H1 FY09

INVESTOR PRESENTATION
1
 PERFORMANCE HIGHLIGHTS
Q2 H1
• Net Profit 77 % yoy 82 % yoy
• Net Interest Income 55 % yoy 71 % yoy
• Fee Income 91 % yoy 84 % yoy
• Operating Revenue 66 % yoy 73 % yoy
• Operating Profit 89 % yoy 102% yoy
• Net Interest Margin 3.51 % 3.43 %
• Cost of Funds 6.23 % 6.17 %

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 INTERPRETATION OF Q2 PERFORMANCE
• Rapid Growth in the Bank’s core businesses
– Total Advances grow 54% yoy to Rs. 68,853 crores
– Total Investments grow 39% yoy to Rs. 37,997 crores
– Total Assets register a 53% yoy growth, rising to Rs. 1,27,786 crores
– Fees grow by 91% yoy, rising to Rs. 626.77 crores
– Share of demand deposits in total deposits at 40%
• Retail Assets grow by 55% yoy to Rs. 16,777 crores; constitute 24% of total
advances, same as in the previous year
• Net NPAs at 0.43%, compared to 0.55% as at end September’07
• At end September’08, Book Value per share at Rs. 265.85, compared to Rs.
233.45 as at end September’07
• Capital Adequacy at 12.20%; Tier – I capital at 9.20%

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 PROFITABILITY
Robust Core Revenues
FY 07-08 1583
838 3043
1608
1572
FY 08-09 2950

972 1761
909 1636
403 400 733
706

228 403

Net Profit Core Operating Operating Revenue Core Operating

Net Profit Core Operating Operating Revenue Core Operating
Profit revenue
Profit Revenue
↑ 77 % YOY ↑ 110% YOY ↑ 66 % YOY ↑ 73% YOY ↑ 82% YOY ↑ 124 % YOY ↑ 73 % YOY ↑ 80 % YOY

Q2 H1
Rs. crores 4
 CONSISTENT NET PROFIT GROWTH
Net Profit has grown by over 30% yoy in 33 out of the last 35 quarters
Net Profit has also grown by over 60% yoy in each of the last 5 quarters
402.9

361.4
330.1
306.8

227.8
211.9
184.6
174.9
151.7
141.9
131.7
120.6 109.0 116.5
101.1
92.6 87.1
70.7 74.9
64.2 60.5
52.2 44.2 46.2 51.5
36.0 35.8 42.0
25.4 31.0 23.0 27.427.9
16.1 19.1
6.4 7.4 9.9

Quarter 1 Quarter 2 Quarter 3 Quarter 4

1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

5
Rs. crore
NET INTEREST MARGINS COST OF FUNDS

6.23
6.18 6.11
3.91 3.93

5.82
3.51 5.72
3.35
3.28

NIMs in the last 5 years ( % )

FY 03-04: 3.12 The NIM has risen on account of higher
FY 04-05: 2.90 yields on assets and a relatively stable
FY 05-06: 2.85 cost of funds on account of steady share
FY 06-07: 2.74 of demand deposits at over 40%.
FY 07-08: 3.47
Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09

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 GROWING NET INTEREST INCOME

1,724
FY 07-08
FY 08-09

NIIs in the last 5 years

1,010
913
(Rs. crores)
FY 03-04: 577
FY 04-05: 731
589
FY 05-06: 1,078
FY 06-07: 1,468
FY 07-08: 2,585
CAGR : 52 %
5 years
Q2 H1
↑ 55 % YOY ↑ 71 % YOY
7
Rs. crores
GROWING DEMAND DEPOSITS
YoY growth in daily average demand and term deposits (%)
Deposits Q2 FY09 H1 FY09
Savings 50 52
Current 35 41
Total Demand 43 47
Term Deposits 54 49

FY 07-08
FY 08-09
40 % ↑ 42% YOY
41,436

45 %
29,085

60 % ↑ 75% YOY

61,449

55 % 35,027

Sept'07 Sept'08

Term Deposits Demand Deposits

8
Rs. crores
 FEES
Earnings from customer forex FY 07-08 Rs. crores
transactions from this quarter are being FY 08-09
shown as fees (rather than trading 1,164
profit) in accordance with the practice
commonly adopted by other banks

Fees in the last 5 years

(Rs. crores)
632
FY 03-04: 203 627

FY 04-05: 366
FY 05-06: 558
FY 06-07: 890 328

FY 07-08: 1,495
CAGR : 58%
5 years
Q2 H1
9
↑ 91 % YOY ↑ 84 % YOY
 FEE INCOME COMPOSITION
In Q2, Fees have grown strongly in Capital Markets, Large & Mid Corporate Credit and Treasury
363
H1 FY08 Rs. crore
H1 FY09
220 222
204

