#1IDFC FIRST Bank IDFCFIRSTBANK/SD/SE/147/2018-19 The Manager-Listing Department National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex, Bandra (East) Mumbai 400 051. Tel No.: 022- 2659 8237/38 NSE - Symbol - IDFCFIRSTB February 05, 2019 The Manager-Listing Department BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai 400 001. Tel No.: 022-2272 2039/37/3121 BSE Scrip Code: 539437 IDFC FIRST Bank Limited - Investor Presentation on Q3FY19 - December 31, 2018 Dear Sir/Madam, Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed a copy of the presentation on the financials for the quarter and nine months ended December 31, 2018. This is for your information and records. Thanking you, Yours faithfully, For IDFC FIRST Bank Limited (Formerly known as IDFC Bank Limited) Satish Gaikwad Company Secretary Encl.: as mentioned above IDFC FIRST Bank Lid IDFC FIRST Bank Limited (formerly IDFC Bank Limited) Naman Chambers, C 32, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051 Tel: +91 22 7132 5500 Fax: +91 22 2654 0354 Registered Office: KRM Towers, 7th Floor, No. 1, Harrington Road, Chetpet, Chennai 600031. Tel: +91 44 4564 4000 Fax: +91 44 4564 4022 CIN: L65110TN2014PLC097792 [email protected] www.idfcfirstbank.com#2IDFC FIRST Bank | आई डी एफ सी फर्स्ट बैंक BKC BRANCH Q3 FY19 CORPORATE PRESENTATION IDFC FIRST Bank ווי 11#3Disclaimer This presentation has been prepared by and is the sole responsibility of IDFC First Bank (together with its subsidiaries, referred to as the "Company"). By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation does not constitute or form part of any offer or invitation or inducement to sell or issue, or any solicitation of any offer or recommendation to purchase or subscribe for, any securities of the Company, 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 contractor commitment therefore. In particular, this presentation is not intended to be a prospectus or offer document under the applicable laws of any jurisdiction, including India. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. There is no obligation to update, modify or amend this communication or to otherwise notify the recipient if information, opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Certain statements contained in this presentation that are not statements of historical fact constitute “forward-looking statements.” You can generally identify forward-looking statements by terminology such as "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "intend", "may", "objective", "goal", "plan", "potential", "project", "pursue", "shall", "should", "will", "would", or other words or phrases of similar import. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. Important factors that could cause actual results, performance or achievements to differ materially include, among others: (a) material changes in the regulations governing our businesses; (b) the Company's inability to comply with the capital adequacy norms prescribed by the RBI; (c) decrease in the value of the Company's collateral or delays in enforcing the Company's collateral upon default by borrowers on their obligations to the Company; (d) the Company's inability to control the level of NPAs in the Company's portfolio effectively; (e) certain failures, including internal or external fraud, operational errors, systems malfunctions, or cyber security incidents; (f) volatility in interest rates and other market conditions; and(g) any adverse changes to the Indian economy. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. The Company may alter, modify, regroup figures wherever necessary or otherwise change in any manner the content of this presentation, without obligation to notify any person of such change or changes. IDFC FIRST 2 Bank#4Table of Contents ווי SECTION 1: BACKGROUND OF MERGER 13 SECTION 2: PATH AHEAD 20 20 SECTION 3: PERFORMANCE HIGHLIGHTS 23 SECTION 4: DISTRIBUTION 25 SECTION 5: ASSETS 31 SECTION 6: LIABILITIES 34 SECTION 7: FINANCIALS 37 37 SECTION 8: DIRCETORS & SHAREHOLDERS IDFC FIRST Bank#5SECTION 1: BACKGROUND TO THE MERGER IDFC FIRST Bank#6The Founding of IDFC First Bank SECTION 1: BACKGROUND IDFC First Bank Ltd is founded by the merger of IDFC Bank, a scheduled commercial bank and Capital First Limited, a systematically important Non-Banking Financial Services Company. The merger was first announced on January 13, 2018, and formally consummated on December 18, 2018 5 IDFC FIRST Bank#7Background of IDFC Bank IDFC Bank Limited was formed as a part of demerger from its parent IDFC Limited on October 21, 2014. SECTION 1: BACKGROUND 1997-2014 • 2014-15 2015-16 • • • IDFC Limited, was set up in 1997 as a public private platform to finance infrastructure focusing primarily on project finance