.77%
Deposits 30,553 33,309 29,27928,980
(-)10.76%
Borrowings 1,773 4,013 921826
(-)72.35%
Other Liabilities &. Provisions 782 779 953976
28.25%
Total liabilities and equity 35,245 40,429 33,046 32,438
Cash & balances with RBI 1,455 1,698 1654 1,558 (-)8.82%
Balances with banks, money at call & short
notice169 317 515 649 123.71%
Investments 8,652 10,768 8,430 9,331 (-)4.13%
Advances 23,729 25,768 20,103 18,539 (-)25.25%
Fixed Assets 359 402 470 509 17.68%
Other Assets 881 1,476 1874 1,851 28.31%
Total assets 35,245 40,429 33,046 32,438
38
Merger with Indiabulls5
Transaction Details
39
Transaction overview
Swap ratio
Employees
Proposed Management
and shareholding
structure
Shareholder value
creation
Lakshmi Vilas Bank announced on 5th April 2019 and 3rd May 2019 the amalgamation of Indiabulls Housing Finance (IBH) &
Indiabulls Commercial Credit Limited (ICCL), a 100% subsidiary of IHFL into and with Lakshmi Vilas Bank Limited (LVB) subject to
approvals including from RBI and other regulatory and statutory authorities
Share swap ratio: 7,143 equity shares of face value of Rs. 10 each held in LVB for every 1,000 equity shares of face value of Rs. 2
held in IBH has been agreed upon by the respective Board of Directors
All the staff and employees of LVB on the Effective Date(1) shall become the staff and employees of amalgamated entity, without
any break or interruption in services and on same terms and conditions on which they are engaged by LVB as on the Effective Date
Mr. Sameer Gehlaut to be proposed as Vice Chairman of the amalgamated entity
Mr. Parthasarathi Mukherjee and Mr. Gagan Banga to be proposed as Joint Managing Director of amalgamated entity
Mr. Ajit Mittal to be proposed as Executive Director
Mr. K.R. Pradeep to be proposed as non-independent, non-executive Director
Existing LVB shareholders to hold c.[7.5%] of the combined entity
Proposed swap ratio indicates a substantial premium on market price as on the date of announcement for shareholders of LVB
Status update
Approval from CCI for the proposed amalgamation received on June 20, 2019
LVB and IBH have submitted an application to RBI seeking an approval of the proposed scheme of merger
Combined Entity to be Amongst the Top 10 Private Banks by Size
and Profitability
40
As on December 31, 2018 Amalgamated Entity
Net Worth (Rs. Crs) 19,472
Loan Book (Rs. Crs) 1,23,393
Operating Profit (Rs. Crs) 4,630
Net Profit (Rs. Crs)2,455
Capital Adequacy Ratio 20.6%
Tier 1 ratio 14.4%
Return on Assets (Annualized) 2.0%
Return on Equity (Annualized) 19.2%
Gross NPA 3.5%
Net NPA 2.0%
Strong Capital and Financial Position
• Well Capitalized combined entity with CAR at over 20%, well in excess of regulatory
requirement of 10.875%
• Healthy Credit Profile with Net NPAs down to c.2.0%
• Improvement in ROAs/ROEs from -2%/-41% to 2%/19% due to better profitability of IBH
• Negates need for additional capitalization in the next three years
Opportunity for growth and diversification
• Ability to diversify loan book from largely wholesale to retail
• Opportunity to cross-sell banking products given large retail customer base, as well as
geographical spread of IBH
• Cost efficiency through adoption of IBH’s technology
Improved market perception and access to key shareholders of IBH
• Successful track record of capital raising
• Healthy Credit profile with long term rating of AAA from all leading rating agencies in
India, including CRISIL
• Strong Liability profile backed by business relationships with 622 institutions which
includes 21 PSU banks, 26 Private and Foreign Banks and 575 Mutual Funds,
Provident Funds, Pension Funds, Insurance Companies and Corporates
(1) As on 31 December 2018
(2) All financial metrics based on pro-forma analysis as on 31 December 2019
Appendix
Movement in Gross NPAs
42
640
1278
2694
1022
1894
(172) (212))
(478)
(0)
Opening GNPA Gross Slippage Recov./upgrad./wo Tech write off Closing GNPA /Opening GNPA
Gross Slippage Recov./upgrad./wo Tech write off Closing GNPA /Opening GNPA
March 2017 September 2017 March 2018
2694 2965
780 3359633 (300)
Opening GNPA Gross Slippage Recov./upgrad./wo Tech write off Closing GNPA /Opening GNPA
Gross Slippage Recov./upgrad./wo Tech write off Closing GNPA /Opening GNPA
(362)
86
March 2019
September 2018 March 2019
Movement of GNPA (INRcr)
3,359
-
3,557 311
113
Opening GNPA Gross Slippage Recov./upgrad./wo Tech write off Closing GNPA / Opening GNPA
June 2019
Overview of Restructured Standard Assets
43
965
76 40 39
2017 2018 2019 Jun-19
Restructure Standardd-FB
Restructured assets (INR in Crore)
Sectoral GNPA classification across industry
44
Leather and Leather products
Chemicals and Chemical Products (Dyes, Paints, etc.)
Vehicles, Vehicle Parts and Transport Equipments
Paper and Paper Products
Mining and Quarrying
Cement and Cement Products
Rubber, Plastic and their Products
Wood and Wood Products
Food Processing
Glass & Glassware
Other Industries
Gems and Jwellery
Beverages (excluding Tea & Coffee) and Tobacco
All Engineering
Textiles
Basic Metal and Metal Products
Infrastructure
0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00
Q1FY20 Q4FY19
Sectoral GNPA classification across Non-industry
45
Advances against Fixed Deposits (incl. FCNR(B), etc.)
Computer Software
Consumer Durables
Vehicle /Auto Loans
Professional Services
NBFCs
Tourism, Hotel and Restaurants
Housing Loans (incl. priority sector Housing)
Educational Loans
Commercial Real Estate
Other Retail Loans
Transport Operators
Retail Trade
Other Services
Agriculture and Allied Activities
Wholesale Trade (other than Food Procurement)
Other Non-food Credit, if any, please specify
0 100 200 300 400 500 600 700 800 900 1000
Q1FY20 Q4FY19
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