– Investor Day

22nd November 2022

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IndusInd Bank – Investor Day
Presentation-6
Corporate & Commercial Banking Group
Evolving Operating Environment and Bank’s Response / Performance

Macro Developments Bank’s Performance

Increasing Lending Rates 40 bps improvement in QoQ Yields

Robust Credit Growth backed by government push & Overall Corporate Segment growth : 23% YoY
record high GST collection Small Business growth : 46% YoY

Deleveraging by corporates & strengthening of Increase in upgrade ratio; Investment grade book at 96%, up
balance sheet 100 bps y-o-y
‘Early Credit’ digital platform for ecosystem financing
Accelerated Digital adoption across supply chain by
launched; 85%+ Clients transacting online; 35k crs throughput
corporates
across 2.3L+ transactions in H1.
Positive momentum in the Real Estate industry Focus on building robust book; Active churn strategy; ~75% of
coupled with Consolidation Real estate book churned since Mar’20.

Close monitoring and periodic stress testing of portfolio; no

Disruptions caused by Russia-Ukraine conflict
surprises in asset quality
Customer Base
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Presentation Outline

Corporate & Commercial Banking Franchise

Fine-tuning corporate bank approach

Future in focus

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Presentation Outline

Corporate & Commercial Banking Franchise

Fine-tuning corporate bank approach

Future in focus

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Catering to the all-encompassing corporate landscape
540+ Large & Mid corporates Small Corporates
5000+ Coverage coverage from coverage from
# Asset Clients 15+ cities
team strength 60+ cities

 Cash Credit
 Overdrafts
 Working Capital Demand Loan
 Short term loan Corporate entities from turnover 150 crs
 Pledge Financing and above –
 Vendor/ Dealer Finance
1 2 includes SMEs, Mid Corporates, Large
corporates, Conglomerates, PSUs, MNCs
Business  Receivables Collection
Cash  Payables Management
Operations Management  Current Accounts; Escrow Services

 Bill Discounting/ Factoring

Across 100+ Industries and sub-industries
3 

Vendor/ Dealer Finance
Pre & post Shipment Financing with dedicated coverage of identified
 Letter of Credit/ Bank Guarantees
Customer Trade  Buyer’s Credit specialized verticals
Solutions  IDPMS/ EDPMS/ Digital trade documents

 Remittances
5 4 

FX & IR Hedging
Structured Deposits Pan-India geographical coverage across all
Growth  Exchange traded currency derivatives regions with industry specific cluster coverage;
Treasury
Financing Solutions International Entities through GIFT City
 Brownfield capex financing
 Project Financing
 Syndication/ Debt Capital markets
 Investment Advisory 6
Well Diversified Book
(₹crs) %

Loan Book (₹crs)

1,21,766 Large Corporates 68,668 crs 56.4%
1,14,429
1,09,463
1,05,481
99,079
92,407 Mid Corporates 42,478 crs 34.9%

Small Corporates 10,620 crs 8.7%

June'21 Sep'21 Dec'21 Mar'22 Jun'22 Sep'22

Book by Region Book by Ticket Size Book by Industry

Sep-22 Sep-22 (₹crs) Sep-22 Real Estate – Comm. & Resi.

<100
6% 14%* NBFCs (other than HFCs )
North 9.98%
29%
100-250 9.96% Gems and Jewellery
39% South 14%
37%
250-500 9.51% Steel
West 57.15%
18% 18% 25%
500-1000 5.08% Power Generation – Non
East Renew.
5.08%
>1000 Food Bev. and Food Proc.
3.25%
*94% AA & above
Others
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Note: All data as of Sep-22
Franchise strength – built on a client-centric and holistic business model

Risk Management
Client-centric Coverage
Adaptive Risk and Policy framework for:
 Robust & tiered due-diligence framework 04 01  Strategically segmented in line with size of
 Early identification and mitigation of Risks corporates
 Continuous monitoring  Specialized coverage for identified
industries