and mobilization of capital for private sector infrastructure development. The growth of the Company has been driven by the substantial investment requirements of the infrastructure sector in India combined with the growth in the Indian economy over the last several years. The Company's ability to tap global as well as Indian financial resources made it the acknowledged experts in infrastructure finance. In April 2014, the Reserve Bank of India (RBI) granted an in-principle approval to IDFC Limited to set up a new bank in the private sector, as per the RBI Guidelines for Licensing of New Banks in the Private Sector. Subsequently, a Scheme of Arrangement was filed with the Madras High Court for Demerger of Financial Undertaking (the lending business of IDFC) to IDFC Bank. All the requisite approvals were obtained and the Madras High Court approved this Demerger by its Order dated June 25, 2015 On October 19, 2015, the Honorable Prime Minister, Mr. Narendra Modi inaugurated the opening of operations for the bank. The bank launched 23 branches across India as a start of the operation. The bank launched corporate internet banking portal, and interoperable Aadhar-enabled Micro ATMs. . The shares of IDFC Bank Limited got listed in the exchanges in November 2015 at Rs. 70.5 a share. 2016-17 . IDFC Bank acquires Grama Vidiyal Micro Finance, one of the leading Micro Finance players in Southern India to boost its rural portfolio. IDFC Bank Launches IDFC Aadhaar Pay, India's first Aadhaar-linked cashless merchant solution, following successful pilots across 16 states. • • • 2017-18 • . IDFC Bank opens first branch in the North East, launches services in Meghalaya, Shillong. The CASA deposits of the bank reached Rs. 2,094 Cr and the funded assets stood at Rs 66,567 Cr as of 31 March 2017. IDFC Bank debuts in LinkedIn's Top Companies 2017 list, the only bank to be featured in the list. Shriram Group and IDFC Bank explored merger possibility. In October, 2017 the merger discussions were aborted IDFC Bank launches its 100th branch at Honnali, in Davanagere district of Karnataka. Total number of branches at the end of the financial year FY18 was 127 across 18 states across India. On January 13, 2018, Capital First and IDFC Bank announced merger subject to regulatory approval. The CASA deposits of the bank reached Rs. 5,710 Cr and the funded assets stood at Rs 70,099 Cr as of 31 March 2018. 6 IDFC FIRST Bank#8Rationale for the merger (IDFC Bank Perspective) • SECTION 1: BACKGROUND After the inception in 2015, the Bank created a robust framework and created all the necessary building blocks which are required for growing a large banking operation. • The developed a strong and robust risk management systems. • The bank also developed strong IT capabilities and infrastructure for scaling up the banking operations. . The Bank designed efficient treasury management system for its own proprietary trading, as well as for managing client operations. • The Bank created the necessary framework for distribution and opened 206 branches ( Dec 31 2018) across India including 92 branches in rural India. • The Bank launched innovative technology led products for its liability customers, e.g. quick and efficient CASA account opening process, Micro-ATMs, instant online opening of Term-Deposits. As part of its stated strategy to retailise its loan book the bank was looking for a merger with a retail finance institution with adequate scale, profitability and specialised skills. 7 IDFC FIRST Bank#9IDFC Bank - Financial Parameters Loan Assets (Rs Cr) SECTION 1: BACKGROUND 73,055 70,248 75,337 13% Networth (Rs Cr) 15,257 14,776 14,678 CASA Deposits (Rs Cr) 6,426 5,710 11% 4% 53,903 1% 70% 69% 72% 13,633 2,094 90% 445 26% 20% 15% 9% Mar-16 Mar-17 Mar-18 Mar-16 Mar-17 Mar-18 Sep-18 Sep-18 Mar-16 Mar-17 Mar-18 Sep-18 Others Wholesale Retail Profit After Tax (Rs Cr) Net Interest Margin (%) ROE % 7.2% 6.0% 2.1% 2.0% 1.9% 1.7% 5.7% 407 FY16 1,020 859 FY17 (167)* FY18 H1FY19 FY16 FY17 (2.2%)* FY18 H1FY19 *The bank took one-time provisions relating to stressed infrastructure loans. Without such one-time charge off, the PAT for H1 FY19 would be Rs. 81 Cr FY16 FY17 FY18 H1FY19 8 IDFC FIRST Bank#10Background of Capital First SECTION 1: BACKGROUND The Company was first listed on Stock Exchanges in January 2008. Between 2010 to 2012, Mr Vaidyanathan acquired a stake in the company and executed a Management Buyout (MBO) of the Company with equity backing of Rs. 810 Crore from Warburg Pincus, and created a new brand and entity called Capital First. As part of the MBO, the company raised fresh equity, reconstituted a new Board and got new shareholders, including open offer to public. A brief history of the company is as follows: 