Banking PPT of PSB Bank of India with P&S

Banking

1. Industry Vs P&SB

2. SWOT- Strength and Weakness
CBS- Finacle 10
Srei Recovery 1200 Crore in 2024
Floating: 80%, EBLR: 35%
DTA & MAT Credit: >2000 Crore
Standard assets: >93%
NCLT Provision: 3690 Crore (PCR 90%)
Co-Lending (Non-Priority Sector)
Customer Base - 1.35 Crore
Digital Transactions: >80%
App rating: 4.2
App Registration 6 Lakh (5%)
MTM on Treasury: 126 Crore in Q4 (52)
SMA: <380 Crore
Bulk Deposit: <30%
Wage Revision Provision: 57 Crore in Q1
Agricultural Income Reversal in Q4, PSL 50%
At 12th Place in PSB in terms of Size

GNPA: 5400 Crore (8200)

Tier II Credit Rating: AA-

CASA: 34%

Restructure Book: 2600 Crore (GECL- 900)

Insurance & MF Partner

3. SWOT- Opportunity and Threats
RFP- Fintech Collaboration

Branch Expansion: 320 to 770 District
& Rationalization in North

Branch in Canada, NE and Kashmir

Srei Recovery 1200 Crore in 2024

Co-Lending (New Partner)

App Registration to atleast 25% Customers

2nd Hand Vehicle Loan, Trade Finance

QIP Placement

SLR to Non SLR: Diversified AA/ AAA, CD
Food Inflation: MTM & Agricultural

New ECL Provision Norms

Top 20 Advances: 25%

Presence in mostly North and 320 District

Bank Consolidation by GOI

Threat from Fintech Platforms

Threat from NBFC: PFC, IREDA, LIC Hsg F

CBDC / OCN / ONDC / Open Banking /
Account Aggregator

4. Way Forward
Branches in Canada, NE & Kashmir
CBS 10
API Library and onboarding of all Payment and Co Lending App
Tab Banking / Online Current Account / Video KYC
BC / RM of atleast 2000 specifically for SME and mid Corporate
SME & Mid Corporate Branches in Metro and Big Towns
Skill Development specifically in Treasury and Forex
Mobile registration of atleast 25% Customers with Active usage
1 Branch in all 780 District.
Yield on Investment atleast 1% higher than Repo by Non SLR high rated secured
Capital Raising - QIP
Wealth Management to attract NRI deposit

5. 1.4% Increased by
45 bps YoY
Q1FY24 results: Banking industry snapshot

₹183.5L Crore
14% YoY
Total Deposits

₹48.8L Crore
15% YoY
Corporate Advances

₹44.4L Crore
20% YoY
Retail Advances
1

₹139.7L Crore
17% YoY
Total Net Advances

41.02%
256 bps YoY
CASA Ratio

48.0% Reduced by
325 bps YoY
Cost-Income

₹4.9L Crores
38% YoY
Total Income

₹1.9L Crore
27% YoY
Net interest income

₹65.9K Crore
60% YoY
Non-Interest Income

₹74.0K Crore
69% YoY
PAT
Business
Key Ratios
Profitability

3.7% Reduced by
203 bps YoY
GNPA (%)
1. Retail loans include home loan, auto loans, personal loans, and other retail loans
ROA

7. 1. All the above #s are as a % of average assets; 2. Pre-provision profit may not tally due to rounding off differences
Analysis has been made based on 33 Banks: 12 PSBs, 10 Private-New, 8 Private-Old Banks and 3 Small Finance Banks
Source: Capitaline, Press releases
PSBs Private New Private Old SFBs Industry
Banking Industry profitability improved during the Q1
Driven by growth in interest & fee income, treasury gains and lower provisioning