153
140
109
91 85 93

56 59

LARGE & MID TREASURY AGRI & SME BANKING BUSINESS BANKING CAPITAL M ARKETS RETAIL BANKING
CORPORATE CREDIT

↑ 102% YOY ↑ 68% YOY ↑ 52% YOY ↑ 51% YOY ↑ 246% YOY ↑ 64% YOY
Q2 FY08 200

Q2 FY09

121
107 111

88
72
57
48 48 49
31
22

LARGE & MID TREASURY AGRI & SME BANKING BUSINESS BANKING CAPITAL MARKETS RETAIL BANKING
CORPORATE CREDIT
10
↑ 88% YOY ↑ 83% YOY ↑ 55% YOY ↑ 47% YOY ↑ 405% YOY ↑ 65% YOY
 TRADING PROFITS
Constitute just 2% of Operating Revenue in Q2
63
FY 07-08
FY 08-09

36

6
2

Trading Profit (Rs. crore) % of Operating Revenue

↓ 43 % YOY
Q2 11
 STRESSED ASSETS
NET NPA %

710
700
638 1
0.9
600
0.8
487 495
500 448 0.7

0.6 Net NPAs% in the last 5 years

400
0.55 0.42 326 337
248 0.5
0.47
300 281 0.36 0.43 0.4 FY 03-04: 1.03
234
200 0.3 FY 04-05: 1.07
FY 05-06: 0.75
0.2
100 FY 06-07: 0.61
0.1
FY 07-08: 0.36
0 0

Q2FY08 Q3FY08 Q4FY08 Q1FY09 Q2FY09 12

Gross NPAs (Rs. cr) Net NPAs (Rs. cr) Net NPAs %
BUSINESS OVERVIEW

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 NETWORK
Increasing Reach
Mar'03 Mar'04 Mar'05 Mar'06

Mar'07 Mar'08 Sept'08 3082

2764

Branch Demographics 2341

Branches Extn. Counters
Metro 241 15 1891

Urban 289 5 1599

Semi-urban 152 0
Rural 27 0 1244

TOTAL 709 20
822
729
671
561
405 442 450
332 339
258 252
190 192
80 117

14
Ce ntres covere d Branches + Extn. Counters ATMs
LARGE & MID-CORPORATE BANKING
• Focus on quality of credit assets with stress on corporates having
– Global competitive advantage in their businesses
– Good corporate governance and management practices
• Business Segments
– Large Corporates
– Mid Corporates
– Channel Financing
– Structured Products

• Rigorous and regular risk assessment of individual accounts

– Rating Tools and Monitoring Tools

• Offer broad suite of products with continued focus on customised

15
offerings
 TOP SECTOR EXPOSURES
Rank Sectors % Exposure of

Total Fund Based Non-Fund Based

1 Metals & Metal Products 8.54 8.89 7.90
2 Infrastructure 8.21 5.60 13.02
3 Gems & Jew ellery 7.98** 2.50 18.08
4 Financial Companies* 6.96 8.05 4.94
5 Shipping & Logistics 6.58 7.30 5.26
6 Trade 6.37 5.97 7.11
7 Real Estate# 6.12 9.00 0.78
8 Textiles 4.94 6.57 1.94
9 Chemicals 4.65 4.07 5.72
10 Engineering& Electronics 3.80 3.15 5.00
As on 30.9.2008 * Housing Finance Companies and other NBFCs. **71% of this exposure is backed by cash margins
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# The break-up of Real Estate exposure is : Property Developers 23%, Hotels 14%, IT Parks 14% and Others 49%
 LARGE & MID CORPORATE
DISTRIBUTION OF RATINGS
84% of corporate advances have rating of at least ‘A’ as at Sept’08
as against 78% as at Sept’07
1 0 1 8
7
AAA
21 21 22
20 18
AA

A
56 56 58 55 58
BBB

17 18 <BBB and
15 14 13 Unrated
6 6 4 4 3
17
Sept'07 Dec'07 Mar'08 Jun'08 Sept'08
 SME & AGRI BUSINESS
13,109
Sept'07
Sept'08

