Corporate Presentation

January 2018
Rider to the Presentation – Disclaimer
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Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 2

Agenda

1 Macro Economic Conditions in India

2 Canara Bank Overview

3 Key Investments Highlights

4 Subsidiaries & JVs

5 Growth Strategies

6 Financial Summary

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 3

 1

Macro Economic Conditions in India

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 4

Macro Economic Conditions in India

Growth in GDP… …and improving GDP growth rate Current account deficit as % of GDP
GDP (In Rs Bn) GDP growth rate CAD as % of GDP
7.40%
151,840 4.80%
7.00%

136,820 6.30%

1.10% 0.70%

FY16 FY17 Q2FY17 FY18E FY20P FY13 FY16 FY17

Reserve Bank of India credit policy Overview of banking sector in India Recent developments
Policy rates :  148 scheduled commercial banks in India (as  Implementation of Insolvency and Bankruptcy Code enabling creditors to
 Policy Repo rate : 6.00% of 31st December 2017), of which the largest approach the National Company Law Tribunal (“NCLT”)
 Reverse repo rate : 5.75% category in public sector banks (PSBs)  Demonitization : On November 8, 2016, the Government of India and the RBI,
 Marginal standing facility : 6.25% (majority ownership by the Government of declared the ₹ 500 and ₹ 1,000 denominations of banknotes of then existing series
India) issued by the RBI to cease to be legal tender
Reserve ratio’s :  The public sector banks in India include 19  Implementation of Goods and services tax(GST) in July 2017 subsuming majority of
 Cash reserve ratio : 4.00% nationalized banks central and state level taxes
 Statutory liquidity ratio : 19.50%  Apart from PSBs there are private sector  Prompt corrective action framework implemented to monitor the financial health
banks, foreign banks, regional rural banks, co of banks
operative banks, small finance banks,
 Reviewed provisions under SARFAESI act in view of enhanced role of asset
payment banks, long term lending
reconstruction companies (ARCs)
institutions, non banking financial companies
and other financial institutions  Framework on Counter-cyclical Capital Buffer (“CCCB”) was put in place by the RBI

Note:
GDP (Source: Press Note on Provisional Estimates of Annual National Income, 2016-2017 and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter of 2016-2017, Central Statistics Officer, Ministry of Statistics and
Programme Implementation, Government of India, May 31, 2017).
GDP growth rate (Source: Press Note on Estimates of Gross Domestic Product for the second quarter (July-September) 2017-2018, Central Statistics Office, Ministry of Statistics and Programme Implementation, Government of
India, November 30, 2017, World Bank. 2017. “Growth out of the Blue.” South Asia Economic Focus (October), Washington, DC: World Bank. Doi: 10.1596/978-1-4648-1213-2. License:Creative Commons Attribution CC BY 3.0 IGO).
CAD (Source: The RBI's Developments in India’s Balance of Payments during the Second Quarter (July - September) of 2017-18).
Demonitization (Source: Government of India, Gazette Notification No. 2652 dated November 08, 2016 and RBI notification (RBI/2016-17/112) dated November 8, 2016)
Credit Policy (Source: RBI 5th Bi-monthly monetary policy Available at https://www.rbi.org.in)
Overview of Banking Sector in India (Source: RBI. Available at https://www.rbi.org.in)

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 5

 2

Canara Bank Overview

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 6

Canara Bank at a Glance

Overview Canara Bank Shareholding as on 31 December 2017

 One of the leading public sector banks in India with 112 years of history
 Amongst top 5 public sector banks in India by total book size as of 31 st March 0.43%
2017 (Source: Indian Banks’ Association – Key Business Statistics – Public Sector 1.44%
4.68%
Banks)
7.74%
 Global business of Rs. 8,770.10 Bn as of Q3FY18
 Pan India Presence with 6,171 branches1 and 9,743 ATMs1 serving 81.80 Million
clients1 7.59%
 8 international branches1
 Offers a complete array of services such as
 Retail banking
 Wholesale banking
11.82%
 Priority sector lending
 International banking
 Treasury operations 66.30%
 Services offered by subsidiaries/JVs
 Factoring
 Asset management
 Life Insurance
 Housing finance
 Merchant banking GOI Insurance Companies
 Venture capital Mutual Funds FPIs
 Brokerage Resident Individuals Others
Financial Institutions/ Banks
 Active contributor to Financial Inclusion
 890 Financial Inclusion branches1
 Lead bank responsibilities in 31 districts of the country1
1:As on 31st December 2017