Particulars
1

UoM

Q1FY24

Q1FY23

Q1FY24

Q1FY23

Q1FY24

Q1FY23

Q1FY24

Q1FY23

Q1FY24

Q1FY23
Net interest Margin (%) 2.9 2.6 4.4 4.0 3.5 3.2 7.7 7.9 3.5 3.1
Fee + Other Income (%) 1.0 0.6 1.6 1.4 1.2 0.8 1.8 1.5 1.2 0.9
Operating expenses (%) 1.9 1.7 2.8 2.5 2.6 2.3 5.9 5.9 2.3 2.0
Pre-Provision Profit
2
(%) 2.0 1.5 3.3 2.8 2.1 1.7 3.7 3.5 2.4 1.9
Credit costs (%) 0.6 0.8 0.5 0.5 0.4 0.6 0.3 0.8 0.5 0.7
Tax (%) 0.4 0.2 0.7 0.6 0.4 0.3 0.8 0.7 0.5 0.3
Return on Assets (%) 1.0 0.5 2.0 1.7 1.3 0.8 2.5 2.1 1.4 0.9
RoA Tree
Key Performance Indicators

8. TDandReporatedifferentialnarroweddownas
banks pass on interest rate hikes to mobilize deposits
Note: WALR is Weighted Average Lending Rates on fresh loans and WATDR is Weighted Average Domestic Term Deposit Rates on outstanding
deposits; All figures at an aggregate industry level
Source: RBI
160
bps
129
bps
121
bps
Repo Rate
Weighted
Average Lending
Rate (Industry)
Weighted Avera
Term Deposit
Rates (Industry)
5.1
4.9
Jun’22
8.2
5.2
5.4
Jul’22
8.3
5.3
5.4
Aug’22
8.6
5.4
5.9
Sept’22
8.7
5.5
5.9
Oct’22
8.9
5.6
5.9
Nov’22
8.9
5.8
6.3
Dec’22
9.0
5.9
6.3
Jan’23
9.2
6.0
7.9
Feb’23
9.3
6.2
9.2
6.3
6.56.56.5
Jun’23Mar’23
Average Lending Rates Average Deposit Rates Repo Rate
Increase in rates
since June 2022
Consecutive repo rate pauses
expected to stabilize TD rate hikes
Lending and Deposit rate (%)
Key Performance Indicators

9. Return on Equity
2
by bank category Return on Assets
1
by bank category
FY21 FY22 Q1FY23 FY23 Q1FY24
(%)
PSBs Private New Private Old SFB Industry
Key Performance Indicators
Industry ROA and ROE maintain an upward trajectory
Absolute profits for PSBs doubled in Q1FY24; Pvt Banks share in industry net profit down to 52% vs. 64% YoY
1
Return on Assets is calculated as net profit/average assets
2
Return on Equity is calculated as net profit/average shareholders' fund
Analysis has been made based on 33 Banks: 12 PSBs, 10 Private-New, 8 Private-Old Banks and 3 Small Finance Banks
Source: RBI; Capitaline; Press releases
FY22 Q1FY23
12.4
FY23FY21

2.5

2.0

1.5

1.0

0.5

2.3




1.2


0.6
0.6




1.6
1.5

0.9
0.7
0.5


2.1

1.7


0.9
0.8
0.5


2.1

1.6

1.1
1.1
0.8
2.5

2.0


1.4
1.3
1.0

20


15


10


5

18.5




10.5

7.7
7.5

4.6



13.2
12.4
10.5
9.0
8.8



16.2
14.1

10.9
10.6
7.8


16.7
14.0
13.7
13.1
19.8
16.8
16.3
15.8
15.7

0.0
0.3
0

Q1FY24

10. 21
20
20
19
17
1818
17
1716
18
17
16
17
161616
17
1616
1514
26
18
17
16
17
15
14
13
27
22
21
CSB
Karur Vysya
DCB
South Ind.
Karnataka
J & K
Federal
Dhanlaxmi
Ujjivan
Equitas
AU
9%
Kotak Mah.
IDBI
Bandhan
HDFC
ICICI
Yes
IndusInd
Axis
IDFC First
RBL
Bank of Maha
PSB
Canara
UCO
Indian
Bank of India
BOB
IOB
Union
PNB
SBI
Central Bank
Banks capitalization remain at comfortable levels
Source: Capitaline, Investor presentation
Minimum
requirement
Credit
Growth
(%)
172081618722222621 311619145172115 343429261514271311201814161523
Private New banks PSU banks Private Old banks SFB
Capital to Risk-weighted assets ratio (%) (Jun '23)
Key Performance Indicators