Rs. crores

7,801

5,134

3,365

SME Advances Agricultural Advances

↑ 68 % YOY ↑ 53 % YOY

• Specialised SME Centres for SME appraisals, sanctions and post-sanction

monitoring
– 24 Centres at Sept’08, as against 20 Centres at Sept’07
• Specialised Clusters for Agricultural lending, coordinating appraisals,
sanctions and post-sanction monitoring
18
– 44 Agri-Clusters at Sept’08, as against 33 clusters at Sept’07
 SME
DISTRIBUTION OF RATINGS
78% of SME advances have rating of at least ‘SME3’ as at Sept’08 as
against 75% as at end Sept’07 1
2 0 1 SME1
2
9 8 9 14
11
SME2

64 63 62
65 63 SME3

SME4
18 22 19 13 15
6 7 10 9 7 SME5-8

Sept'07 Dec'07 Mar'08 Jun'08 Sept'08 19

 BUSINESS BANKING
CASH MANAGEMENT SERVICES
461,674
221,572
4032

163,524
303,629

2592

Throughput (Rs. crores) Throughput (Rs. crores) CMS Clients

Q2 FY08 Q2 FY09 H1 FY08 H1 FY09

↑ 35 % YOY
↑ 52% YOY ↑ 56% YOY

• The Bank collects Central Government Taxes on behalf of CBDT and CBEC,
including through e-Payments.
•The Bank collects State Taxes on behalf of seven State Governments and UTs
•Collections & Payments for Central Government Ministries - Railways, Urban
Development and Housing & Urban Poverty Alleviation.
20
•Collections under e-Governance initiatives of 4 State Governments and Chandigarh
 BUSINESS BANKING
CURRENT ACCOUNTS GROWTH
Sept'07 Sept'08 19,970
Current Account deposits in the
last 5 years, ending March
14,690
Rs. crores
Mar’04 : 5,394
Mar’05 : 7,155
Mar’06 : 7,970
Mar’07 : 11,304
Mar’08 : 20,045
CAGR : 52%
Total CA Deposits (Rs. Crs.) 5 Years

↑ 36 % YOY
• Wide Range of Products
• Customised offerings for various business segments
• Growth aided by “Club 50” and “Channel One” – high-end premium
products
• Broad-based sales strategy
21
• Focused approach for Corporates, Institutions & Government
 TREASURY
66,072 Rs. crores
FY 07-08
FY 08-09
109,780

25.9
23,694 46,630
40.5 40.2

11.6 12.2
11.5 11.0 19.6
15.8 13.4

0.6

Forex Turnover Forex Profit Money Market Derivatives Forex Turnover ForexProfit Money Market Profit -1.0
Derivatives
Profit

↑ 179 % YOY ↑ 123 % YOY ↓ 6% YOY ↑ 1733 % YOY ↑ 135% YOY ↑ 107% YOY ↑ 154 % YOY

Q2 H1 22
 CAPITAL MARKETS 20,100

14,583

18,455
Rs. crores

9,618

Placements & Syndications Placement & Syndication

Q2 FY08 Q2 FY09 H1 FY08 H1 FY09

↑ 52% YOY ↓ 8% YOY

•A dominant player in Placement and Syndication of debt issues

•Ranked No.1 as debt Arranger by Prime Database for the year ended Mar’08 and No. 2 for the quarter
ended June’08
•Ranked No.1 in the Bloomberg Underwriters League Table for Indian Domestic Bonds as on
September’08
•Project Advisory Services mandates increase
•Recent Awards -Euromoney 2008: Best Debt House in India; Finance Asia 2008: Best Bond House in
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India; Asia Money 2008: Best Domestic Debt House in India
 SAVINGS BANK GROWTH
Sept'07 35,605 Savings Bank growth led by:
Sept'08
•Wide Network - Branch and ATM

24,188
Channel reach
21,466
•Bank’s own sales channel

14,395 •Focused strategy for niche

customer segments

•Corporate and Government

SB Deposits Retail Deposits

payroll accounts
↑49 % YOY ↑ 47 % YOY 24
Rs. crores
 THIRD PARTY PRODUCTS BUSINESS
109
Personal Investment Products - Fees
• Focus on cross-selling to Bank’s Rs. crores
existing customers to generate fee FY 07-08
income FY 08-09 66
52
• Third-party products sold include:
Mutual Funds, Insurance, On-Line 30
Broking, Portfolio Management
Services (Non-discretionary) and
Gold Coins
• Systematic segmenting of Q2 H1
↑120% yoy ↑ 110% yoy
customers
Mass market Mass Affluent Affluent
Description Largest customer segment Small, but growing, base of Niche customer base
within the Bank customers
Focus Transactions-driven cross- Transactions-driven, but with Total focus on
sales of products initial relationships being relationships which
built results in cross-selling
Products Bundled insurance with Customer needs mapped on to Customised Portfolios
home loans and credit existing standardised 25
cards portfolios
 RETAIL ASSETS
16,777

Sept'07 •Retail Assets grow 55% yoy; this

Sept'08
includes short term lending for DDA
bookings of Rs. 1,674 crores which will be
10,848 10,84,536
repaid in Q3.

