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Our approach to Business
• Vision • Build a Strong Management Team • Have a simplified structure with minimal JVs and SPVs for maximum capital adequacy
• Choose Business lines in line with our resources and capabilities • Business lines choice based on Margins, Security, Resilience to Business cycles • Maintain comprehensive product suite to meet multiple needs of same customer
for maximum customer impact and optimal productivity • Maintain Robust Processes & Controls • Maintain high level of Corporate Governance
• Maintain high quality of Financial Disclosure • Steady and Continuous growth in scale, profit and profitability 2
FCH-Vision
To capitalize on growing “consumption” in India, which is a key driver of the Indian economy. To grow into a significant financial conglomerate and build businesses of retail loans, corporate loans, Wealth Management & Equity broking. Develop a unique position of a financial services player integrated with a retail chain. To be a preferred partner in helping our clients succeed in the rapidly evolving financial markets by providing innovative product solutions, high level of convenience & service supported by robust technology.
3
People
4
FCH- Leadership
V Vaidyanathan Vice Chairman and Managing Director VC & MD
Independent Directors G N Bajpai
Shailesh Haribhakti
CEO- Retail Financial Services
CEOWholesale Credit
CFO and Head -Corporate Center
Chief Risk Officer
Apul Nayyar
Shailesh Shirali
Ashok Shinkar
Pankaj Sanklecha
(Citigroup, India Infoline)
(ICICI Bank, DSP Merrill)
(JM Morgan Stanley, Wanbury)
(ICICI Bank, Standard Chartered Bank)
N C Singhal
Anil Singhvi
Pradeep Mukherjee
K K Rathi
FCH – Management Team Mr. V. Vaidyanathan is the Vice Chairman and Managing Director of Future Capital Holdings (FCH). Prior to this, he was the Managing Director and CEO of ICICI Prudential Life Insurance Company Limited. He was earlier Executive Director on the Board of ICICI Bank, where he set up & managed the bank’s Retail Banking Business since its inception in 2000, till 2009. He was also the Chairman of ICICI Home Finance Co. Ltd, and served on the boards of ICICI Lombard General Insurance Company and CIBIL, India’s first credit bureau. He worked with Citibank India from 1990 to 2000. During his stint in ICICI Bank, took the concept of retail banking across the country through reach and technology. He built a strong retail banking business that included 1400 branches in 800 cities, 25 million customers, USD 30 billion in consumer and mortgage loans, a strong deposit base, a team of 26000 employees and took ICICI Bank to market leadership. He also built the SME and Rural Banking business for the bank. His contribution has won him and the bank many recognitions and awards in the banking industry, domestically and internationally over the years, some of which are Best Retail bank in Asia 2001, “Excellence in Retail Banking Award” in 2002, Best Retail Bank in India 2003, 2004, and 2005 from the Asian Banker, “Most Innovative Bank” 2007, and nominated for “Retail Banker of the Year” by EFMA Europe for 2008. The Retail banking Business was a key driver to help transition ICICI from a Domestic Financial Institution to a Commercial Bank.
In 2009, he was elevated as the MD and CEO of ICICI Prudential Life Insurance Co., where he grew the market share and led company to profitability. He is an alumnus of Birla Institute of Technology and Harvard Business School. 6
FCH – Management Team
Apul Nayyar, CEO-Consumer Business: Apul has been with FCH since Oct. ‘10. Prior to this, he was the ED & CEO of India Infoline Investment Services (Credit & Financing arm of India Infoline Group), CEO – Moneyline Credit, CEO & Manager – India Infoline Housing Finance. He contributed significantly to the start up and development of various business models. Prior to joining IIL, he was with DSP Merrill Lynch as Co-Head – Consumer Finance, Global Structured Finance & Investments and Co-CEO – Moneyline. He has also worked with Citifinancial Consumer Finance where he was involved in setting up of operations of different products under retails finance business, retail financial product development and administration of marketing and distribution thereof, Human Resource Management, Risk Management, Product Portfolio Management, managing treasury and investments, fund raising, etc. Overall, Apul has 14 years of experience in the financial services sector. Apul is a Bachelor of Commerce from Delhi University and a CA by profession.
