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Presentation on New Banking License Roadmap for NBFCs

XIMB, PGDM (II year)


Gokul V

Subhradeep Mitra Sukant Bisoi

Profit and Marketing


Profits expected to reach Rs. 1361 crores
The year on year growth graph is shown and details
mentioned in the excel sheet provided.
The marketing plan would be essentially to play
upon ABCFL which already is a trusted brand name
in the market.
The emphasis would be to market it through
channels visible in rural markets which in future
slides well see as the primary market for the firm
The mediums of IMC include leaflets, Radio ads,
Road Shows, and to a lower extent through State
based TV channels as the viewership for the same
would be higher.

Marketing(Cont)
The service levels and easiness of
operation would lead to greater viral
publicity which in future would be the
bread and butter of the firms marketing.
Lastly to initiate ATMs into hitherto
unknown markets, specifically rural areas
will also increase visibility
Though the bank would look for a rural
emphasis, it would also make sure its
technologically competent.

Distribution Plans

Urban Mix
Rural Mix

The branch penetration


should be 40:60 skewed
towards the rural segment.
Reasons:
The Existing cities where
ABCFL is present can be
used as hubs to cater to
spokes that will be rural in
nature
Most established players
have a huge presence in the
urban segment
RBI guide lines require that
25% of new branches open
in rural segment.

Branches

Branches Increase
800
600
400
200
0

Branches
Increase

Loan Book after 5 Years

Rural Penetration will provide


greater deposits as the SB a/c
from rural markets are in general
terms greater than Urban Areas.
A greater emphasis will move
towards housing, personal and
commercial vehicle loans as these
will be in greater demand in the
rural areas
Infrastructure finance, currently
the bread and butter should move
to a lesser percentage as the risks
associated with the same are very
high with respect to options that
would be available.
Mortgages would also play a major
role even in the future as risk to
return ratios are higher.

Loan Book Split


Corporate Finance
SMEs
Mortgages
Commercial
Automotive
Personal
Housing
Infrastructure Finance

12%
14%
18%
12%
15%
8% 13% 8%

Financial Strategies
In brief
CASA to be maintained at around 25% at the end of
five years.
Reasons:
1. Rural populace will have huge SB a/c
2. Large penetration focused on rural areas.
3. Fast paced growth in existing markets and lessening
dependency on infra loans

Deposits to grow at 30% year on year.


Reasons:
1. The target would be to create capital in rural areas that can
be dispersed in the semi urban and rural areas itself.
Hence greater viral publicity in the markets increasing
deposits and thereby sustaining the 30% growth.

Financial Strategies
Loan Growth Rates:
Though loans are going to rise, the rise will
be skewed towards retail loans for the
customers
Lesser intensified towards infrastructure, as
the risk is greater in this area.
Assumed to be 14% based on global trends
and existing growth rate of business

Risk Anticipated and Mitigation


Strategies
New Entrant into the market; would over come
this shortcoming through aggressive marketing.
Possibility of losses in the future: Plans
established to prevent the same from
happening; plans flexible to entertain the same.
Branch network building would determine the
growth: If branch growth does not work out as
anticipated, projected financials can drop to a
great extent.
NPAs: Rural penetration means greater chances
of NPAs as well; Securities will be ensured to
mitigate the same.

Balance sheet

total share capital


equity share capital
share application money
preference share capital
reserves
revaluation reserves
networth
Deposits
Borrrowings
total debt
total liabilities

Application of fund
Cash and balances with
reserve bank of india
balances with banks,
money at call and short
notice

Mar-12
246.16
246.16
0
0
6,737.84

Mar-13
246.16
246.16
0
0
6,956.15

Mar-14
246.16
246.16
0
0
7,222.98

Mar-15
246.16
246.16
0
0
7,547.08

Mar-16
246.16
246.16
0
0
7,938.41

0
0
0
0
0
6984.0028 7202.31360 7469.13629 7793.23850 8184.57496
4
7
9
7
3
10.00
15
26.25
52.5
105
15433.073 17285.0424 19359.2475 21682.3572 24284.2400
6
3
2
3
9
17300.0424 19385.4975 21734.8572 24389.2400
15,443.07
3
2
3
9
22427.076 24502.3560 26854.6338 29528.0957 32573.8150
4
4
2
3
6

0.60

0.90

1.58

3.15

6.30

75.52

76.02

77.15

79.77

85.02

8,748.99

8,752.74

advances
fixed assets

8,759.30
8,772.43
8,798.68
16918.4852 19287.0731 21987.2633
13018.225 14840.7765
1
4
8
192.73
267.73
342.73
417.73
492.73

other assets

391.01

564.19

investments

755.40

967.95

1,203.82

P& L
Rs crores

Mar-12

Mar-13
Mar-14
Mar-15
Mar-16
3264.9708 3722.0667 4243.1560 4837.1979
2864.01
3
46
91
43

Interest earned
other income

874.90

interest expended

1,853.17 2,076.01
2,326.26
2,608.18
2,926.71
934.727 1035.0612 1149.4992 1280.0997 1429.2664
1
08
49
1
23

operating expenses
provisions and
contingencies

net profit

875.27

875.93

877.24

879.87

951.01

1,029.18

1,122.24

1,232.12

1,361.09

profit brought forward


0 177.56
395.87
662.70
986.80

transfer to capital
reserve
2.38
2.57
2.81
3.08
3.40
transfer to statutory
reserve
237.75 257.29
280.56
308.03
340.27
transfer to investment
reserve
0.19
0.21
0.22
0.25
0.27
dividend paid and its
tax
318.2
318.2
318.2
318.2
318.2

Thank you