11. Price to book ratio (As on 30th June 2023)
Private Banks continues to command premium valuation vs. PSBs
Source: Capitaline
4.4
2.4
2.0
1.6
0.8
Private New Banks
Kotak Mah. Bank
Axis Bank
IndusInd Bank
IDBI Bank
Yes Bank
1.2
RBL
1.6
1.2
0.9
0.6
Private Old Banks
CSB Bank
Federal Bank
DCB Bank
South Ind.Bank
367
HDFC Bank 3.4 952

ICICI Bank 3.3 654
304
107
59
27
5
Market Cap (INR in '000 crores) (as on 30
th
June 2023)
47
2.1
1.7
1.5
1.4
1.4
1.0
1.0
0.9
0.8
I O B
SBI
P&SB
UCO Bank
BoM
BoB
Central Bank
Indian Bank
Canara Bank
PSU Banks
11
4
4

4.6

1.9

1.9


Small Finance Banks
AU
Equitas
Ujjivan
50
10
7
46
511
98
33
25
55
19
22
36
Key Performance Indicators
Select Banks

12. 40


20
Slight softness in credit growth; while deposits continue to inch up
Analysis has been made based on 33 Banks: 12 PSBs, 10 Private-New, 8 Private-Old Banks and 3 Small Finance Banks
Source: RBI; Capitaline; Press releases
Credit growth by bank category Deposits growth by bank category
Growth % yoy Growth % yoy
Market share (%) Market share (%)
PSBs 62% 61% 61% 61% 61%
PVT-N 34% 35% 34% 35% 35%
PVT-O 4% 4% 4% 4% 4%
SFBs 1% 1% 1% 1% 1%
Business: Advances & Deposits
PSBs 67% 66% 66% 65% 65%
PVT-N 28% 29% 30% 31% 31%
PVT-O 4% 4% 4% 4% 4%
SFBs 0% 1% 1% 1% 1%
8
0
10
30
40
27
34
19
17
16
14
2
10
5
3
FY21
29
19
18
18
18
26
17
13
11
31
18
17
16
17
FY22Q1FY23FY23Q1FY24
PSBs Private New Private Old SFB Industry
9
11
42 37 38
34
32
0
20
40
60
17
12
9
9
FY21
6
8
15
10
8
8
15
10
FY22Q1FY23
16
12
11
FY23
18
14
14
Q1FY24

13. 140


100

20



-20
CASA growth YoY by bank category (%)Term Deposits growth YoY by bank category (%)
Growth % yoyGrowth % yoy
Analysis has been made based on 33 Banks: 12 PSBs, 10 Private-New, 8 Private-Old Banks and 3 Small Finance Banks
Source: RBI; Capitaline; Press releases
CASA continued under pressure as YoY growth declined to 7% from 11%
Business: Advances & Deposits
-20
0
20
100
132
25
20
18
15
FY21
8
19
12
12
Q1FY23FY22
7
4
4
28
10
6
FY23
5
-2
112
94
16
11
11
12
11
7
Q1FY24
Term deposits continued to attract liquidity due to deposit repricing
PSBsPrivate NewPrivate Old SFB Industry
25.3
24.0
39.7
47.4
20
40
140 60
0
3.1
24.3
11.4
7.9
6.8
FY21
10.8
5.4
4.3
7.0
2.2
5.0
18.0
15.0
9.0
21.7
16.9
16.1
13.5
FY23
18.5
15.5
Q1FY24
2.0
FY22Q1FY23
Market share (%) Market share (%)
PSBs 66% 64% 64% 63% 63%
PVT-N 30% 32% 32% 34% 33%
PVT-O 3% 3% 4% 3% 3%
SFBs 1% 1% 1% 1% 1%
PSBs 69% 67% 67% 65% 65%
PVT-N 27% 28% 29% 30% 30%
PVT-O 4% 4% 4% 4% 4%
SFBs 1% 1% 1% 1% 1%

