FY 06-07 FY 07-08 FY 08-09

Interest Income 682 3029 8921

Interest Expense 192 662 2619
Net Interest Income 490 2367 6302
Non Interst income 14 477 1956
Fee Income 11 469 1004
Assignment income
Profit on sale of investment 1 4 15
Other income 2 4 937
Operating income 504 2844 8258
Operating expense 970 5080 6163
Operating profit -466 -2236 2095
Write offs 8 175 2037
PBT -474 -2411 58
Tax including deffered tax 100 35 45
PAT -574 -2446 13

Projected P&L Account

Particulars FY 13-14 FY 14-15 FY 15-16

Interest Income 57% CAGR 15904 24940 39110
Interest Expense 33% of Interest income 5248 8230 12906
Net Interest Income 10656 16710 26204
Non Interest income 21% of Net Interest income 2238 3509 5503
Operating income 12894 20219 31707
Operating expense -1.08% 4760 4709 4658
Operating profit 8133 15510 27049
FY 09-10 FY 10-11 FY 11-12 FY 12-13
8618 7375 8422 10142 CAGR 57%
2860 2680 3323 4259 % of Interest income 28.15% 21.86%
5758 4695 5099 5883
737 1079 1478 1704 % of Net Interest income 3% 20%
417 511 467 421
8 54 151
53 132 105 265
268 428 851 867
6496 5775 6578 7587
6354 4945 4784 4812 CAGR -1.08%
142 830 1794 2775
7312 804 1302 1259
-7170 26 492 1516
1 0 -6 0
-7171 26 498 1516

FY 16-17 FY 17-18 FY 18-19

61331 96177 150821
20239 31739 49771
41092 64439 101050
8629 13532 21221
49721 77971 122271
4608 4558 4508.997
45114 73413 117762
29.36% 33.19% 36.34% 39.46% 41.99%

31% 13% 23% 29% 29%

 2013 2014 2015 2016 2017 2018
1 Sec 37% 35% 34% 32% 30% 30%
Unsec 63% 65% 66% 68% 70% 70%
RLM 1.6x 1.7x 1.6x 1.4x 1.3x 1.2x
LAA 1.9x 2.0x 2.3x 2.6x 2.8x 3.0x
EL 3.20% 2.60% 2.30% 2.20% 2.20% 2.10%
RAR 3.30% 3.00% 3.50% 3.80% 4.20% 4.50% 3.72%
EC 12% 11% 11% 11% 12% 12% 11.50%
RAROC 28% 27% 32% 35% 35% 38% 32.27%

2 2013 2014 2015 2016 2017 2018

Sec 37% 40% 44% 47% 50% 50%
Unsec 63% 60% 56% 53% 50% 50%
RLM 1.6x 1.7x 1.5x 1.3x 1.1x 1.0x
LAA 1.9x 2.0x 2.4x 2.9x 3.3x 3.5x
EL 3.20% 2.50% 2.10% 1.80% 1.70% 1.60%
RAR 3.30% 2.90% 3.30% 3.50% 3.90% 4.20% 3.52%
EC 12% 11% 10% 10% 10% 10% 10.50%
RAROC 28% 26% 33% 35% 39% 42% 33.81%

3 2013 2014 2015 2016 2017 2018

Sec 37% 43% 49% 54% 60% 60%
Unsec 63% 57% 51% 46% 40% 40%
RLM 1.6x 1.7x 1.5x 1.2x 1.0x 0.9x
LAA 1.9x 2.1x 2.5x 3.0x 3.6x 3.8x
EL 3.20% 2.40% 2.00% 1.60% 1.40% 1.40%
RAR 3.30% 2.80% 3.10% 3.40% 3.80% 4.10% 3.42%
EC 12% 11% 10% 9% 9% 9% 10.00%
RAROC 28% 25% 31% 38% 42% 46% 34.92%

