M Anandan

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CholamandalamInvestment Finance Co.
Ltd. Business Performance Overview

• M Anandan
• Managing Director

2
Contents

• Business overview
• Product Mix
• Distribution
• Funds
• Spreads
• Growth in Financials
• Results of I Half 2005-06
• Looking Ahead

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Cholamandalam Highlights

• Among the leading domestically owned NBFCs
• Asset base of over Rs.2000 crores
• Focused on automobile finance
• Rs.1200 crores of Disbursements per annum

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A Focused Retail Finance Company
Product Mix

• Automobile Finance accounts for 85 of assets
• Corporate Mortgage Finance limited,
  profitable presence
• About 10 of assets
• Select clientele
• High quality assets

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Automobile Finance Focus on Core Products
Product Mix

• Commercial Vehicles is the focus
• Leader in 3-wheelers, LCVs

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Specific Focus areas in each segment
Product Segments
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All India strong in South, West North

Distribution

• Present in 120 locations across India
• 40 own branches
• Over 50 of disbursements in West and North
• Focus on B C towns

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Diverse Actively Managed
Source of Funds

• Total funds of over Rs.2000 crores
• Highest Credit Rating for short-term debt
  ABS(P1, AAA(so))
• Long Term Debt rated LAA with positive outlook
• Diversified sources for risk management
• Robust ALM processes

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Maintained by product mix, low-cost funds and low
operating cost
Spread
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Disbursements
Growth 2001-05

• CAGR 21

Rs. Crores
Annualised
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Assets
Growth 2001-05

• CAGR 22.5

Rs. Crores Includes Securitised Assets
Annualised
12
Profits
Growth 2001-05

• CAGR 21.5

Rs. Crores
Annualised
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HighlightsFirst Half of 2005-06
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Growth in Disbursements
H1 FY 06

• Overall Growth 22
• HCV Growth 30
• LCV Growth 24

Rs. Crores
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Costs Controlled
H1 FY 06
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Improved Quality of Assets
H1 FY 06

• Lower delinquencies in originations of last 18
  months
• Reduction in repossession levels
• Drop in early default

NPAs as of Risk Weighted Assets
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Spreads Impacted
H1 FY 06
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Profits
H1 FY 06

• Higher PBT includes gain on sale of investments
• Growth of 14
• Focus on Used Vehicles Finance for better yields
• Now at around 27 of disbursements

Rs. Crores
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Subsidiaries
H1 FY 06

• Performing well
• 60 Growth in Income
• Contribution to PBT increased from loss of Rs.
  320 lakhs (H1 05) to Rs. 69 lakhs (H1 06)
• AMC assets up from Rs.1025 crores in April 05
  to over Rs.1700 crores

Rs. Lakhs
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First Half 2004-05 A Summary
H1 FY 06
Includes gain on sale of investments
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Initiatives for Long Term health
The Challenge
H1 FY 06

• Pressure on spreads due to intense competition

The Response

• Continuous Review and Revision of Product Mix
• More 3-wheelers
• Commenced new products with higher spreads
• Used Car Finance
• Further reduction in Loan Losses
• Leveraging existing customer base for cross
  selling
• Continuous management of resources to ensure low
  cost of funds
• Geographic expansion for sustained top-line
  growth - Commenced business in East

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Looking Ahead
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Automobile Finance Sustain Growth
Profitability by building key strengths
Sales

• Nationwide Distrbn.
• Mfr Dealer Relationships
• Credit Origination

Risk Cost Management
Customer Service

• Strong Recovery Systems
• Disciplined Management of all Risks
• Effective Cost Control

Managing Growth

• Transaction Processing
• CRM
• Technology

Funds

• High Credit Rating
• Low cost of funds
• Treasury Capability

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Future Revenue Growth
Automobile Finance

• Achieve growth while maintaining optimal yield
• Maintain leading position in LCVs, 3-wheelers
• Increase share of used vehicles finance

New Products in Retail Finance

• Launch other Retail Finance products in JV with
  DBS Bank

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Cholamandalam DBS Plans

• Effectively leverage the strengths of both
  partners
• DBS Products, Processes
• Cholamandalam Distribution, Brand
• Enter and scale-up in new products
• Personal loans
• Home Equity
• Mortgage Finance
• Leverage the association to enhance capabilities
  in raising funds at lower cost
• Build a powerful financial services franchise and
  brand

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Cholamandalam A Summary

• A large, all-India player focused on Automobile
  Finance
• A well-established track record of growth with
  prudence
• Pursuing quality growth in association with DBS
  Bank

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• Certain of the statements included in this
  presentation may be forward looking statements
  made based on managements current expectations
  and beliefs concerning future developments and
  their potential effects upon Cholamandalam and
  its subsidiaries. There can be no assurance that
  future developments affecting Cholamandalam and
  its subsidiaries will be those anticipated by
  management. These forward-looking statements are
  not a guarantee of future performance and involve
  risks and uncertainties,and there are important
  factors that could cause actual results to
  differ,possibly materially,from expectations
  reflected in such forward-looking statements.
  Cholamandalam does not intend,and is under no
  obligation, to update any particular
  forward-looking statement included in this
  presentation.

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Thank You.