14. Certificate of Deposits outstanding (Rs '000 crore)
Banks continued issuing CDs as credit growth
sustains amid high rates
200
300
400
100
72
62
86
64
57
201
249
241
294
280
305302
312
Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-23-
20 20 21 21 21 21 22 22 22 22 23 Jun
128
Source: RBI, Prime Database
Banks may prefer to offer higher
interest rates on CDs for shorter
periods of time in order to mobilize
resources.
This contrasts with offering higher
interest rates on fixed deposits for
longer periods of time.
Banks expect the rate-setting
monetary policy committee to begin
reducing the repo rate starting in
the fourth quarter of FY24.
0.4 0.4 0.4 0.3 0.4 0.9 1.1 1.2 1.4 1.4
CD as %
of total

0.4
assets
1.3
Business: Advances & Deposits

15. Indian Banking
Industry GNPA
at a decadal
low
Analysis has been made based on 33 Banks: 12 PSBs, 10 Private-New, 8 Private-Old Banks and 3 Small
Finance BanksSource: RBI; Capitaline; Press releases
0
5
10
1.9%
8.5%
FY20
9.1%
4.7%
5.8%
5.0%
7.4%
FY21
7.3%
3.7%
4.9%
4.1%
5.9%
FY22
6.9%
3.7%
4.8%
3.4%
5.7%
Q1FY23
5.0%
10.3%
3.5%
2.2%
2.1%
5.4%
FY23
4.6%
5.5%
3.9%
2.2%
2.1%
3.7%
%
15
Q1FY24
3.5%
PSBs Private New Private Old SFB Industry
Gross Non-Performing assets (%)
NPA and Risk Management

16. Reduction in NPAs levels seen across banks & bank categories
Driven primarily by write-offs and lower slippages
Source: Investor Presentation, Analyst Report
Gross Non-Performing assets (%)

19.9
13.5
7.3
2.2
14.9
11.311.3
10.2
9.39.1
7.4
7.0
6.3
3.7
5.1
2.0
6.8
4.1
3.4
3.22.8 2.8
2.4
2.01.9 1.8
1.3
1.2
5.0
6.8
7.7
7.3
6.7
8.1
7.1
5.5
4.5
5.2
3.5
3.9
2.8
2.3
IDBI
Yes
Bandhan
RBL
ICICI
Axis
IndusInd
KotakHDFC
Central
P&SB
PNB
Union
BOIIOB
Indian
UCO
Canara
BoB
SBI
BOM
PSU Banks
Jun’22 Jun’23
Private New Banks
Select Banks
NPA and Risk Management

17. BOM
Indian
I O B
Union
BOB
BOI
PNB
SBI
UCO
PSB
Canara
Central
Dhanlaxmi
J & K
CSB
Karur Vysya
Federal
South Ind.
DCB
Karnataka
Ujjivan
AU
Equitas
83
80
78
75
71706968
48
90
88
818079
7776
IDBI
ICICI
Axis
Kotak Mah.
HDFC
IndusInd
RBL
Bandhan
IDFC First
Yes
74
73
71
66
80
77
7575
71
6564
62
98
69
58
71
Healthy coverage against NPAs across banks
1. All the above PCR% are excluding Technical write-offs and have been calculated as (GNPA-NNPA)/GNP
Source: Capitaline, Investor presentation, Press release
Provision coverage ratio
1
(%) (Jun '23)
Select Banks
Private New Banks
NPA and Risk Management
316 233 539 205 -141 -289 -566 609 -2359 1260 1231 578 986 258 -147 1105 -23 635 -673 437 -1074 2074 801 798 600 543 1255 630 1470 -61 -260 933
YoY
Change -323
(bps)
92
Q1FY24:
77%
Q1FY23:
73%
PSU Banks Private Old Banks
Small Fin.
Banks