2008-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 The Company was largely in the business of Wholesale Financing, PE, Asset Management, Foreign Exchange and Retail Equity Broking. The total AUM of the Company was Rs. 935 crores of which Retail AUM was 10%, Rs. 94 crores. Mr. V Vaidyanathan joined the Company and prepared the ground for executing a Management Buyout by taking significant corporate actions including divesting Forex JV to JV partner, merging a subsidiary NBFC with itself, by winding down other non core businesses and launching retail businesses in the Company. The Company launched technology driven financial businesses for the consumer and SME segments. The Retail loan book crossed Rs. 700 crores by March 2011. The Company presented this as proof of concept to many global private equity players for Buyout. The company continued to present the concept to prospective PE players throughout the year. The Company undertook additional corporate actions and further wound down non-core business subsidiaries and launched more retail financing businesses. The concept, model and volume of retail financing businesses gained traction and reached to Rs. 3,660 crores, 44% of the overall AUM. Mr. Vaidyanathan secured equity backing of Rs. 810 billion from Warburg Pincus for an MBO and thus Capital First was founded. As part of the transaction an open offer was launched, the Company raised Rs. 100 Cr of fresh equity capital, a new Board was reconstituted and a new brand and entity "Capital First" was created. The Company further raised Rs. 178 Cr as fresh equity at Rs. 153/ share. It acquired HFC license from NHB and launched housing finance business under its wholly owned subsidiary. Company's Assets under Management reached Rs. ~12,000 Cr and the number of customers financed since inception crossed 10 lacs. The Company raised Rs. 300 Crores through QIP at Rs. 390 per share from marquee foreign and domestic investors. The Company received recognition as "Business Today - India's most Valuable Companies 2015" and "Dun & Bradstreet - India's Company scrip was included in S&P BSE 500 Index. top 500 Companies, 2015". The Company's Assets under Management reached ~ Rs. 20,000 Cr and the number of customers financed since inception crossed 4.0 million. The Company raised fresh equity capital of Rs. 340 Cr from GIC, Singapore through preferential allotment @ Rs. 712 per share. The Company received recognition as "CNBC Asia - Innovative Company of the Year, IBLA, 2017", "Economic Times - 500 India's Future Ready Companies 2016" and "Fortune India's Next 500 Companies, 2016". The Company's Asset Under Management touch ~Rs. 27,000 Cr and number of customers financed crossed 6.0 million. The Company received "Best BFSI Brand Award 2018" at The Economic Times Best BFSI Brand Awards 2018 and "Financial Services Company of the Year 2018" at VC Circle Awards 2018. In January 2018, the Company announced the merger with IDFC Bank subject to regulatory approvals. The Company received awards for Most Outstanding Corporate transformation from CFI Awards and Mr. Vaidyanathan was awarded Most Inspirational Management Buyout 2018 for founding Capital First 9 IDFC FIRST Bank#1116,041 Capital First - Financial Parameters Assets Under Management (Rs Cr) Retail Wholesale CAGR 29% 32,622 26,997 SECTION 1: BACKGROUND Net Worth (Rs Cr) NIM (%) 2,928 19,824 CAGR 22% 2,618 2,304 1,704 91% 1,574 11,975 9,679 94% 9.60% 9.02% 8.01%* 7.63% 6.57% 5.35% 4.86% 1,172 7,510 961 93% 86% 84% 81% 74% 26% 19% 16% 14% 7% 9% Mar 13 Mar-14 Mar-15 Mar-16 Mar-17 illi Mar-18 Sep-18 Total Income (Rs Cr) CAGR 47% Mar 13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 FY13 FY14 FY15 FY16 FY17 FY18 H1 FY19 2,430 1,640 1,297 992 659 358 422 FY13 FY14 FY15 * FY16 FY17 FY18 H1 FY19 FY13 63 53 Profit After Tax (Rs Cr) CAGR 39% 114 FY14 FY15 166 FY16 239 327 ili ROE (%) 206 7.04% 4.93% 14.87% 13.31% 11.93% 10.14% 8.33% FY17 Not comparable with prior quarter as figures for Sep-18 are based on Ind AS, while prior periods were based on Indian GAAP FY18 H1 FY19 FY13 FY14 FY15 FY16 FY17 FY18 H1 FY19 10 IDFC FIRST Bank#12Rationale for the merger (Capital First Perspective) • • SECTION 1: BACKGROUND Since 2010, Capital First created a strong retail franchisee in niche areas with strong asset quality with the help of strong analytics and technology led underwriting framework. In 2010, the GNPA and NNPA of the Company was at 5.28% and 3.73% respectively. But with the new management and strategy to focus on the retail loans, the GNPA and NNPA was reduced and maintained at a sustainable level of ~1.8% and ~1.00% respectively continuously over the last 6 years. The asset quality stayed stable even during Period of rising interest rates 2011-14, demonetisation 2016, and GST implementation (2017) • The loan assets grew at a CAGR of 29% and Profits grew by CAGR of 39% FY13 to FY18. • • The ROE turned positive over the years, and consistently grew to ~15% from a loss position in FY08 (Rs. 30 cr) and FY09 (Rs. 32 cr) The Company cumulatively financed more than 60 lacs customers by FY18 through a retail distribution network which served customers across more than 220 locations in India However, the Company was interested in a Banking Platform for low and sustainable cost of funds. 