Acquire

Monitor

Service
Deepen

Broad based, differentiated

Digitization & Analytics Product solutions
 Differentiated product capabilities to deliver
 Digitized customer journeys (Front to 03 02 client & industry specific integrated
backend) for enhancing client experience
solutions
 Productivity enhancement using Analytics
 Broad base capabilities and continuous
 Robust Risk Management
innovation

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01 Comprehensive coverage to provide best in class client service

Client Coverage Units Specialized Coverage Units

Domain Expertise with market No Restructuring

Emerging Mid- Gems & Jewelery leadership position No SMA
Corporates No NPA

Real Estate & Our Real Estate Unit focuses on 75%

Corporate Banking micro-market expertise with
warehousing of asset book churned since Mar‘20
churning to maintain sectoral caps
Group
Financial Institutions & Banker of choice for Cash 2800+ escrow accounts
NBFCs Management Services with focus 96%+ Book ‘A‘ rated & above
Global Corporates & on liability led asset growth
No NPA & restructuring.
Institutional Group
Agri Business Group

Agri, Education and Healthcare ~10,000+ crs

Public Sector Asset book built across 3
unit Captures end-to end Value
Undertakings (PSUs) Education verticals
chain with gamut of tailor-made
solutions

Healthcare

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Note: All data as of Sep-22
02 Our differentiated product capabilities
With comprehensive products for capturing ecosystem financing backed by digital capabilities

Trade & Supply Chain financing Global Market Solutions# Cash Management Solutions
► Well-diversified book across products with ► Dominant Market Maker in Fx. spot and
dominant position in niche offering ► Bouquet of products across collection and
forwards with annual volumes of 380+ bn payments - 400+ APIs on API Gateway and 50
► Digital Stack – Indus Direct for Trade (Web USD APIs on Sandbox
& Mobile) ► Provide hedging solutions to clients across ► 700+ mandates implemented across 550+
► 43% CAGR in last 2 years for supply chain sized with annual volume of 55+ bn USD clients in FY22; Additionally, 235 mandates
finance product ► 25% CAGR in income across FX, trading implemented across 200+ clients in H1’23.
► Digital Stack – Early Credit for Supply Chain and derivatives products ► 35%+ growth in cash throughput value (y-o-y)
Financing ► Digital stack - Speed Remit for Fx for H1’23
Remittance
First Bank to launch Digital Payments for Escrows
One of the first banks to implement First Bank to go live on BBPS for NBFCs
Ripple (A Block chain solution for Remittances)

Corporate clients transacting

Product* Penetration Product* fee contribution
digitally
@76%+ across client coverage units @ 57%+ of total fees
@ 12k + corporate clients@

Product* fee contribution increased to 55-60% levels from 45% - 50% levels earlier.

All data as on Sep’22 except # which is as on Mar’22

@Includes Non-individual clients across Retail & Corporate segments

* Products includes Trade, FX & Cash Management

02 Our differentiated product capabilities

Debt Capital Markets Project Financing

42 projects | 15k+crs 85%

~45,300 crs Underwritten under renewable energy sector Book underwritten churned
of assets sold till date across 170+ deals
15 projects | ~9kcrs 70%
 Improved League Table Position from 6th in CY16 to 2nd in 9MCY22 Underwritten under Roads and Highways sector Book underwritten churned

 Maintained position in Top 5 in League Table since 2017 14 projects | ~8kcrs 87%
Underwritten under Transmission sector Book underwritten churned

9MCY22 League Table Position – IBL ranked 2nd in Deal Volume & Count 1st Bank to structure HAM and Road Invit financing in India
by Refinitiv
Bank offers products across the project life cycle and has financed projects in sectors
like Energy Efficiency, E-mobility, Water and City Gas Distribution