Shailesh Shirali, CEO – Wholesale Credit: Shailesh jhas been with FCH since July 2008. Prior to this he was MD – Global Structured Finance and Investments at DSP Merrill Lynch Capital Limited, India. At DSP Merrill, he was responsible for the start up and building up of the on-shore and off-shore structured lending business to Indian companies. Prior to joining DSP Merrill, Shailesh was with Rabo India Finance Limited (RIF), a 100% subsidiary of Rabobank, as ED responsible for Leveraged Finance, Acquisition Finance, Telecom and Infrastructure and Structured Finance which included both on-shore and off-shore lending to Indian companies as well as originating advisory business for Investment banking and Syndication. During his 5 years with RIF from 2001 to 2006, Shailesh contributed significantly towards making the India credit business among the most profitable franchises in Rabobank Asia. Shailesh started his career with ICICI Limited where he was with the Credit Risk Group and the Structured Finance Department from 1993 to 2000. Overall Shailesh has post qualification experience of over 17 years in the financial services industry. He is a BCOM from Mumbai University and is a CA.
Ashok Shinkar, Corporate Centre Head & CFO: Prior to FCH, Ashok was on the Board of Wanbury Limited, a Pharma company. He headed finance function & also handled strategy, accounts, taxation, mergers and acquisitions and financial resources mobilizations etc. Prior to joining Wanbury, he was associated with SSKI Corporate Finance for more than 4 years as a Vice President and handled Corporate Finance Advisory; M&A; Private Equity; Debt and Equity Structuring; and Merchant Banking activities. Ashok has also worked with J M Morgan Stanley for around 7 years in the field of Investment banking activities including merchant banking, corporate and financial advisory in various sectors including power, oil and gas, infrastructure, Pharma, iron and steel etc. Ashok is a Bachelor of Commerce from Sydenham College of Commerce & Economics, Mumbai and a Chartered Accountant by profession.
Pankaj Sanklecha, Chief Risk Officer: Pankaj is a qualified chartered accountant with 15 years of experience in Retail and SME banking having held leadership positions across risk and business. Prior to FCH, Pankaj was with Standard Chartered Bank for 7 years where he was the Head of Credit for Retail Lending managing a portfolio of close to $ 2.5 billion. He was also responsible for Portfolio buyouts and sell downs and has been credited for building a stable, healthy and profitable mortgage portfolio of approx $ 2 billion at Standard Chartered Bank. He has earlier worked with ICICI Bank and GE Capital in senior risk management positions. 7
Products, Services & Distribution
8
Comprehensive Services Suite for all 4 key needs of consumers
Borrowing needs Mortgages (for SMEs) Gold Loans Consumer Durable Loans Two Wheeler Loans Home Loans Auto Loans
Distribution of : Gold Coins Property Broking Mutual Funds Structured products Real Estate Funds Equity Broking Commodity Broking Investment needs
Protection needs Distribution of : Life Insurance General Insurance Auto Insurance Health insurance Personal accident insurance Travel insurance Estate Planning- Creation of Private Trust Wills Creation Real estate Advisory Wealth Management Financial Planning
Planning needs 9
Lines of Businesses
LINES OF BUSINESSES
Loan against Gold
Consumer Durable Loans
Two Wheeler Loans
Wholesale Credit
Wholesale Loan Syndication
Wealth Management & Broking
Private & Confidential
Loan against Property
Product Suite : Demographic approach Loan against Property
Car Loans
Wealth
Broking
Gold Loans
TW
Durable Loans
Ultra HNI • Over 250 Mio • 10.5 k
HNI • INR 2.5-250 Mio • 71.2k
Mass Affluent • INR 1- 2.5 Mio • 0.18 Mln
Retail • INR 0.25- 1 Mio • 39 Mln
Mass • INR 0.1 -0.25 Mio • 45 Mln Segment •Investible Surplus •Households by 2012
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Loan Book Composition
FY 2009-10
FY 2010-11
29%
19%
FY 2012-13*
FY 2011-12*
50%
35%
50%
65%
71% 81%
We have an excellent opportunity to expand the share of retail financing franchise, which has sticky relationships and more predictable behavior. The loan book growth in the last 1 year reflects this opportunity.