11 IDFC FIRST Bank#13Pro-Forma Financials of the two institutions the last quarter (Q2 FY 19 ) before the merger. Loan Asset (on-Book) % of Retail Loan Assets CAPITAL FIRST LIMITED IDFC BANK LIMITED Rs. 27,351 Cr Rs. 75,337 89% Total Borrowing + Deposits Rs. 24,550 Cr CASA 13% Rs. 101,232 SECTION 1: BACKGROUND IDFC FIRST BANK LIMITED Rs. 102,688 33% Rs. 125,782 Rs. 6,426 Cr Rs. 6,426 Cr Net worth Rs. 2,928 Cr Rs. 14,776 Cr Rs. 17,704Cr NII Rs. 615 Cr Rs. 451 Cr Rs. 1,066 Cr Total Income Rs. 695 Cr Rs. 571 Cr Rs. 1,266 Cr Opex Rs. 327 Cr Rs. 552 Cr Rs. 879 Cr Provisions Rs. 210 Cr Rs. 601Cr Rs. 811 Cr PAT Rs. 105 Cr Rs. -370 Cr* Rs.-265 Cr *The bank took one-time provisions relating to stressed infrastructure loans. Without such one-time charge off, the PAT for H1 FY19 would be Rs. 81 Cr. 12 IDFC FIRST Bank#14SECTION 2: PATH AHEAD IDFC FIRST Bank#15Disclaimer SECTION 2: PATH AHEAD Certain statements contained in this presentation that are not statements of historical fact constitute "forward- looking statements." You can generally identify forward-looking statements by terminology such as "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "intend", "may", "objective", "goal", "plan", "potential", "project", "pursue", "shall", "should", "will", "would", or other words or phrases of similar import. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. (for Full text of disclaimer please refer to page 2) 14 IDFC FIRST Bank#16IDFC FIRST BANK - Path Ahead IDFC IDFC BANK • • • Strong Systems and Processes Over 200 bank branches Efficient Treasury Management System Strong presence in corporate and infrastructure financing, payment systems, Launched retail lending businesses successfully + • Over 34 lacs customers D SECTION 2: PATH AHEAD CAPITAL FIRST F IDFC FIRST Bank • Strong Retail Franchise and in niche segments with strong credit skills • Presence in more than 220 locations across India supported by 102 branches • Consistently increasing Profitability with high ROE High Asset quality • Customer base of over seven million and 4 million live customers • Strong Loan assets of more than Rs. ~104000 Cr 34% of loans in retail segment Margins increased from 1.7% standalone to 3.3% post merger • Diversified asset profile • Strong platform to grow retail deposits and CASA A large retail customer base of more than 70 lacs live customers including 30 lacs rural customers 15 IDFC FIRST Bank#171 Asset Strategy SECTION 2: PATH AHEAD • Growth of Assets: • The Bank plans to grow the retail asset book from Rs. 36,236 Cr to over Rs. 100,000 Cr in the next 5-6 years • • The Bank plans to reduce the loans to infrastructure segments (Rs. 22,710 as of 31 December 2018) as they mature. For the Non-Infra Corporate Loans, the bank will continue to grow the loan book, based on opportunities available in the marketplace. Diversification of Assets: The loan book of the bank needs to be well diversified across sectors and a large number of consumers. Currently the retail book contributes to 35% of the total funded assets. The Bank plans to increase the retail book composition to more than 70% in the next 5-6 years Gross Yield Expansion: As a result of the growth of the retail loan assets (at a relatively higher yield compared to the wholesale loans), the gross yield of the Bank's Loan Book is planned to increase from 9.2% (as per Q2-FY19 published financials, before the merger) to ~12% in the next 5-6 years. The bank will expand Housing loan portfolio as one of its important product lines. 16 IDFC FIRST Bank#182 Liability Strategy SECTION 2: PATH AHEAD • CASA Growth: • The key focus of the Bank would be to increase the CASA Ratio from 10.3% (Q3 FY 19) on a continuous basis year on year and strive to reach 30% CASA ratio with in the next 5-6 years, as well as set a trajectory to reach a CASA ratio of 40-50% there on. • Diversification of Liability: Diversification of Liabilities in favour of the retail deposit (including CASA and Retail Term Deposits) is essential for availing the low cost and sustainable funding source to fund the growth of the Bank. As a percentage of the total borrowings, the Retail Term Deposits and CASA is proposed to increase from 10.5% currently (Q3 FY 19), to over 50% in the next 5-6 years and set up a trajectory to reach 75% thereafter. • Branch Expansion: In order to grow Retail Deposits and CASA, the bank plans to set up 600-700 more bank branches in the next 5-6 years from the current branch count of 206. This would be suitably supported by the attractive product propositions and other associated services as well as cross selling opportunities. 