Market Volume Rank Rank

Lenders Deals
Share (₹ Cr.) (Volume) (Deal Count)
SBI 79.59% 41,002 1 7 1
IndusInd Bank 3.15% 1,645 2 4 2
ICICI Bank 2.59% 1,305 3 3 3
Bank of Baroda 1.68% 867 4= 1 4=
Bank of Maharashtra 1.68% 867 4= 1 4=
Canara Bank 1.68% 867 4= 1 4=
EXIM Bank 1.68% 867 4= 1 4=
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Note: All data as of Sep-22
03 End- to-End digital enablement for Corporate Banking

Interactive Dashboards

Sales enablement tools enabling Teams to focus

their efforts on prospects and clients with the
highest value in terms of returns
Digital channels and tools to address the ► KPI Management
rapidly evolving demands and expectations ► Portfolio Management
of our corporate clients across products and Coverage
services. Customer team
Client one View

Differentiating insights which are tailored to the

specific needs of an individual prospect or
client.
► Share of Wallet – Asset, CA, CMS, Fx etc.
Risk ► Pricing Analytics
Management ► Self Transfer

Early Warning System

Real-time data analytics with Risk triggers

► Internal + External Data Points
► 200+ Triggers
► Automated Alerts 12
04 Comprehensive Risk Management Framework – with multiple layers of defense
Underwriting aligned towards granular, secured, shorter duration loans from high rated customers

Robust Credit Framework.. ..with continuous monitoring .. and right support & interventions

Third Line
Central Quality & Assurance Team 3 of Defense
Credit Org. structure mirrors
Portfolio Monitoring
Policy: Credit | Pricing | ESG

Approval Grids (L1 coverage model enabling

Regulatory Guidelines

> L2 > L3) specialized underwriting

Second Line of
2 Defense Risk Analytics
Credit Due
Diligence
Defined pre-screening guidelines
to enhance filteration process &
Business Due First Line of Early Warning Signals
1 acquisition quality
Diligence Defense

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Presentation Outline

Corporate & Commercial Banking Franchise

Fine-tuning corporate bank approach

Future in focus

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The precursor to our current Business Strategy

We had consistent loan growth journey … … except for FY19-21

102421
Loan Book (₹crs)

91334 91018

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Mar'19 Mar'20 Mar'21

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The precursor to our current Business Strategy

Key learnings from our experience Implementing the learnings while navigating COVID

Customer concentration built up over the period

A
Tighter & well-defined credit
Reliance on bulky fee income underwriting norms with
Deals pertaining to holding company with limited enhanced risk management
cashflow support framework
Limited focus on building liability franchise
Sub-optimal coverage structure especially in small B
businesses
Under penetration in top conglomerates Re-orientation of business
model to focus on granular
Delayed identification of risk triggers acquisition

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Implementing the learnings – ‘Fine-tuning the Corporate Bank approach’

A Tighter credit underwriting norms & enhancing risk management framework

Policy & Thresholds Proactive Portfolio Monitoring

Tighter policy norms pertaining to complex & structured Implementation of robust Early Warning Signals (EWS)
transactions to address inherent risks in the Systems for taking timely remedial action
transactions

Introduction of pre-screening process with defined go/ Group Borrower exposures strategies basis Strength &
no go criteria Standing of Group

Rationalization of Single Borrower limit linked to Strengthen Credit Quality Assurance Unit to enhance
Internal Rating; Correlated with Net Profits & much stress identification
below RBI prescribed norms

Conservative Capping of Sensitive Sector Exposures ; Enhancing rigor and frequency of internal reviews
Tightening of Concentration Exposure norms across Business & Credit

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Implementing the learnings – ‘Fine-tuning the Corporate Bank approach’

B Re-orientation of business model to focus on granular acquisition

 Carving a dedicated unit for Strategic groups, Global corporates to provide a differentiated coverage & delivery
 Optimization of industry verticals in line with market; Continued focus on specialized verticals for active portfolio
Key principles management
 Dedicated coverage of emerging mid-corporates