Wholesale
Retail 12
* Targeted
Future Capital Branch Network
Amritsar: Jalandhar: Chandigarh: Delhi & NCR Jaipur
Ludhiana Dehradun Lucknow
Ajmer Kotta Jodhpur Udaipur Bhopal Ahmadabad Baroda
Kolkata
Rajkot Indore
Raipur Nagpur
Surat:
Bhubaneswar
Nasik Mumbai& Thane
Vizag
Pune
Hyderabad
Chennai Coimbatore
TOTAL : 125 Branches
Vellore Salem
13
Private & Confidential
Bangalore
Future Capital Branches in Stores
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1
14
Processes
15
Underwriting controls
• At Future Capital, there is segregation of authorities and responsibilities across all functions. Sales, credit, operations and collections are independent of each other, with independent reporting lines. • We underwrite all loans on the basis of cash flow capability of the customers as well as LTV norms. • Proposals are checked with credit bureaus, and loans are approved only if the customers have a clear record with India’s leading Credit Bureau, CIBIL. • A robust collections infrastructure is in place.
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Retail Lending Process- Independent Specialized Verticals. Customer Acquisition
•Advertisements / Sales Promotions
Credit Policy
• Industry Experience
• Bureau Analytics •Developer and Dealer Tie ups
Credit Underwriting
• Credit Appraisal • Income check • Profile Check • Bureau Check
• Macro Environment • Application Scorecard
•Manufacturer Tie ups
• Statistical Scorecards • Fraud Verifications
• Cross Sell
• Risk Appetite
• Corporate Tie ups
• Business strategy
• Collateral valuation / Title check
• Referral Programs
• Competition benchmark
• Legal documentations 17
Retail Lending Process (Contd.) Portfolio Analysis
•Analytics & Risk Segmentation • Bureau Usage to monitor Customer Leverage and Performance • Cross sell / top up
Loan Management
Collections
• Loan Booking on system
•Collection Strategy
• PDC / ECS banking and Archival
• Analytical models •Planning calls and visits
•Collateral ( property and RC copy ) storage in Strong room
• Planning Intensity of call • Collection Efficiency and
• Exit Strategy
•Customer Relationship / Request Management
•Productivity management •Legal recourse 18
Mortgages - Application to Approval Ratio
-7
- 39
100 -5 - 10
- 10
29
Applications
Credit Bureau Rejects
Client not meeting Cash flow requirements
Personal Interview and Reference Checks
Defective Title Deeds
Others
Disbursals 19
Provisioning Norms
20
Conservative Provisioning Norms Particulars Loans other than Mortgage Loans 90 days overdue 120 days overdue 150 days overdue 180 days overdue 360 days overdue Participation BC 540 days overdue Loss Assets
FCH Norms
10% provision 33% provision cumulative 66% provision cumulative 100% write off -
SME Mortgage Loans ( Loan against Property) and Home Loan 90 days overdue 10% provision 180 days overdue 33% provision cumulative 360 days overdue 66% provision cumulative 720 days overdue 100% write off 1080 days overdue 1800 days overdue Loss Assets -
RBI Norms
33% 66% cumulative 100% 100% write off
10% 20% cumulative 50% cumulative 100% 100% write off
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Funding Pattern
Borrowings- Sanctioned Lines
March 31st 2010
September 30th 2011
Nature of Facility
Rs Mn
Mix
Average Duration
Bank Term Loans & Cash Credit
9250
60%
3 yrs
NCD
-
Commercial Paper
6000
40%
Total
15250
100%
3-6 months
Mix
Average Duration
28000
68%
5 yrs
6000
15%
3-5 yrs
7500
17%
< 1 year
41500
100%
Rs Mn
Bank Borrowings : Facilities sanctioned by 13 Banks and FI Medium / Long Term Debentures :
Issued Rs.5140 MN of NCDs, subscribed by Banks, Mutual funds, FIs, Pension Funds, Gratuity funds and Corporates
Borrowings
Over the last 9 quarters, the Company has been successful in bringing down the cost of funds despite increase in the RBI Repo rates and Bank Base Rates
Avg utilisation of funds
Term loans CC NCD CP Total
Q110 2,701 113 33 1,334 4,181
Q210 4,328 638 845 1,029 6,840
Q310 5,990 596 1,172 1,647 9,405
Q410 5,947 751 3,778 10,476
Q111 5,978 881 5,224 12,083
Q211 6,492 1,678 1,593 6,042 15,805
Q311 7,182 1,410 4,168 5,451 18,211
Q411 6,665 1,744 5,141 6,125 19,675
Q112 9,639 3,378 5,141 5,305 23,464
Avg COF (for the quarter) Q110 12.8%
Q210 11.9%
Q310 11.6%
Q410 11.4%
Q111 11.3%
CC
8.1%
6.2%
5.8%
7.3%
NCD
9.0%
8.0%
7.9%
n.a.