17 IDFC FIRST Bank#193 SECTION 2: PATH AHEAD Profitability • Net Interest Margin: As the retail asset contribution moves towards 70% of the total fund assets, it is planned that the gross yield will continuously increase. Coupled with lower cost of funds (From improved CASA ratio), it is planned to expand NIM to about 5.5% in the next 5-6 years. • Cost to Income: The Bank plans to improve C:1 ratio to ~50-55% over the next 5-6 years, down from ~79% currently (Q3 FY 19) • ROA and ROE: With the improvement in the NIM and cost to income ratio, the bank aims to reach the following benchmarks in the next 5-6 years. ROA of 1.4%-1.6% • ROE of 13%-15% 18 IDFC FIRST Bank#20Summary SECTION 2: PATH AHEAD As a result of the strategic directions mentioned earlier, the Bank plans to reach the following goals in the next 5-6 years of operation - Funded Assets To reach Rs. 1,80,000 Cr % Retail Funded Assets Net Interest Margin % To reach 70% of the total funded assets To reach 5.5% Cost to Income To Reach 50-55% Ratio % RoA% To reach 1.4 - 1.6% ROE % To Reach 13 - 15% 19 IDFC FIRST Bank#21SECTION 3: PERFORMANCE HIGHLIGHTS IDFC FIRST Bank#22Snapshot of Key Parameters (As of 31 December 2018) Rs. 1,04,660 Cr Funded Assets 34.62% Retail Assets/Total Funded Assets Rs. 130,529 Cr Borrowing & Deposits Rs. 18,376 Cr 1.97%, 0.95% 206 Net Worth-Standalone GNPA, NNPA No. of Bank Branches شا SECTION 3: PERFORMANCE HIGHLIGHTS 10.37%, 4.92% CASA Ratio (as % of Total Deposit, as % of Total Borrowing & Deposits) 16.51% Capital Adequacy ratio % 21 IDFC FIRST Bank#23Snapshot of Financial Performance for the Quarter (For Q3-FY19) SECTION 3: PERFORMANCE HIGHLIGHTS • The Net Interest Income for the quarter ended on 31 December 2018 was Rs. 1,145 Cr • The Total Operating Income (net of Interest Cost) for the quarter ended on 31 December 2018 was Rs. 1,449 Cr. • The Net Interest Margin for the quarter ended on 31 December 2018 was at 3.27% . The Cost to Income ratio for the quarter ended on 31 December 2018 was at 78.75% • The Profit Before Tax (without considering the exceptional item) for the quarter ended on 31 December 2018 was Rs. 95 Cr . . Bank has accounted for merger in accordance with AS-14 accounting for amalgamation. All assets and liabilities of Capital First Limited and its subsidiaries have been recorded at fair value based on independent valuation report. Goodwill and other intangibles of Rs. 2600 Crs have been recognized. In view of the restrictions to declare dividend under section 15 of the banking regulation act, the bank has accelerated the amortization of Goodwill and other Intangibles which has been disclosed as an Exceptional Item in the profit and loss account. • The Book Value of the Share (Net worth considering as of 31 December 2018 and total number of shares adjusted for shares issued pursuant to merger on 5th January 2019) was at Rs. 38.43 per share 22 IDFC FIRST Bank#24SECTION 4: DISTRIBUTION IDFC FIRST Bank#25The Bank has been continuously expanding its reach SECTION 4: DISTRIBUTION 127 150 170 61 85 Dec-17 Mar-18 99 99 203 206 140 129 Jun-18 Sep-18 Dec-18 Bank Branches L ATMs 30 STATES & UTS 530 Districts 102 CFL Branches 354 IBL Branches 100 BC Branches 24 IDFC FIRST Bank#26SECTION 5: ASSETS IDFC FIRST Bank#27Gross Loan Assets breakdown SECTION 5: ASSETS Funded Assets (In INR Cr) Retail Funded Assets Rural Dec-17 Mar-18 Jun-18 Sep-18 Dec-18* 5,376 7,043 8,211 9,918 36,236 2,652 3,218 3,616 4,243 4,704 SME 1,173 1,794 2,151 2,772 13,574 Consumer 1,551 2,031 2,444 2,903 17,957 Wholesale Funded Assets 51,345 54,911 56,453 54,082 56,809 Corporates 22,024 27,039 28,861 30,447 34,098 ELC 5,102 6,829 7,174 7,960 7,886 LC 3,917 5,617 5,473 6,073 5,852 DFIG Others Infrastructure 4,533 4,668 6,484 6,330 10,645 8,470 9,925 9,730 10,085 9,715 29,268 26,828 26,550 23,635 22,710 PSL Inorganic 9,203 8,980 8,466 8,256 8,575 Stressed Equity and SRs 3,194 3,162 3,102 3,081 3,040 Total Funded Assets 69,065 73,052 75,190 75,337 1,04,660 Non-Funded Trade Contingencies (In INR Cr) Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Trade Related Non Funded Assets 27,257 27,903 26,201 25,624 26,300 Forward and Derivative Contracts 2,03,827 1,87,787 2,10,210 2,40,871 2,50,806 Total * Post merger with Capital First 2,31,085 2,15,690 2,36,411 2,66,495 2,77,106 26 IDFC FIRST Bank#28Retail Assets as a % of the total Funded Assets has improved substantially from 13% to 