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Investor Presentation
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Tracking the India Growth StoryMeeting Diverse Customers Needs
Unique Franchise in the Indian Banking Sector
Key Business Initiatives
Financial Highlights
Value Proposition
1
Contents
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Tracking the India Growth Story
Private Consumption Strong distribution network and retail customer franchise Equally well positioned in urban and rural markets Leading player across retail loan categories
Government Large tax collector for the Government of India
Significant provider of cash management services for publicsector and semi government undertakings
Investment Leading working capital banker to capital goods
manufacturers Term Loans for capex and brown field expansion Project financing to strong and established players Debt syndication team in place
India GDP*
2
*Source CSO GDP at Market Prices at current prices
FY Fiscal year ended March 31
` - Rupees
` . Tn
InvestmentGovernment
Private consumption
0
10
2030
40
50
60
70
80
90
100
FY 2010 FY 2011 FY 2012
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Tracking the India Growth StoryMeeting Diverse Customers Needs
Unique Franchise in the Indian Banking Sector
Key Business Initiatives
Financial Highlights
Value Proposition
3
Contents
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Wide Range of Products and Customer SegmentsLoan Products:
Auto LoansRetail Business Banking Personal LoansCredit Cards2-Wheeler LoansCommercial Vehicles FinanceConstruction Equipment FinanceHome Loans / MortgagesLoans against SecuritiesTractor and Agri loansEducation LoansGold Loans
Other Products / Services:
Depository AccountsMutual Fund SalesPrivate Banking Insurance Sales (Life, General)NRI ServicesBill Payment ServicesPOS TerminalsDebit CardsGold SalesForeign Exchange ServicesBroking (HDFC Securities Ltd)
Deposit Products:
Savings AccountsCurrent AccountsFixed / Recurring DepositsCorporate Salary Accounts
Commercial Banking:
Working Capital Term LoansBill CollectionForex & DerivativesWholesale DepositsLetters of Credit Guarantees
Transactional Banking:
Cash Management Custodial ServicesClearing Bank ServicesCorrespondent Banking Tax CollectionsBanker to Public Issues
Key Segments:
Large CorporateEmerging CorporatesFinancial InstitutionsGovernment / PSUsSupply Chain (Suppliers and dealers)
AgricultureCommodities
Products / Segments
Foreign ExchangeDebt SecuritiesDerivativesEquities
Other Functions:
Asset Liability Management Statutory Reserve Management
Complete Suite of Products to Meet Diverse Customers Needs
Treasury
WholesaleBanking
RetailBanking
4
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Total Deposits Gross Advances Profit Before Tax
5
Indian GAAP figures. Fiscal Year ended 31 st March; ` - Rupees
Gross advances and Profit Before Taxes classified as per RBI guidelines for segmental reporting (Basel II).
Other Banking Operations Segment (which includes Credit Cards, Third Party Product sales etc.) has been added to the Retail Segment
Business Mix
Customer segments - main drivers of net revenues
Well balanced loan mix between wholesale and retail segments
Higher retail revenues partly offset by higher operating and credit costs
Equally well positioned to grow both segments
` . Bn ` . Bn ` . Bn
0
1,500
3,000
2010 2011 2012
Retail Wholesale
0
1,250
2,500
2010 2011 2012
Retail Wholesale
0
50
100
2010 2011 2012
Retail Wholesale
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Tracking the India Growth StoryMeeting Diverse Customers Needs
Unique Franchise in the Indian Banking Sector
Key Business Initiatives
Financial Highlights
Value Proposition
6
Contents
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Strong National Network
All branches linked online, real time
Anytime, Anywhere, Anyhow banking
75% branches outside the top 9 cities
Customer base of 26 million
Branch classification
Mar 09 Mar 10 Mar 11 Mar 12
Cities 528 779 996 1399Branches 1412 1,725 1,986 2,544
ATMs 3295 4,232 5,471 8,913
Metro36%
Urban34%
Semi
Urban22%
Rural8%
Mar '09
Metro28%
Urban27%
Semi
Urban36%
Rural9%
Mar '12
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0
1500
3000
2010 2011 2012
Time Savings Current
Total Deposits Core CASA Ratio Average Saving Balance per Account
Healthy proportion of CASA (current & savings) deposits
Floats from multiple transactional banking franchises
Continued growth in new customer acquisitions Provides customer base for ongoing cross-sell through branches
Quality growth rather than mere numbers
` . Bn
Indian GAAP figures. Fiscal year ended 31st March
Core CASA ratio based on daily average balances for the year
` - Rupees
8
` .