4 2013 2014 2015 2016 2017 2018

Sec 37% 45% 54% 62% 70% 70%
Unsec 63% 55% 46% 38% 30% 30%
RLM 1.6x 1.7x 1.4x 1.1x 0.9x 0.8x
LAA 1.9x 2.1x 2.6x 3.2x 4.1x 4.3x
EL 3.20% 2.40% 1.80% 1.40% 1.20% 1.20%
RAR 3.30% 2.70% 3.00% 3.20% 3.60% 3.90% 3.28%
EC 12% 10% 9% 8% 8% 8% 9.17%
27.500% 27.000% 33.333% 40.000% 45.000% 48.750% 36.93%
 2013 2014 2015 2016 2017 2018
Operating Profit 8133 15510 27049 45114 73413 117762

Scenario # 1
Particulars 2013 2014 2015 2016 2017 2018 Average
RLM 13014 26368 43278 63159 95437 141314 63762
RAR 3.30% 3.00% 3.50% 3.80% 4.20% 4.50% 3.72%
EC 12% 11% 11% 11% 12% 12% 11.50%
RAROC 28% 27% 32% 35% 35% 38% 32.27%

Scenario # 2
Particulars 2013 2014 2015 2016 2017 2018 Average
RLM 13014 26368 40573 58648 80754 117762 56186
RAR 3.30% 2.90% 3.30% 3.50% 3.90% 4.20% 3.52%
EC 12% 11% 10% 10% 10% 10% 10.50%
RAROC 28% 26% 33% 35% 39% 42% 33.81%

Scenario # 3
Particulars 2013 2014 2015 2016 2017 2018 Average
RLM 13014 26368 40573 54136 73413 105986 52248
RAR 3.30% 2.80% 3.10% 3.40% 3.80% 4.10% 3.42%
EC 12% 11% 10% 9% 9% 9% 10.00%
RAROC 28% 25% 31% 38% 42% 46% 34.92%

Scenario # 4
Particulars 2013 2014 2015 2016 2017 2018 Average
RLM 13014 26368 37868 49625 66072 94210 47859
RAR 3.30% 2.70% 3.00% 3.20% 3.60% 3.90% 3.28%
EC 12% 10% 9% 8% 8% 8% 9.17%
RAROC 27.500% 27.000% 33.333% 40.000% 45.000% 48.750% 36.93%

Highest average RAROC on portfo

 RLM = Recession loss/Average cycle operating profit.
Loss AbsorptionAbility (LAA)
Expected loss
risk adjusted return
Economic capital

Highest average RAROC on portfoli - Hence we prefer senario 4

 Personal Loan (Salaried Customers)
operating profit Recession loss
Mar Mar-13 Oct-13 RAR RLM ( in Rs) (In Rs)
Metro 4,661 4,683 6% 1 8133 8133
Tier 1 3,410 3,367 6% 1.1 8133 8946.3
Tier 2 2,020 1,989 10% 0.9 8133 7319.7
Tier 3 1,747 1,743 11% 0.9 8133 7319.7
Tier 4 4,650 4,672 9% 0.8 8133 6506.4
Total 16,489 16,455 38225.1

Personal Loans (Self Employed Customers)

operating profit Recession loss
Mar Mar-13 Oct-13 RAR RLM ( In Rs) (In Rs)
Metro 1,297 1,519 0% 2.8 8133 22772.4
Tier 1 2,432 2,725 6% 1.2 8133 9759.6
Tier 2 1,548 1,785 7% 1.2 8133 9759.6
Tier 3 1,411 1,552 8% 1.1 8133 8946.3
Tier 4 3,133 3,471 6% 1.3 8133 10572.9
Total 9,820 11,052 61810.8
Weightage
21.3% RLM= recession loss/ operating profit
23.4% ec=recession loss - expexted loss
19.1% raroc=rar/ec
19.1%
17.0%

Weightage
36.8%
15.8%
15.8%
14.5%
17.1%