Introducing IDFC FIRST Bank
Founded on 18 December 2018 following
the merger of erstwhile IDFC Bank and Capital First.
• Strong systems and processes
• Launched retail liability operations,
opened 200 bank branches (Dec.
18), raised retail CASA of Rs.
2,800 Crore (Dec. 18)
• Built efficient treasury management
systems
• Strong presence in corporate and
infrastructure financing
• Launched contemporary payment
systems, internet and mobile
banking
• Launched retail lending businesses
successfully
• Strong retail franchise in niche
segments with strong credit skills
• Track record of continuous growth
• Expanded to more than 220 locations
across India supported by 102 branches
• Consistently increasing profitability (5
year CAGR at 39%) and high ROE
(15%)
• High asset quality across cycles
including increasing interest rate,
demonetisation and GST
• Customer base of over 7 million and 4
million live customers
• Strong loan assets of more than
Rs.1,04,660 Crore
• 34.26% of loans in retail segment
• Margins increased from 1.7% on
standalone to 3.3% post-merger
• Diversified asset profile
• Strong platform to grow retail deposits and
CASA
• A large retail customer base of more than
70 Lakh live customers including 30 Lakh
rural customers
Overview
Mr. V. Vaidyanathan is the first Managing Director and CEO of IDFC FIRST Bank, a bank founded by the merger of Capital First and IDFC Bank in December 2018.
Prior to this role, he founded Capital First Limited by first acquiring an equity stake in an existing NBFC, and then executing a Management Buyout (MBO) by
securing an equity backing of Rs. 810 crores in 2012 from PE Warburg Pincus. The MBO included (a) buyout of majority and minority shareholders through Open
Offer to public; (b) Fresh capital raise of Rs. 100 crores into the company; (c) Reconstitution of the Board of Directors (d) Change of business from wholesale to
retail lending; (e) Creation of a new brand "Capital First".
As part of his entrepreneurial journey, he left ICICI Group in 2010 and acquired a stake in a small start-up NBFC. He then exited legacy businesses of Real estate
financing, Foreign Exchange, Broking, Investment management businesses and instead transformed the company into a large retail financing institution with
operations in more than 225 locations across India. Between March 2010 to September 2018, he has grown the retail financing book from Rs. 94 crores ($14
million) to Rs. 29,625 crores ($4.06 billion), has grown the Equity Capital from Rs. 690 crores ($106 million) to Rs. 2,928 crores ($401.1 million) and reduced the
Gross NPA and Net NPA from 5.36% & 3.78% to 1.94% & 1.00%. Under his leadership, the Company's long term credit rating was upgraded four notches to AAA.
He joined ICICI Limited in early 2000 when it was a Domestic Financial Institution (DFI) and the retail businesses he built helped the transition of ICICI from a DFI to
a Universal Bank. He built the Retail Banking Business for ICICI Limited since its inception, and grew ICICI Bank to 1411 Bank branches in 800 cities, 25 million
customers, a vast CASA and retail deposit base, branch, internet and digital banking, built a retail loan book of over Rs. 1,35,000 crores ($20 billion) in Mortgages,
Auto loans, Commercial Vehicles, Credit Cards, Personal Loans. In addition, he also built the SME business and managed the Rural Banking Business for the bank.
These businesses helped the conversion of the institution to a universal bank renowned for retail banking.
He was appointed the Executive Director on the Board of ICICI Bank in 2006 and later became the Managing Director on the Board of ICICI Prudential Life
Insurance Company in 2009. He was also the Chairman of ICICI Home Finance Co. Ltd (2006), and served on the Board of CIBIL- India's first Credit Bureau (2005),
and SMERA- SIDBI's Credit Rating Agency (2005). He started his career with Citibank India in 1990 and worked there till 2000, where he learnt the ropes in
Consumer Banking.
During his career, he and his organization have received a large number of domestic and international awards including the prestigious, "Transformational Leader
2018" by CFI Awards UK, "Most Inspirational Leveraged Management Buyout, India 2018" by CFI Awards, "Financial Services Company of the Year, 2018 - VC
Circle", "Entrepreneur of the Year" Award at APEA 2017, CNBC Asia "Innovative company of the year" IBLA-2017, "Outstanding contribution to Financial Inclusion,
India, 2017" from Capital Finance International, London, "Economic Times Most Promising Business Leaders of Asia" 2016, 'Outstanding Entrepreneur Award' in
Asia Pacific Entrepreneurship Awards 2016, Greatest Corporate Leaders of India- 2014, Business Today - India's Most Valuable Companies 2016 & 2015,
Economic Times 500 India's Future Ready Companies 2016, Fortune India's Next 500 Companies 2016, Dun & Bradstreet India's Top 500 Companies &
Corporates 2016 & 2015. During his prior stint, awards included "Best Retail bank in Asia 2001", "Excellence in Retail Banking Award" 2002, "Best Retail Bank in
India 2003, 2004, and 2005" from the Asian Banker, "Most Innovative Bank" 2007, "Leaders under 40" from Business Today in 2009, and was nominated "Retail
Banker of the Year" by EFMA Europe for 2008. He is an alumnus of Birla Institute of Technology and Harvard Business School and is a regular contributor on
Financial and Banking matters in India and international forums.
He is a regular marathoner and has run 22 half-marathons and 8 full marathons. He lives in Mumbai with his family of father, wife and three children.