35% post the merger.. SECTION 5: ASSETS 1,04,660* 35% 75,190 75,337 73,052 69,065 11% 10% 13% 8% 74% 74% 74% 54% 72% 5% 13% 4% 12% 4% 11% 4% 3% 11% 8% Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Retail Funded Assets Wholesale Funded Assets Stressed Equity/ SRs Others * Post merger with Capital First 27 IDFC FIRST Bank#29Spreads have increased from 1.7% to 3.6% post the merger SECTION 5: ASSETS Spreads -Consolidated Yields Retail Wholesale Bank Corporate Banking Infrastructure PSL Buyout Stressed Assets Average Cost of Funds CASA + Retail TD Corporate Deposits Legacy Borrowings Q3 FY18 Q2 FY19 Q3 FY19 9.3% 9.4% 11.5% 16.9% 15.7% 16.6% 9.7% 9.2% 9.5% 8.9% 9.0% 9.5% 10.2% 9.4% 9.6% 6.9% 6.5% 6.4% 2.8% 3.8% 5.7%* 7.5% 7.6% 8.0% 5.8% 5.9% 6.3% 6.4% 7.2% 7.4% 8.8% 8.8% 8.9% 8.8% CFL Borrowings Spreads 1.9% 1.7% The numbers for Q3-FY19 is not comparable with numbers of earlier quarters *Excluding one off recovery from stressed case of Rs. 81 Crore. 3.6% 28 IDFC FIRST Bank#30Stressed Assets SECTION 5: ASSETS In INR Cr Stressed Assets Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 5,316 3,884 3,836 3,120 3,826 NPL 2,777 1,779 1,774 895 1,671 Others Loans 1,342 927 918 856 787 Stressed Equity 1,197 1,178 1,144 1,149 1,149 Stressed SRS (NPI) 220 219 Provisions 3,399 2,717 2,726 2,542 2,788 NPL 1,570 888 893 574 874 Others Loans 814 814 825 599 545 Stressed Equity 1,015 1,015 1,008 1,149 1,149 Stressed SRS (NPI) 220 219 PCR 63.9% 70.0% 71.1% 81.5% 72.9% Security Receipts 1,997 1,984 1,958 1,712 1,672 Provision on SRs 332 349 349 196 196 29 IDFC FIRST Bank#31Investments SECTION 5: ASSETS In INR Cr Dec-17 Mar-18 Jun-18 Sep-18 Dec-18* CRR SLR LCR / Others Bonds (Non Repoable) 2,798 3,124 3,089 3,081 3,510 15,243 16,334 16,483 16,806 17,946 1,828 1,941 2,998 3,165 6,213 5,866 5,438 4,020 3,569 3,203 Certificate of Deposit 249 Commercial Paper 638 524 24 24 25 Bonds & Debentures (ex Tax free) 2,609 2,046 1,367 930 579 Tax Free Bonds 2,619 2,619 2,629 2,615 2,599 HFT Trading Book (Repoable) 17,818 20,548 13,787 12,423 12,604 Central Govt Securities 13,264 17,349 10,279 7,670 6,967 State Govt Securities Treasury Bills (Less) MTM Provisions Net Investment Assets 1,904 3,171 1,970 1,139 1,154 2,650 28 1,538 3,614 4,483 122 25 104 146 1 43,431 47,358 40,273 38,899 43,475 * Post merger with Capital First 30 IDFC FIRST Bank#32SECTION 6: LIABILITIES IDFC FIRST Bank#33Borrowings and Deposits Legacy, Infra Bonds & CP 32% SECTION 6: LIABILITY In INR Cr Dec-17 Mar-18 Jun-18 Sep-18 Dec-18* Borrowings 36,373 36,483 34,671 37,844 57,403 Others Short CASA Term Legacy Long Term Bonds 23,636 21,405 18,909 18,632 16,385 5% 12% Term Deposits 25% Infra Bonds 10,434 10,434 10,434 10,434 10,434 Other Borrowings (erstwhile 2,303 4,644 5,328 8,778 30,584 CFL) CASA 4,254 5,710 6,083 6,426 6,421 Current Account 2,395 2,177 2,971 3,334 2,022 Saving Account 1,859 3,533 3,112 3,092 4,398 Term Deposits 23,257 22,826 26,888 29,943 33,182 Retail 3,737 4,107 4,970 6,453 7,605 Wholesale 19,520 18,719 21,918 23,490 25,577 Money Market 9% Certificate of Deposits 17% Certificate of Deposits 14,748 19,662 21,086 11,988 22,312 Borrowings + Deposits 78,632 84,681 88,728 86,201 1,19,317 As of 31 December 2018 Rs. 1,30,529 Cr Money Market Borrowings 18,132 20,804 12,921 15,031 11,212 Total Borrowings & Deposits 96,764 1,05,485 1,01,649 1,01,232 1,30,529 * Post merger with Capital First 32 IDFC FIRST Bank#34CASA and Retail Deposits 11,053 9,817 SECTION 6: LIABILITY 12,879 14,025 7,605 6,453 7,991 4,970 4,107 3,737 3,092 3,112 3,533 4,398 1,859 2,395 2,177 2,971 3,334 2,022 Dec-17 Mar-18 Jun-18 Sep-18 Current Accounts Saving Accounts Retail Term Deposits Dec-18 All figures are in INR Crores unless specified 33 F IDFC FIRST Bank#35SECTION 7: FINANCIAL STATEMENTS IDFC FIRST Bank#36Income Statement SECTION 7: FINANCIAL STATEMENTS In INR Cr Interest Income Interest Expenses Net Interest Income Fee & Other Income Trading Gains Q3 FY18 9M FY18 Q2 FY19 Q3 FY19* 9M FY19* 2,284 6,649 2,334 3,664 8,319 1,789 5,304 1,883 2,519 6,233 495 1,345 451 1,145 2,086 119 343 118 301 522 112 682 1 3 100 Total Income 726 2,370 571 1,449 2,709 Operating Expenses 411 1,163 552 1,142 2,140 HR 176 508 217 370 792 Non HR 235 655 335 772 1,348 Pre provisioning operating profit (PPOP) 315 1,207 19 308 569 Provision & Contingencies 109 (6) 601 213 848 Profit Before Tax & Exceptional Items 206 1,213 (583) 95 (279) Exceptional Items (2,599) (2,599) Profit Before Tax 206 1,213 (583) (2504) (2878) Tax 60 396 (213) (966) (1,152) Profit After Tax 146 817 (370) (1,538) (1,726) * The P&L for Q3-FY19 are not comparable with the previous quarters as the financials for Q3-FY13 and 9MFY19 are post merger with Capital First 35 IDFC FIRST Bank#37SECTION 7: FINANCIAL STATEMENTS