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 3

Key Investments Highlights

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 8

Investment Highlights

 Strong and established brand with long standing presence in the Indian banking sector

 Wide distribution network across India and international presence

 Diversified asset portfolio with a focus on retail segment

 Strong liability base

 Technology driven and committed towards digital banking

 Consistent financial performance

 Proven management team

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 9

Strong and established brand with
long standing presence in the Indian banking sector

2017 Launch of first fully digital branch : CANDI

2016 8th overseas branch at Dubai is inaugurated

Canara Bank (Tanzania) Limited, a wholly owned subsidiary is opened

2010 Core Banking Solution implemented in all domestic operations

2008 Launching of a “New Brand Identity”

Foray into Asset Management and Life

2007 Best CIO of the Year ” by Computer Society of India for “CANDI” an
Insurance through joint ventures
ambitious digital banking project of the Bank in the “IT Innovation &
Excellence Awards2017”
2006 Centenary year of the Bank
Core Banking Solution implemented in select branches
Skoch Smart Security awards 2017 for “SIEM” tool

2002 Listing through Initial Public Offer Dun and BradStreet Award for 2016-17 adjudging as Best Public
Sector Bank –Priority Sector Lending Bank consecutively for last 3yrs

1976 Inauguration of 1000th branch Golden Peacock Award 2016 under CSR activities

SKOCH Award 2016 for SME Enablement

1969 Nationalization of the Bank

MSME Excellence Award 2017 by Federation of Industrial Trade and

1910 Renaming as Canara Bank Services (FITS)

1906 Registration of Canara Hindu Permanent Fund Limited

112 years of history

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 10
Wide distribution network across India and international presence

Strong Presence in South India1 No. of domestic branches

Northern Region
(14%) 6,171
6,075
Western Region
(10%)
5,841

5,675

Central Region (16%) FY15 FY16 FY17 9MFY18

North Eastern Region

Presence across urban & rural areas1
(2%) Urban
18.74%
Semi Urban
32.12%

Eastern Region
(14%)
Southern Region Metro
(44%) 20.08%

8 international branches in Johannesburg, New York, London, Leicester, Rural

Shanghai, Manama, Hong Kong & Dubai 29.06%

Healthy mix of branches in Urban and Rural areas with strong dominance in historically fast growing southern region of the country
1: As on 31st December 2017; Note: Map not to scale

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 11

Diversified asset portfolio with a focus on retail segment

Net Advances Yield on Advances

(In Rs Bn)
3,731.23
10.75%
9.71%
8.99%
8.21%
3,420.09
3,300.36
3,247.15

FY15 FY16 FY17 9M FY18 FY15 FY16 FY17 9MFY18

Yield on funds Net Interest Income

8.78% (In Rs Bn)
98.72
97.63
96.64
8.11%

7.42%
7.32%
91.76

FY15 FY16 FY17 9MFY18 FY15 FY16 FY17 9MFY18

Growing advances with a higher share of retail advances support NII

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 12

Diversified asset portfolio with a focus on retail segment

Increasing Focus on Retail & MSME to Diversify Asset Portfolio

Advances on March 2013: INR 2,421.77 Bn Advances on March 2017: INR 3,420.09 Bn
9.5% 17.2%
Corporate
16.8%
39.4%
MSME

Agriculture 21.7%
58.3%

15.3%
Retail Credit

21.7%

Sector wise NPAs(1) Year on year growth in advances(1)

18% 17% Micro and Small enterprises 32.87%

Agriculture

8% 14.80% 15.65%
Other priority segments
2% 6.06%
Medium enterprises
4%

Large Industries
-1.97%
-5.16%
Other non PSL segments
52% Roads Airports Power Agriculture MSME Retail

1:As on 31st December 2017

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 13

Strong liability base

Deposits CASA
(In Rs Bn) (In Rs Bn)
5,038.88 1,575.86
1,497.49
4,952.75
1,235.42
1,135.32
4,797.92
4,738.40