Client Coverage Units Specialized Coverage Units Product Units

Sharper focus Sharper focus Scale-up Maintain Leadership Scale-up Re-newed

Global Financial Services Group Gems & Jewelery Supply Chain Financing Investment Advisory &
Corporate Emerging Mid-
Corporates & DCM
Banking Group corporates
Institutional
Group Consolidation Scale-up Selective Focus
Real Estate & Trade, CMS, Cash
Agri Business Group Project Finance
warehousing
PSUs (Public
Sector FX, Derivatives
Undertakings) Education Healthcare
Structured Finance

Digital

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How our strategy has played so far

Focused approach on acquisition across high rated asset Improvement in rating profile of the book # …
has resulted in ….
6% 6% 5% 4%
24% 23%
31% 26%

27% 26%
27%
29%

15% 21% 25%

15%

19% 25% 23% 22%

Mar-20 Mar-21 Mar-22 Sep-22

80%+ of new Relatively higher AAA AA-, AA, AA+ A-, A, A+ BBB-, BBB, BBB+ BB+ & Below
disbursement to A rating onboarding in
rated and above high ticket size …focus on balance between rating profile & Ticket size #
entities across Large & For TS> 100 crs, 80% +
Mid corporates in last portfolio rated A & BBB- Mar'20 Sep'22
18 months. * above

Rating Scale
AAA
+
10crs Ticket Size 1000crs
*Excluding Real Estate 19
# Includes Fund-based and Non-Fund based book for corporates
How our strategy has played so far

Re-orientation of
coverage models % < 3 year book
have enabled Consistent increase in %
% of WC Book
115
higher annuity share of working capital 142
profile of the 100
book…. 100

Mar'20 Sep'22 Mar - 20 Sep - 22

Fees composition
3%
16%
34%
22% 40% Investment Banking
Steady increase in share 16%
24% Loan Processing
of Product income* 21%
25% Foreign Exchange
38% 36% Trade & Remittances
25%

FY20 FY22 Q2'23

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*Product includes Trade, Fx and Cash Management services
How our strategy has played so far

Corporate loan growth is back on track… … as evidenced by Q-o-Q book growth… Slippages stabilized over last 12-18 months

Loan Book (₹crs)

Y-o-Y Growth 1,21,766
1,14,429 3990
1,09,463
31% 1,05,481
99,079 3509
91,018 92,407 3140
24% Fresh Slippages (₹crs)
23%
20%

1075
781

0%

Mar'19 Mar'20 Mar'21 Mar'22 Jun'22 Sep'22 Mar'21 Jun'21 Sep'21 Dec'21 Mar'22 Jun'22 Sep'22 FY19 FY20 FY21 FY22 H1'23*

*Of this, 338 crs from Standard book.

-11%

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Presentation Outline

Corporate & Commercial Banking Franchise

Fine-tuning corporate bank approach

Future in focus

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Priority for the future is ‘Scalable & Sustainable growth’ with identified growth levers

Scalable & sustainable growth

Increasing granularity & annuity orientation of the loan portfolio & income composition

Scale-up of Small
Broad-base our Focus on cross-sell Strengthening
businesses < 500
corporate coverage & RORWA liability franchise
crs

Analytics-led customer engagement & risk management

Continued focus on building digital capability across product & services

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With building blocks in place, we aim for ‘Scalable & Sustainable Growth’ going forward

30 - 35%

1
Small Businesses
…improving risk density with high quality
onboarding, minimizing credit costs
… and steadily increasing
the share of Small & Mid
corporates
Taking the

2
15 - 20% loan book …increasing returns with diversification of fee
Client Coverage growth to income through cross-sell & product fees*
Group 15-20% 46-48%
Large Corporates
y-o-y…
Mid Corporates 38-40%

3
…lowering cost of funds through granular
Small Corporates 14-16% liability franchise
10-15%
Specialized
Verticals

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*Product includes Trade, Fx and Cash Management services
THANK YOU
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