High Quality Deposit Franchise
0%
26%
52%
2010 2011 20120
25,000
50,000
2010 2011 2012
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Amongst the lowest deposit costs in the industry Healthy margins relatively stable over rising & declining interest rates
Average yields supported by higher proportion & product mix of retail loans
Indian GAAP figures. Fiscal year ended 31st March
9
Low Funding Costs Healthy Margins
4.35% 4.25% 4.22%
0.00%
2.50%
5.00%
2010 2011 2012
Net Interest Margin
4.66%4.30%
5.72%
0.00%
3.50%
7.00%
2010 2011 2012
Cost of Deposits
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Indian GAAP figures. Fiscal year ended 31 st March; FY - Fiscal Year ended 31 st March.
* Profit / (loss) on sale and revalua tion (mark to market) of the Government Bond portfolio etc.& includes miscellaneous income
` - Rupees
10
Strong Non-Funded Revenues
Other Income (non-funded revenues) at 30% of Net Revenues in FY 2012
Composition of Other Income in FY 2012: Fees and commissions 82%,
FX and Derivatives Revenues 22%,
Loss on sale of Investments (3%)
Multiple sources of fees &commissions:
Banking charges (Retail & Wholesale)Retail Asset FeesCredit card FeesThird party product salesCash management
Trade FinanceDepositary chargesBullion salesCustody
` . Mn
-2,000
27,000
56,000
2010 2011 2012
P/L on Investments*
FX & Derivatives
Fees & Commission
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The charts above cover only transactions initiated by our own customers and which could have been transacted at the Banks br anches.
Transactions such as (a) SMS alerts sen t to customers, (b) point of sale (POS) transactions, and (c) transactions by holders of other
banks cardholders have therefore been excluded.
% Customer Initiated Transactions by Channel
ATMs
40%
Branches43%
PhoneBanking
14%Internet
2%Mobile
1%
2001
Multiple Delivery ChannelsGreater Choice and Convenience for Our Retail
Customers
Regionalized Processing Units Derive Economies of Scale
Electronic Straight Through Processing Reduce Transaction Costs and Error Rates
Data Warehousing, CRM, Analytics Improve Sales & Credit Efficiencies, Cross-sell
Innovative Technology Application Provide New or Superior Products
2012
11
Leveraging Technology
ATMs30%
Branches18%
PhoneBanking
12%
Internet38%
Mobile2%
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NPA% to Advances Loan Loss Provisions ` . Bn
Amongst the best portfolio quality (wholesale & retail) in the industry
Strong credit culture, policies, processes
Specific provision cover (excluding write-offs, technical or otherwise) at 82% of NPAs,
total provision coverage of over 100%
Restructured loans formed 0.4% of the Bank's gross advances as on March 31, 2012
Indian GAAP figures. Fiscal year ended 31 st March.
Net Non Performing Assets (NPA) = Gross NPA less specific loan loss provisions
` - Rupees
12
Healthy Asset Quality
0
14
28
2010 2011 2012
Gross NPAs Specific Provision General Provision
1.43%
1.05% 1.02%
0.31%0.19% 0.18%
0%
1%
2%
2010 2011 2012Gross NPA % Net NPA %
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0
26,000
52,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Net Profit
13.5
17.0
22.1
0
13
25
2010 2011 2012
ROA
` . Mn
EPS
1.53% 1.58%1.77%
0%
1%
2%
2010 2011 2012
Indian GAAP figures. Fiscal year ended 31st March
* 10 year Compounded Annual Growth Rate
EPS for the year 2010 & 2011 has been recomputed to give effect of the share split from ` 10 to ` 2
113
Consistent Financial Performance
` .
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Tracking the India Growth StoryMeeting Diverse Customers Needs
Unique Franchise in the Indian Banking Sector
Key Business Initiatives
Financial Highlights
Value Proposition
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Contents
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Leading provider of electronic banking services for supply chain management (SCM)
Structured cash management-cum-vendor/distributor finance
CorporateDealers
DistributorsOEM Customers
Vendors
` . Bn Wholesale Advances
Indian GAAP figures. Fiscal year ended 31st March; Total wholesale advances are as per the RBI guide lines for segmental reporting (Basel II).
Others includes Capital markets and commodity finance, and other consumer loans over `. 50 million.
FIG Financial Institutions and Government group, CV/CE Large ticket commercial vehicle and construction equipment loan ` - Rupees
115
Accessing Multiple Segments
Leveraging relationships with large & emerging
corporates for multiple revenue streams
Focus on house banking
Balanced mix between working capital financing,term loans and transactional banking
Well diversified loan portfolio across major industry segments
0
500
1,000
2010 2011 2012
Others
CV / CE
Business Banking
FIG
Emerging Corporate
Corporate
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0
850
1,700
2010 2011 2012
Primary Settlements Accounts(Stock Exchanges)
0
14,000
28,000
2010 2011 2012
Gross Cash Management Volumes * Nos.