FY15 FY16 FY17 9MFY18 FY15 FY16 FY17 9MFY18

CASA share (as % of domestic deposits) Cost of Deposits

7.38%
32.85% 33.83% 6.94%
6.25%
27.38% 5.59%
25.47%

FY15 FY16 FY17 9MFY18 FY15 FY16 FY17 9MFY18

Strong inflows post demonetization have led to an increased share of cheaper CASA funds for the
bank thereby reducing overall cost of deposits

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 14

Technology driven and committed towards digital banking

Entire suite of digital offerings First Digital Branch – CANDI in Bengaluru

 Mobile based solutions
 eMpower: Unified Payment Interface app (UPI), a single
platform to access multiple bank accounts
 Canara mServe: Which enables customers to hot list and 1
Block/Unblock Cards
 Canara Swipe: All missed call solutions in a single  Self Banking
application
4  Video banking
 Quick Cash deposit
 Canara GeoLocate: An App for locating Branches and  Touch Banking
 Quick Cheque
ATMs deposit
 Canara Cart: An umbrella app containing all mobile based  ATM
solutions
 Bharat QR code enabled mobile banking app

 Other Digital solutions

 Canara easyCash
 eKYC for Aadhaar based biometric access to lockers
 Online application for SB and PPF accounts Talk to bro(robot)
 Instant A/C
 Aadhaar registration through net banking and ATMs opening  Digital token
 Instant debit card  Digital slip
 181 hi-tech E-lounges (as of 31st December 2017) operational
 Instant Internet banking  Digital
in select branches, with facilities like:
 ATM’s  Instant mobile banking
feedback 2
 Cash Deposit Kiosk with voice guided system  Virtual welcome kit
 Cheque Deposit Kiosk
 Self Printing Passbook Kiosk 3
 Internet Banking Terminal
 Online Trading Terminal and
 Corporate Website Access

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 15

Technology driven and committed towards digital banking

Rationalized number of ATMs (domestic) ATM cards issued for..

ATMs (In million) ATM Card Base
10,519
41.42

9,743
33.10
9,251 31.90

8,533 25.47

FY15 FY16 FY17 9MFY18 FY15 FY16 FY17 9MFY18

Emphasis on digital banking... …has led to increase in digital transactions

(In million) Internet Banking Users Mobile banking Users eTransactions as % of total transactions
76%

7.64
65%
5.16
4.37
3.85 54%
3.04 50%
2.22 2.41
1.54

FY15 FY16 FY17 9MFY18 FY15 FY16 FY17 9MFY18

Digital initiatives have disrupted banking space, with increased govt. push, digital to drive future growth

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 16

Consistent financial performance

GNPA NNPA

10.38%
9.40% 9.63%

6.42% 6.33% 6.78%

3.89%
2.65%

FY15 FY16 FY17 9MFY18 FY15 FY16 FY17 9MFY18

PCR Capital Adequacy

57.29%
55.62% 55.81% 12.86% 12.49%
10.56% 11.08%
9.77% 9.57%
8.80%
8.02%
50.11%

FY15 FY16 FY17 9MFY18 FY15 FY16 FY17 9MFY18

CRAR Tier 1 Ratio

RBI initiated Asset Quality Review led to a higher NPA recognition for the year, with adequate provisioning,
focus now on expedited resolution

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 17

Consistent financial performance

NPA composition Slippages (Fresh + Debits in existing accounts)

(In Rs Bn) 315.46 (In Rs Bn)
26.21

20.10
172.34 171.05

87.66
2.15
0.20

Sub Standard Doubtful Fresh Slippages Debits in existing NPAs

Q1 FY17 Q1 FY18 Q3 FY17 Q3 FY18

Cash recovery in written off assets,

Sector wise cumulative restructured accounts
current year slippages and U/A interest
(In Rs Bn) (In Rs Bn)
200.24 15.27
179.20