CP
12.5%
12.5%
6.8%
Avg COF
12.6%
11.0%
9.9%
Term loans
Q211 11.7%
Q311 11.7%
Q411 12.4%
Q112 11.2%
8.2%
9.7%
10.5%
11.1%
11.3%
n.a.
10.6%
10.8%
10.9%
10.9%
6.8%
7.2%
7.6%
8.6%
10.1%
10.7%
9.4%
9.3%
9.8%
10.5%
11.2%
10.9%
ALM as on 30th Sept 2011
Asset Liability Maturity INR Million Outflows (A)* Inflows (B) Cumulative ( B - A )
Monthly ALM INR Million Outflows (A) Inflows (B) Cumulative ( B - A )
Oct 11-Sept 12 Oct 12-Sept 13 Oct 13-Sept 14 Oct 14-Sept 15 Oct 15-Sept 16 Oct 16 onwards 10,301 5,054 3,854 3,600 4,634 15,854 17,001 10,594 6,010 2,516 2,333 4,842 6,700 12,241 14,397 13,313 11,012 -
Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 2,192 87 550 615 1,108 4,214 2,649 1,168 506 1,032 2,021 4,583 5,201 5,092 5,015
INR MN As on Sept 30,2011 Unutilised Cash Credit 819 Unutilised Commercial Papers 3042 Total 3861
Total 43,297 43,297 -
Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 1,413 492 38 424 945 68 2,369 2,274 618 630 772 1,698 738 704 5,877 6,003 6,595 6,943 7,696 8,366 6,700 Enchancement of Short Debt Programme by Rs 2000 MN in Oct 11
Financial Updates
26
Quarter on quarter financials (Rs in mn)
Results Quarter Ending Sep 30, 2011
• Loan book increased to Rs 37.76 bn in Q2-FY12 from Rs 21.00 bn in Q2- FY 11 • PAT of Rs. 283.7 mn in Q2 - FY 12 as compared to Rs. 81.4 mn in Q2 – FY 11
• Net worth has increased to Rs 7,98 bn in Q1 FY 12 from Rs 7.58 bn in Q1-FY 11 • Gross NPA at 0.03% in Sep 2011 against 1.98% in Sep 2010. • Net NPA at 0.01% in Sep 2011 against 0.85% in Sep 2010 • Capital adequacy ratio of 19% as of Sep ’11 • The Corporate Loans, all secured by shares or collateral, have had zero Gross and Net NPA since inception. • All new retail loans bookings are only in Loan against Property, Gold Loans, Consumer Durable Loans and Two Wheeler Loan.