Mr. V. VaidyanathanMD & CEO
Leadership Team
Amit KumarHead – Retail Liabilities
& Branch Banking
Amit is a Chartered Accountant and is responsible for retail
banking franchise, primarily focussed on serving the banking and
wealth needs of individuals, small businesses and corporate salary
accounts. He’s had an impressive career in retail banking and
financial services, having worked with Bank of America, GE
Capital, MasterCard International and HDFC Bank.
Vikas SharmaHead – Wealth
Management Solutions
Vikas is a seasoned Financial Services and Wealth Management
professional with over 17 years of work experience. Prior to
joining IDFC FIRST Bank 3 years ago, he has worked with
organizations such as HSBC and ICICI Prudential. He is
responsible for wealth products, services, research and portfolio
management across all verticals of the bank.
Parimal ShahNational Sales Head –
Private Banking
24 years of work experience in the Private Banking - Wealth
Management verticals at HDFC Bank, Axis Bank – Burgundy
and Motilal Oswal Financial Services. He carries Strong
leadership skills and in-depth understanding of Private Banking Business.
Seasoned
Leadership team
with a collective
Experience of more
than 6 decades
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▪ Home loans
▪ Loan against
property
▪ Loan against
securities
Expansion
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Savings a/c @ 7% Fixed deposits
Money market funds
Low duration funds
0 to 6M 6M to 1Y 1Y to 3Y 3Y to 5Y 5Y & Above
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Earn Returns on Idle Savings Beat Traditional Product Returns Long Term Capital Appreciation
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Debt funds, bonds, NCDs, MLDs,
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Loan against securities and mutual funds
Solutions Across Asset Classes
Our roadmap to
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We Personalise Your Portfolio in a Few Steps
• Quarterly portfolio
reviews
• Investment objective
• Time horizon
• Risk appetite
• As per your need, suitable risk profile is assigned
• Using our proprietary asset allocation methodology VIN- Value Index Navigator, appropriate asset allocation is ascertained
• Increase equity allocation when markets are undervalued and reduce when overvalued
• In house fund selection model, back-tested for performance consistency
• Risk mitigation scores monitored on a monthly basis
• In-depth due diligence of all products across asset classes
Understanding Your
NeedArriving At The Right
Asset Allocation
Product
SelectionRegular
Checks
Objective
Increase equity exposure
when markets are
undervalued and book
profits when overvalued
Methodology
Price to earnings, Price to
book ratio, G Sec to PE ratio,
back-testing last 20 years
data
Strategy
Arrive at a valuation score
to build the right asset
allocation
Let Us Back Your Wealth Creation Journey Through Ups & Downs with our VIN
Our Model is Customised to Suit Every Risk Profile
▪ Equity allocation leads to volatility in the portfolio and hence we cap the equity exposure to portfolios for
different risk profiles
▪ However, as mentioned before, recommended equity exposure is the combination of VIN and risk profile,
as seen on the following slide
▪ VIN explanation is given in the next slide
Profile Aggressive Growth Balanced Semi-
conservativeConservative
Equity allocation (max.)
Equity allocation (min.)
100%
0%
75%
0%
50%
0%
25%
0%
0%
0%
Equity Valuations
(PE & PB ratios)
G-sec Yields
Relative To Equity
Valuations
(G-Sec – PE ratio)
Asset Allocation
Scorecard
Back-test 20 Year
Results On 5 & 3
Year Rolling
Basis
Quant-Based VIN
Approach for Equity Approach for Debt
Equity portfolios – market approach:
- Past performance
- Fund manager consistency
- Volatility (both upside and downside)
IDFC FIRST Bank enhanced filters:
- Only downside risk adjustment
- Earnings outlook for top holdings
- Target price for top holdings
Returns
Consistency
Downside
risk
Debt portfolios – market approach:
- Past performance
- Duration
- Paper quality
Yields
Duration
QualityIDFC FIRST Bank enhanced filters:
- Exclusions: e.g. unrated papers
- Leverage ratios of top holdings
- Upgrade and downgrade trends
Successful Implementation – Equity & Debt
Valuation Score(Current Highlighted)
Aggressive Growth Balanced Semi-Conservative Conservative
1 100% 75% 50% 25% 0%
2 90% 70% 45% 20% 0%
3 80% 60% 40% 15% 0%
4 70% 55% 35% 15% 0%
5 60% 45% 30% 10% 0%
6 50% 40% 25% 10% 0%
7 40% 30% 20% 5% 0%
8 30% 20% 15% 0% 0%
9 20% 10% 10% 0% 0%
10 0% 0% 0% 0% 0%
Score is as on today
VIN – Current Score
Why Us?
Asset Allocation as
per Model+4.5%Return
Equity
Fixed
Income
FY19: How VIN Model Worked For Our Clients!
Allocation
as per risk profile-5%
Return
How we got it right!
HIGH QUALITY SHORT
DURATION
❖ High bond spreads over
G-sec with rate cuts
LARGE&FLEXI-CAP
BIAS
❖ Lower volatility in large
space vis-à-vis mid and
small
Investment Strategy &
House View – Monthly
▪ Key macro factors
▪ Event specific update
▪ Equity and fixed income outlook
▪ Portfolio construction strategies
▪ Recommended products with rationale,
quants and performance
▪ Understanding of client
requirements/profile
▪ In-depth portfolio review that helps
track – asset class bifurcation,
stock/bond level exposure, sector
concentration, rating as well as
maturity profile
▪ Morningstar reports for factual data
▪ Portfolio performance tracking
Portfolio Analysis & Review
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WealthFirst- a Quarterly
Newsletter.
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