Clear market leader : cash settlements on stock & commodities exchanges
Leading provider of cash management solutions Large corporates and SME
Financial Institutions
Government (including tax collections)For the Fiscal year ended 31st March,
* Gross Cash Management Volumes adjusted for collections on account of IPOs
` - Rupees
` . Bn
116
Focus on Transactional Banking Opportunities
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0
6,000
12,000
2010 2011 2012
FX & Derivatives Revenues
Revenues Largely customer driven, low reliance on trading revenue
Treasury advisory services Plain vanilla FX offerings to retail and business banking segments
FX and derivatives product sales to corporate and institutional customers
Indian GAAP figures. Fiscal year ended 31st March; ` - Rupees
Corp Corporate, ECG Emerging Corporate Group, BB Business Banking, FIG Financial Institutions & Government Group;
Others includes Capital Markets and Commodity Finance
` . Mn
117
Customer Focused Treasury Products
Corp18%
ECG10%
Retail54%
BB6%
FIG4%
Others8%
Customer Revenues Mix
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Well diversified product mix
Balancing volumes and market
share with margins and risk
Home Loans* (Mortgage) offering
origination (loan sanctions) nowaround ` 8 Bn per month
Loan losses within product pricing
parameters
` . Bn
Retail loans are net of loans sold and include loan assignments. Retail loans are classified as per RBI guidelines for segmental reporting (Basel II).
In arrangement with HDFC Ltd., Others includes Tractor Loans, Loans to Self Help Group, Retail overdrafts, Loans against Se curities, etc
Indian GAAP figures. Fiscal year ended 31st March; ` - Rupees
118
Retail Loans Profitable Growth
AutoLoans
BusinessBanking
CommercialVehicles
PersonalLoans
HomeLoans
Others
Credit CardsGold Loans
Two Wheelers
0
600
1,200
2010 2011 2012
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0
35
70
2010 2011 2012
Market leader in credit card (5.6 mn cards as of Mar 12)
Around 70% of new credit cards issued to internal customers
Loss rates at cyclical lows in FY2012, well within the range priced in
Merchant acquiring over 180,000 POS terminals, 44% growth in thru-puts
Number of Cards Credit Cards Receivables Acquiring Thruputs
Indian GAAP figures. Fiscal year ended 31 st March. ` - Rupees
FY 2012 Fiscal year ended 31 st March 2012
POS Point of Sale
` .Bn ` .Bn
Mn
119
Cards Achieving Scale
0
11
22
2010 2011 2012
Debit cards Credit cards
0
250
500
2010 2011 2012
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0
13
26
2010 2011 2012
Insurance Premium
Life General
0
600
1,200
2010 2011 2012
Mutual Fund Sales
Steady performance in a challenging, volatile environment
New regulation and change in product mix adversely impacted fees
Relationship managers for private banking and high net worth segments
Branch sales process to drive distribution of third party products
Indian GAAP figures. Fiscal year ended 31st March
` - Rupees
20
Distribution of Third Party Products
` .Bn ` .Bn
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Banking on Rural India
LocalGovernment
Self HelpGroups
FarmersIntermediaries
(Arhatiyas, traders)
FoodProcessors
Individuals
Pre and Post Harvest Credit
Tractor Loans
Kisan Cards
Small Working Capital Loan
Regular / No frills savings accounts
Term / Micro deposits
Life and General Insurance
Payment ecosystem
Banking Services for the rural eco-systemthrough customised loan and deposit
products whilst maintaining credit standards
Other banking products
Liability Products
Sustainable Livelihood Banking
Loan Products
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HDFC Securities Limited
Amongst the top retail equity brokerages in the country Over 180 branches and 1.4 million customers
Revenues from brokerage as well as distribution of financial products
FY 2012 - Net Profit : ` 541 million
HDB Financial Services
NBFC catering to certain customer segments not served by the Bank
Inherently lower cost structure
Network size of 180 branches
FY 2012 - Loan book : ` 39,641 million, Net Profit : ` 511 million
22
Subsidiary Companies
` - Rupees
FY 2012 Fiscal year ended March 31, 2012
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Tracking the India Growth StoryMeeting Diverse Customers Needs
Unique Franchise in the Indian Banking Sector
Key Business Initiatives
Financial Highlights
Value Proposition
23
Contents
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Indian GAAP figures ( ` Mn) , ` - Rupees;
*On sale and revaluation (mark to market) of investments & includes miscellaneous income
24
Key Financials
` . In million
Quarter Ended
Dec2012
Quarter Ended
Dec2011
Change
NineMonthsEndedDec 12
NineMonthsEndedDec 11
Change
Year Ended
Mar 2012
Net Interest Income 37,988 31,160 21.9% 110,146 89,084 23.6% 122,968
Fees & Commissions 14,019 11,276 24.3% 37,544 30,382 23.6% 42,755