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Consolidated Profit & Loss ( Q on Q) All Figures In Rs. mn, Unless Otherwise Specified
Particulars
Interest Income
Q2-FY 12
Q2-FY 11
% Change
1,423.00
647.99
120%
Less: Interest Expense
870.76
408.39
113%
Net Interest Income (NII)
552.24
239.60
130%
Fee income
225.19
65.61
243%
74.53
37.67
98%
Total Income
851.96
342.88
148%
Opex
404.66
180.72
124%
Operating profit
447.30
162.16
176%
36.18
27.12
33%
PBT
411.11
135.04
204%
Tax
127.83
53.63
138%
PAT
283.74
81.42
249%
Other Income
Provision
Results Half Year ending Sep ‘12
Total Income Up 141%
Operating Profit Up 169%
PAT Up 135%
• NII increased to Rs 1061 mn in H1-FY12 from Rs 465 mn in H1-FY11. • Fee based income increased to Rs. 450 mn H1-FY12 from Rs 164 mn in H1FY11
• Total income increased to Rs 1711 mn in H1-FY12 from Rs 709 mn in H1FY11 • Opex increased to Rs. 745 mn in H1-FY12 from Rs 350 mn in H1-FY11
• PBT increased to Rs.759 mn H1-FY12 from Rs 328 mn for H1 - FY11 • PAT increased to Rs. 502 mn H1 – FY 12 from Rs. 213 mn in H1 – FY 11 30
Consolidated Profit & Loss (Half yearly) All Figures In Rs. mn, Unless Otherwise Specified
Particulars Interest Income Less: Interest Expense Net Interest Income (NII) Fee income Other Income Total Income Opex Operating profit Provision PBT Tax PAT
H1-FY 12
H1-FY 11
% Change
2,704.07 1,642.57 1,061.50 450.05 199.84 1,711.39 745.06 966.33
1,164.96 699.56 465.39 164.37 79.95 709.71 350.22 359.50
132% 135% 128% 174% 150% 141% 113% 169%
206.83 759.50 257.15 502.35
31.19 * 328.31 114.71 213.60
563% 131% 124% 135%
* Additionally Rs.19.57 cr of credit loss was debited to the Networth
NPA movement
All Figures In Rs. mn, Unless Otherwise Specified
September 30, 2011
September 30, 2010
10
416
Less: NPA Provisions
8
237
Net NPA
2
179
Particulars Gross NPA
Loan book
37,799
20,999
Gross NPA to Loan book
0.03%
1.98%
Net NPA to Loan book
0.01%
0.85% 32
Consolidated Balance Sheet All Figures In Rs. mn, Unless Otherwise Specified
As at As at September 30, September 30, 2011 2010 SOURCES OF FUNDS Net worth Loan funds Total APPLICATION OF FUNDS Goodwill Fixed Assets Deferred Tax Asset (net) Investments - In Mutual Funds -Others Current Assets, Loans & Advances Loan Book Other current assets and advances Less: Current liabilities and provisions Net current assets
Total
7,984 33,430 41,414
7,578 18,050 25,628
87 917 69
85 794 82
59 127
2,382 1,376
37,799 4,461 2,105 40,155 41,414
20,999 1,785 1,875 20,909 25,628
27
Equity
No of Shares No of Share Holders Face Value of Share
64,798,484
147,603 10
EPS- H1- FY 12
7.75
EPS- Full Year FY 11
7.64
Listed on NSE & BSE Stock Code
NSE: FCH BSE: 532938 34
THANK YOU Future Capital Holdings India Bulls Finance Centre Tower II, 15th Floor Senapati Bapat Marg Elphinston (West) Mumbai 400 013 Website www.futurecapital.in E-mail Investor Relations -
[email protected]
Telephone +91 22 40423400
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DISCLAIMER This presentation and the contents therein are for information purposes only and does not and should not construed to be any investment or legal advice. Any action taken or transaction pursued based on the basis of the information contained herein is at your sole risk and responsibility and Future Capital Holdings and/or its subsidiaries or its employees or directors, associates will not be liable in any manner for the consequences of any such reliance placed on the contents of this presentation. We have exercised reasonable care in checking the correctness and authenticity of the information contained herein, but do not represent that it is true, accurate or complete. Future Capital Holdings or any of its subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error or omission in the information contained in this presentation. The recipients of this presentation should make their own verifications and investigations to check the authenticity of the said information if they so wish. Future Capital Holdings and/or its subsidiaries and/or directors, employees or associates may be deemed to have interests, financial or otherwise in the equity shares of Future Capital Holdings. 36
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