648,003
Retail Assets (Rs. crores)
↑ 55 % YOY
•Excluding the above short term lending,
Retail Assets have grown 39% yoy
•Retail Assets constitute 24% of the
Bank’s total advances, the same as at end
September’07
•Growth driven through Retail Asset
No. of Accounts
26
↑ 40 % YOY
Centres(RACs)
 COMPOSITION OF RETAIL ASSETS
Consumer Durables
0%
Personal Loans
22% Cards 4-Wheelers
4% 9%
Non-Schematic
5%

Auto Loans
13%

2-Wheelers
0.1% Commercial
Vehicles
Housing Loans 4%
56%

27
 CARDS BUSINESS84
Rs. crores

FY 07-08 56
FY 08-09 46
32

Q2 Cards Business - Fees H1

↑ 44% yoy ↑ 50% yoy
• ISSUANCE
– Over 518,000 Credit Cards in force till end Sept’08
– 3rd largest debit card base in the country
– 1st Indian Bank to launch Travel Currency Cards in 8 currencies -US$, Euro, GBP,
AUD, CAD, SGD, SEK, CHF
– 1st Indian Bank to launch Remittance Card and Meal Card
• ACQUIRING - Installed base of over 90,000 EDCs and growing 28
• Cards business a significant contributor to Retail Fees
 ATM CHANNEL MIGRATION
Over 95% of SB account cash withdrawals occur on ATMs.
105 Sept'07
Sept'08
4,494

70 3,355

222.2

138.5

C ardbase (in lakhs) C ash Withdrawals (R s. cro re) N o . o f T ransactio ns (in lakhs)

↑ 50% yoy ↑ 34% yoy ↑ 60% yoy

•Pioneer in ATM sharing arrangements

•Value added services such as Bill Payments, MF Investments,
Mobile Top-ups and VISA Money Transfer services

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 INTERNATIONAL PRESENCE
• Branches at Singapore, Hong Kong and DIFC, Dubai

• Representative offices at Shanghai and Dubai

• Total assets overseas operations amounted to US$ 1.95

billion

• Corporate Banking, Trade Finance products, Debt

Syndication and Liability businesses

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SHAREHOLDER RETURNS
245.14

•Annualised ROE of 17.94% in Q2 FY09, as compared

to 15.41% in Q1FY09 and 13.64% in Q2 FY08.

•ROA of 1.34% in Q2 FY09, as compared to 1.19% in

Q1 FY09 and 1.10% in Q2 FY08
120.50
103.06

87.95

25.85 21.84
18.44 16.09 1.21 1.18 1.10 1.24

Book Value per Share (Rs.) Return on Equity (%) Return on Assets (%)

2004-05 2005-06 2006-07 2007-08 31

 SHAREHOLDING
•Share Capital - Rs. 358.89 crores
UTI-I
•Net Worth - Rs. 9,081.86 crores 27.09%
Others
•Book Value per share - Rs. 265.85 35.06

•Market Price as on 10/10/08 - Rs. 552.60

LIC
•Market Cap as on 10/10/08 - Rs. 19,832 10.36%

crores (US $ 4.09 billion) FIIs

27.49%

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 SAFE HARBOR

• Except for the historical information contained herein, statements in this

release which contain words or phrases such as “will”, “aim”, “will likely result”,
“would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”,
“intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “strategy”,
“philosophy”, “project”, “should”, “will pursue” and similar expressions or
variations of such expressions may constitute "forward-looking statements".
These forward-looking statements involve a number of risks, uncertainties and
other factors that could cause actual results to differ materially from those
suggested by the forward-looking statements. These risks and uncertainties
include, but are not limited to our ability to successfully implement our strategy,
future levels of non-performing loans, our growth and expansion, the adequacy
of our allowance for credit losses, our provisioning policies, technological
changes, investment income, cash flow projections, our exposure to market
risks as well as other risks. Axis Bank Limited undertakes no obligation to
update forward-looking statements to reflect events or circumstances after the
date thereof.
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Thank You

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