FX & Derivatives 2,580 3,656 -29.4% 8,087 8,137 -0.6% 11,388
Profit / (loss) on Investments* 1,390 (732) 1,104 (1,001) (1,706)
Net Revenues 55,977 45,360 23.4% 156,881 126,602 23.9% 175,405
Operating Costs 25,741 21,580 19.3% 75,123 61,230 22.7% 85,901
Provisions & Contingencies 3,072 3,292 -6.7% 10,874 11,389 -4.5% 14,372
Tax 8,573 6,191 38.5% 22,520 16,843 33.7% 23,461
Profit After Tax 18,591 14,297 30.0% 48,364 37,140 30.2% 51,671
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Net profit up by 30.0% to ` 18.6 Bn
Gross advances increased by 24.2% to ` 2,432 Bn
Deposits up by 22.2% to ` 2,841 Bn
CASA ratio at 45.4%
Net Interest Margin at 4.1%
Core Cost-to-income ratio at 47.1%
Gross NPA / gross advances at 1.0%
Net NPA / net advances at 0.2%
Capital adequacy ratio (CAR) - total 17.0% of which tier I at 10.9%
25
Indian GAAP figures (Bn =Billion); ` - Rupees
Net NPA = Gross NPA less specific loan loss provisions
Comparisons are with respect to corresponding figures for the quarter ended December 31, 2011
Financial Highlights - Quarter ended December 2012
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Tracking the India Growth Story
Meeting Diverse Customers Needs
Unique Franchise in the Indian Banking Sector
Key Business InitiativesFinancial Highlights
Value Proposition
26
Contents
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Value Proposition Healthy Growth, Low Risk
Healthy balance sheet andrevenue growth
Leveraging organic andinorganic growth
opportunities
Proven ability to generateShareholder Value
Branch Sales Process,Data Mining & CRM,geared for Cross sell
Strong Risk management,
focus on asset quality
Disciplined margin andcapital management with a
focus on ROA/ROE
Nationwide network, withexpanding semi urban and
rural footprint
Growing economy /banking industry,
Gaining market share
Leading (Top 3) player across multiple products
Wide Product range and
multiple customer segment
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Certain statements are included in this release which contain words or phrases, such as will, aim, believe, expect, will continue, anticipate, estimate, intend, plan, future, objective, project, should, and similar expressions or variations of these expressions, that are forward -looking statements . Actual results may differ materially from thosesuggested by the forward-looking statements due to certain risks or uncertainties associated with our expectations withrespect to, but not limited to, our ability to implement our strategy successfully, the market acceptance of and demand for various banking services, future levels of our non-performing loans, our growth and expansion, the adequacy of our allowance for credit and investment losses, technological changes, volatility in investment income, our ability to market new
products, cash flow projections, the outcome of any legal, tax or regulatory proceedings in India and in other jurisdictions weare or become a party to, the future impact of new accounting standards, our ability to pay dividends, the impact of changesin banking regulations and other regulatory changes in India and other jurisdictions on us, our ability to roll over our short-term funding sources and our exposure to market and operational risks. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what may actually occur in the future. As a result,actual future gains, losses or impact on net income could materially differ from those that have been estimated. Our forward looking statements speak only as of the date on which they are made and we do not undertake any obligation, and we donot intend, to update or revise any forward looking statements to reflect events or circumstances after the date in thestatement, even if our expectations or any related events or circumstances change. In addition, other factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this document include, but are not limited to: general economic and political conditions, instability or uncertainty in India and other countrieswhich have an impact on our business activities or investments caused by any factor including the global financial crisis and
problems in the Eurozone countries, terrorist attacks in India, the United States or elsewhere, anti-terrorist or other attacks
by the United States, a United States-led coalition or any other country, tensions between India and Pakistan related to theKashmir region, military armament or social unrest in any part of India, the monetary and interest rate policies of thegovernment of India, natural calamities, inflation, deflation, unanticipated turbulence in interest rates, foreign exchangerates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in Indianand foreign laws and regulations, including tax, accounting and banking regulations, changes in competition and the pricing environment in India, and regional or general changes in asset valuations.