Balance Sheet In INR Cr Shareholders' Funds Deposits Borrowings Other liabilities and provisions Total Liabilities Dec-17 Sep-18 Dec-18* 15,208 14,776 18,376 42,259 48,356 61,914 54,506 52,875 68,614 6,226 7,248 8,012 1,18,199 1,23,255 1,56,916 Cash and Bank Balances 2,055 2,409 1,636 Net Retail and Wholesale Assets 65,446 72,619 1,01,694 Statutory Investments 18,041 19,887 21,456 Trading Investments 25,389 19,012 22,018 Fixed and Other Assets 7,267 9,327 10,112 Total Assets 1,18,199 1,23,255 1,56,916 * Post merger with Capital First 36 IDFC FIRST Bank#38SECTION 8: DIRECTORS & SHAREHOLDERS IDFC FIRST Bank#39Board of Directors SECTION 8: BOARD & SHAREHOLDERS DR. RAJIV B. LALL - PART-TIME NON-EXECUTIVE CHAIRMAN Dr. Rajiv Lall is the Non-Executive Chairman of IDFC Bank. He was the Founder MD & CEO of IDFC Bank from October 1, 2015 till December 18, 2018. Previously, he was the Executive Chairman of IDFC Limited. A veteran economist for 30 years, Dr. Lall has been an active part of the finance and policy landscape, both in India and internationally. In his diverse career, he has also held leadership roles in global investment banks and multilateral agencies. MR. V. VAIDYANATHAN - MANAGING DIRECTOR & CEO Mr. V. Vaidyanathan founded Capital First Ltd by first acquiring an equity stake in an existing NBFC, and then executing a Management Buyout (MBO) by securing an equity backing of Rs. 810 crores in 2012 from PE Warburg Pincus. He was earlier the MD and CEO of ICICI Prudential Life Insurance Co (2009) and an Executive Director on the Board of ICICI Bank (2006) and Chairman of ICICI Home Finance Co. Ltd (2006). He started his career with Citibank India in 1990 & worked there till 2000, where he learnt the ropes in Consumer Banking. MS. ANINDITA SINHARAY - NON-EXECUTIVE NON INDEPENDENT DIRECTOR (REPRESENTING THE GOVT. OF INDIA) Ms. Anindita Sinharay is an Indian Statistical Service (2000) officer working as a Director in the Department of Financial Services, Ministry of Finance. She holds a post graduate degree in Statistics from the University of Calcutta. She has vast working experience of more than one decade in National Accounts Statistics in Central Statistics Office (CSO) and analysis of data of large scale sample surveys conducted by National Sample Survey Office (NSSO). MR. SUNIL KAKAR - NON-EXECUTIVE NON INDEPENDENT DIRECTOR (REPRESENTING IDFC LIMITED) Mr. Sunil Kakar is the Managing Director & CEO of IDFC Limited. He started his career at Bank of America where he worked in various roles, covering Business Planning & Financial Control, Branch Administration and Operations, Project Management and Internal Controls. After Bank of America, Mr. Kakar was the CFO at Max New York Life Insurance. He led numerous initiatives including Planning, Investments / Treasury, Finance and Accounting, Budgeting and MIS, Regulatory Reporting and Taxation. MR. VISHAL MAHADEVIA - NON-EXECUTIVE NON INDEPENDENT DIRECTOR Mr. Vishal Mahadevia joined Warburg Pincus in 2006 and is a member of the firm's executive management group. Previously, he was a Principal at Greenbriar Equity Group, a fund focused on private equity investments in the transportation sector. Prior to that, Mr. Mahadevia worked at Three Cities Research, a New York-based private equity fund, and as a consultant with McKinsey & Company. He received a B.S. in economics with a concentration in finance and a B.S. in electrical engineering from the University of Pennsylvania 38 IDFC FIRST Bank#40Board of Directors SECTION 8: BOARD & SHAREHOLDERS MR. ANAND SINHA - INDEPENDENT DIRECTOR Mr. Anand Sinha joined the Reserve Bank of India in July 1976 and rose to become Deputy Governor in January 2011. He was Adviser in RBI up to April 2014 after demitting the office of Deputy Governor in RBI on 18th January 2014. As Deputy Governor, he was in-charge of regulation of commercial banks, Non-Banking Financial Companies, Urban Cooperative Banks and Information Technology, among others. MR. ABHIJIT SEN - INDEPENDENT DIRECTOR Mr. Abhijit Sen recently retired from Citi India after serving as the Chief Financial Officer - India Subcontinent for over 18 years. In this role he was responsible for the Finance function in India, Bangladesh and Sri Lanka for the entire Citi franchise including Controllership, Corporate Treasury, Financial Planning, Product Control and Tax. MR. DESH RAJ DOGRA - INDEPENDENT DIRECTOR Mr. D.R. Dogra retired in 2016, as Managing Director and CEO of CARE Ratings, which is the second largest credit rating agency in India in terms of rating income. After a stint of 15 years in Dena Bank, he joined CARE in 1993. He has over 38 years of experience in the financial sector in the areas of banking and credit rating. He holds a Bachelor's and a Master's