10.21

15.58 13.29 1.79 1.90

2.95 2.28 2.20 1.26

Agriculture MSME Housing Loans Large Advances Others Total cash recovery

Q3 FY17 Q3 FY18 Q3 FY17 Q3 FY18

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 18

Proven management team

Management Team

T N Manoharan, Rakesh Sharma,

Chairman MD & CEO

P V Bharathi, M V Rao,
Executive Director Executive Director

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 19

 4

Subsidiaries & JVs

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 20

Subsidiaries & JVs
% Stake (as of 31st % Stake(as of 31st
Subsidiaries & JVs Subsidiaries & JVs
December 2017) December 2017)

51%
100%

100%

30%

51%

69.14%

40%

70.0%
100%

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 21

 5

Growth Strategies

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 22

Growth Strategies

Continue to strengthen our retail banking operations

Increase our fee-based income
 Increased focus on marketing campaigns to
 Increase fee income by introducing new products &
increase CASA thereby reducing cost of funds
cross sell offerings
 Focus on bancassurance, cross-selling of mutual fund  Increased focus on retail loan portfolio in
products, loan syndication among others Agriculture, Housing & Vehicles

1
6

Increase customer penetration through Focus on recovery and NPA management

expansion of branch and ATM network
 To leverage lead bank status and brand recall, to
2  Mission Samadhan : Conduct recovery meets/
Adalats/ Mega Adalats
expand presence across select geographies in India by
increasing branch network  Separate division for Asset recovery branches

 focus on ensuring high customer satisfaction standards 5  4 levels of control mechanism starting from branch
across our various customer interfaces through to RO to Circle Office and then HO
centralized customer support services

3
4
Continue our investments in technology to Project Shikhar
support our digital banking
 Branch transformation initiative with the aim of
 Leverage on technology to maximize efficiency in making the Bank more Responsive, Accessible,
operations Convenient and Energized
 Focus on transforming the Bank into a knowledge  Branches are given different star ratings based on
based, customer-centric bank ATM hits, CASA %, Fee income growth,
e-transactions etc

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 23

 6

Financial Summary

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 24

Balance Sheet Highlights
Consolidated Balance Sheet (in Rs Bn) FY15 FY16 FY17 Q3FY17 Q3FY18

Cash & Balances with RBI 219.77 206.65 199.25 239.72 227.21

Balances with banks and money at call and short notice 266.71 360.79 390.43 345.09 288.54

Investments 1,521.22 1,524.70 1,620.73 1,690.35 1,418.26

Advances 3,302.94 3,249.92 3,423.20 3,316.36 3,731.23

Fixed Assets 69.70 72.06 71.85 71.71 70.88

Other Assets 205.24 223.13 256.13 246.94 261.61

Total Assets 5,585.58 5,637.25 5,961.59 5,910.16 5,997.73

Paid up Capital 4.75 5.43 5.97 5.43 5.97

Reserves and surplus 320.17 318.67 340.88 318.86 336.23

Deposits 4,737.25 4,797.49 4,925.66 5,103.28 5,038.88

Borrowings 257.63 269.63 395.92 313.12 471.38

Other Liabilities and Provisions 261.99 241.54 261.17 169.48 145.27

Total Liabilities 5,585.58 5,637.25 5,961.59 5,910.16 5,997.73

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 25

Profit & Loss Highlights
Consolidated Profit & Loss statement (in Rs Bn) FY15 FY16 FY17 Q3FY17 Q3FY18

Interest Earned 438.13 440.39 414.57 102.88 107.75

Interest Expended 341.33 342.63 315.40 78.74 70.96

Net Interest Income 96.80 97.77 99.16 24.14 36.79

Other Income 47.33 51.31 78.52 17.92 15.66

Operating Income 144.14 149.08 177.69 42.06 52.46

Operating Expense 72.66 75.92 86.12 22.24 24.14

Operating Profit 29.31 -25.35 91.56 19.81 28.31

Net Profit 28.65 -26.07 13.58 3.22 1.26

Key Ratios:

EPS(Basic) 62.10 (46.70) 24.98 5.93 2.11

EPS(Diluted) 62.10 (46.70) 20.63 5.93 2.11

Return on Assets 0.50% -0.52% 0.20% 0.23% 0.09%

CRAR 10.56% 11.08% 12.86% 12.28% 12.49%

Tier 1 Ratio 8.02% 8.80% 9.77% 9.01% 9.57%

Corporate Presentation | January 2018 PRIVATE & CONFIDENTIAL 26