18. Note: 1.Digital Tablet based account opening process for Q1 FY24; 2.Issuance through Phygital mode; 3. Based on all financial transactions by individual
customers in Q1FY24 4. Opened through YONO 5.MF/PL sales through YONO- Annual 6. E2E Digital
Source : NPCI, Investor presentations, Analyst reports
Volume of MB
Transaction and YoY
growth
FD sourced digitally
SIPs initiated digitally
Credit Card issued
digitally
70%
1
vs. 68%
1
95%
3
vs. 93%
72% vs. 68%
76% vs. 42%
84%
2
vs. 81%
2
55% vs. 52%
Personal Loans sourced
digitally
Saving Account sourced
digitally
98% vs. 87%
NA
58% vs. 66%
NA
61%
89% vs. 71%
NA
59%
60% vs. 60%
63% vs. 78%
78%
6
vs. 84%
60%
6
vs. 94%
63%
4
vs. 65%
4
NA
NA
~INR 332 Cr
5
vs. ~INR
650 Cr
5
214K+ cards vs. 60k
cards
~INR 5.4k Cr vs. ~INR
4.4K Cr
98% vs. 30%
93% vs. 92%
NA
98% vs. 98%
97% vs. 90%
74% vs. 54%
Select Banks
Q1FY24 vs. Q1FY23
Digital in Banking
Continued push on digital banking across banks
Banks are adapting digital banking by adding more branches and repositioning it as advisory centers with
a digital-first mindset

19. Key Regulatory Measures
Key Recent Regulatory Measures
RBI to withdraw 1 trillion rupees
via incremental CRR
This would be done through a temporary increase in the amount of funds lenders set aside with
the central bank, as it tries to keep a lid on inflation. This measure also intends to absorb
liquidity added to the banking system due to a return of 2,000-rupee denomination notes
RBI to develop web portal for
public to search unclaimed
deposits across banks
About Rs 35,000 crore unclaimed deposits as of February 2023 were transferred to RBI by
public sector banks (PSBs) in respect of deposits which were not operated for 10 years or
more. In addition, it is also proposed to put in place a compensation mechanism for delayed
updation/rectification of credit information. Detail guidelines are yet to be issued

Framework for acceptance of
Green Deposits

Regulated entities (REs) can accept green deposits denominated only in rupees and allocate
the proceeds to eligible green activities/projects. It is only in the case of bulk deposits that
banks have the flexibility to offer interest rates higher than the card rates. So, banks may
pitch the green deposits to bulk depositors.


RBI to enable UPI payments
through AI conversations
RBI proposed to introduce and enable UPI-based payments through AI-powered conversations,
that will enable users to engage in a conversation with an AI-powered system to initiate and
complete transactions in a safe and secure environment. Also, to promote the use of UPI-Lite,
it is proposed to facilitate offline transaction using Near Field Communication (NFC)
technology
Source: RBI, Press search

20. Moderate growth across most high-frequency indicators vs last year
Slowdown witnessed across exports, imports & 2 wheeler consumption; uptick in EV registrations
Note: EV registrations incl. E-bus, E-car, electric 3W, electric 2W, electric 3W cargo sales, others
Source: DBIE, NPCI, IRDAI, AMFI, GIC, Life Insurance Council of India
Latest
Month
Vs.
Last year
Vs.
Last month