degree in Agriculture from Himachal Pradesh University and MBA from Faculty of Management Studies, University of Delhi. He is a certified associate of the Indian Institute of Bankers. MR. HEMANG RAJA - INDEPENDENT DIRECTOR Mr. Hemang Raja, is an MBA from Abeline Christian University, Texas, with a major emphasis on finance. Mr. Raja has also been the head of Capital Market activities in the Institutional and Retail Segments when he started and became the Managing Director and CEO of the then newly formed initiative by IL&FS, namely IL&FS Investsmart Ltd. His last assignment from the year 2006 onwards was in the area of Private Equity and Fund Management business with Credit Suisse and Asia Growth Capital Advisers in India as MD and Head - India. MS. VEENA MANKAR INDEPENDENT DIRECTOR - Ms. Veena Mankar is a Banking and Financial Services professional with expertise in trade and structured finance, financing for MSMEs and microfinance. She has over 35 years of experience in financial services with banks and financial institutions and as a strategic consultant. She was appointed on the Board of IDFC Bank as an Independent Director w.e.f July 27, 2015. 39 IDFC FIRST Bank#41Board of Directors SECTION 8: BOARD & SHAREHOLDERS MR. PRAVIR VOHRA - INDEPENDENT DIRECTOR Mr. Pravir Vohra is a postgraduate in Economics from St. Stephen's College, University of Delhi and a Certified Associate of the Indian Institute of Bankers. He began his career in banking with State Bank of India where he worked for over 23 years. He held various senior level positions in business as well as technology within the bank, both in India and abroad. The late 1990s saw Mr. Vohra as Vice President in charge of the Corporate Services group at Times Bank Ltd. In January 2000, he moved to the ICICI Bank group where he headed a number of functions like the Retail Technology Group and Technology Management Group. From 2005 till 2012 he was the President and Group CTO at ICICI Bank. MR. AASHISH KAMAT - INDEPENDENT DIRECTOR Mr. Aashish Kamat has over 30 years of experience in the corporate world, with 24 years being in banking and financial services and 6 years in public accounting. Mr. Kamat was the Country Head for UBS India, from 2012 until his early retirement in January 2018. Prior to that he was the Regional COO/CFO for Asia Pacific at JP Morgan based out of Hong Kong. Before moving to Hong Kong, Mr. Kamat was in New York, where is was the Global Controller for the Investment Bank (IB) at JP Morgan in New York; and at Bank of America as the Global CFO for the IB, and, Consumer and Mortgage Products. Mr. Kamat started his career with Coopers & Lybrand, a public accounting firm, in 1988 before he joined JP Morgan in 1994. DR.(MRS.) BRINDA JAGIRDAR - INDEPENDENT DIRECTOR Dr. (Mrs.) Brinda Jagirdar, is an independent consulting economist with specialization in areas relating to the Indian economy and financial intermediation. She is on the Governing Council of Treasury Elite, a knowledge sharing platform for finance and treasury professionals. She retired as General Manager and Chief Economist, State Bank of India, based at its Corporate Office in Mumbai. She has a brilliant academic record, with a Ph.D. in Economics from the Department of Economics, University of Mumbai, M.S. in Economics from the University of California at Davis, USA, M.A. in Economics from Gokhale Institute of Politics and Economics, Pune and B.A. in Economics from Fergusson College, Pune. She has attended an Executive Programme at the Kennedy School of Government, Harvard University, USA and a leadership programme at IIM Lucknow. 40 IDFC FIRST Bank#42Current Shareholding Pattern (post listing of new shares) Following the successful completion of the merger, on 16th January 2019, shares of Capital First Limited are converted to IDFC Bank shares and listed on NSE and BSE. The scrip IDFC Bank has thereafter been renamed as IDFC First Bank (BSE: 5394437, NSE:IDFCFIRSTB) MF/Insurance/ AIF/ Bank/FI 4.0% Public (incl NRIs) 22.3% FII/FPI/Foreign Corporates 24.7% President of India 5.5% Other Bodies Corporate 3.3% Trusts and Clearing Members 0.2% SECTION 8: BOARD & SHAREHOLDERS Key shareholders (through their respective various funds and affiliate companies wherever applicable) % Holding IDFC Financial Holding Company Limited 40.00 Warburg Pincus through its affiliated entities 9.99 President of India GIC Singapore Platinum Asset Management Aditya Birla Asset Management 5.47 3.94 1.85 1.75 Vanguard 1.41 Promoters 40.0% V Vaidyanathan (incl Rukmani Trust) 1.19 Dimensional Fund Advisors 0.81 iShares 0.68 LIC 0.61 Total # of shares as of 5th January 2018: 478,15,21,604 Book Value per Share as of 31st December 2018: Rs. 38.43 41 IDFC FIRST Bank#43ווי THANK YOU IDFC FIRST Bank