TRANSACTION BANKING

What is transaction banking?Transaction banking are services that are offerings which

includes commercial banking products and services for corporate clients and financial institutions, including domestic and cross border payments, professional risk mitigation for international trade and the provision of trust, agency, depository, custody and related services.

On the income side superior transaction banking solutions are a combination of very low funding costs, moderately high fee income, low risk provisions, low operating costs, and low risk-asset weightings.

The next slide shows some of the banks with world wide presence with theirs transaction banking offerings.

TRANSACTION BANKING OFFERINGS ACROSS BANKS

STANDARD CHARTERED

o Cash Management

o Trade finance and supply chain finance solutions

o Security Services

o RMB Settlement

CITIBANK

o Cash Management Services

o Trade Services

o Securities services

ICICI BANKo Roaming

Prepaid and Trade Current Account

o Trade o Collectionso Payments

YES BANKo Cash

Management Services

o Trade Financeo Capital

Markets and Escrow Account Services

Why is transaction banking important for a bank?

Transaction banking key benefits

THE PLAYING FIELD – PAYMENTS AND TRANSACTION SERVICES

TRANSACTION BANKING REVENUE VOLUMES

Transaction Banking Future – forces at work and implications

Transaction Banking Future

BANK IN FOCUSHIGHER ROA

CONSISTANT EARNINGS DESPITE

REGULATORY OR ECONOMIC

FLUCTUTATIONS

STRATEGIC BRANCH

NETWORK

RETAIL TB FEE

INCOME

LOWER DEPENDENCE ON LENDING

BASED EARNINGS

HIGH CASA

LO

W C

OS

T O

F

FU

ND

S

HDBK compared to peers

Axis Bank relies heavily on corporate fees generated, which are lumpy. A large portion of the corporate fees are generated from corporate guarantees where growth is slow in weak business cycles