Industry
Jun’23Jun’22 YoY May’23 MoM
IIP (Index) 145.0 137.7 5% 140.0 4%
Power Consumption (‘000 MUs) 4.6 4.5 4% 4.4 6%
Petroleum Consumption (MMT) 19.3 18.7 3% 20.0 -4%
Steel Consumption (MMT) 9.9 8.9 12% 10.3 -4%
Cement Production (MT) 36.5 30.1 19% 36.5 0%

Trade & Investment
Merchandize Exports ($ Bn) 33.0 37.9 -13% 35.0 -6%
Merchandize Imports ($ Bn) 53.1 63.6 -16% 57.0 -7%
Services Exports ($ Bn) 27.1 24.8 9% 25.0 8%
Services Imports ($ Bn) 15.9 16.1 -1% 14.0 13%

Logistics
E-way Bills (Mn) 86.0 74.5 15% 88.0 -2%
JNPT Traffic ('000 TEUs) 476.0 493.0 -3% 528.0 -10%
Rail Freight (Mn Tons) 134.0 132.0 2% 126.0 6%
Air Freight (K Tons) 270.1 271.1 0% 269.0 0%

Latest
Month
Vs.
Last year
Vs.
Last month

Auto
Jun’23Jun’22 YoY May’23 MoM
PV Sales ('000 Units) 337.9 332.0 2% 341.6 -1%
Tractor Sales ('000 Units) 106.6 107.0 0% 91.3 17%
2W Sales ('0000 Units) 160.4 170.4 -6% 173.2 -7%
EV Registrations ('000 Units) 101.8 73.3 39% 157.2 -35%

BFSI
UPI Value (INR Tn) 14.8 10.1 46% 14.9 -1%
NSE & BSE Txns.(INR K C r) 1417.31044.0 36% 1402.6 1%
Insurance Premium (INR K Cr) 57.3 49.0 17% 42.0 36%

Sentiment
Manufacturing PMI (Index) 57.8 53.9 7% 58.7 -2%
Services PMI (Index) 58.5 59.2 -1% 61.2 -4%
Current Situation Index 89 76 17% 87 2%
Future Expectations Index 116 113 3% 116 0%

Macro indicators

21. 1.Mutual funds Assets Under Management (AUM) represented as recorded at end of every month shown. Mutual Funds AUM include investments from individuals (50.5%) & institutions
(49.5%); institutions include domestic and foreign institutions and banks; 2. Aggregate deposits & credit latest available for May'23 3.Non-Life Insurance includes Fire, Marine, Motor,
Engineering, Health, Cop Insurance, Credit Guarantee, Aviation, Personnel accident and Miscellaneous
Source: DBIE, NPCI, IRDAI, AMFI, GIC, Life Insurance Council of India
Jan-22Mar-22Jun-22Sep-22Dec-22Mar-23Apr-23Jun-23
49
57
10.1
14.8
10
5
0
Jan-22 Mar-22
9.4
5.9
Jun-22Sep-22Dec-22Mar-23Apr-23Jun-23
150
167
191

100 123
144
Jan-22 Mar-23Jun-22Sept-22Dec-22Mar-23Apr-23Jun-23
0
40
45
Jan-22 Mar-22
35.6
Jun-22 Sep-22 Dec-22 Mar-23 Apr-23
44.0
Jun-23
Volumes (INR Bn)
Aggregate deposits & credit (INR Tn)
Deposits and Credit grew 14% and 17% YoY in Jun’23 respectively
Aggregate Deposits Aggregate Credit
Insurance premium (INR '000 Cr.)
Life Insurance premium rose 16% YoY in Jun’23
Life Insurance PremiumNon Life Insurance Premium
UPI
UPI value & volume rose 47% and 60% YoY in Jun’23 respectively
5
Value (INR
Tn)
Mutual funds AUM (INR Tn)
Mutual funds AUM witnessed a tremendous growth of 24%
YoY
Most BFSI indicators showcased robust growth over June 2022
India is performing well on multiple economic and policy parameters, albeit some concerns around inflation persist
Macro indicators