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Exim Bank reports 62% growth in profit Corporate loan book records 49% y-o-y growth; loan assets grow by 17%

May 13, 2024 | Mumbai

India Exim Bank’s Managing Director, Ms. Harsha Bangari, and Deputy Managing Director, Mr. Tarun Sharma, announced the Bank’s results for the financial year 2023-24 at a press conference in Mumbai on Monday, May 13, 2024. Key highlights of the Bank’s performance during 2023-24 are as under:

FINANCIAL PERFORMANCE

Parameter Performance in 2022-23 Performance in 2023-24 Change over 2022-23
A. Total Business (₹ cr) 2,92,257 3,44,182 17.77%
– Net Loan Portfolio 1,34,523 1,57,602 17.16%
– Total Borrowings 1,28,423 1,54,611 20.39%
B. Operating Profit (₹ cr) 3,599 3,750 4.20%
C. Profit After Tax (₹ cr) 1,556 2,518 61.83%
D. Gross Non-Performing Assets 4.09% 1.93% (216) bps
E. Net Non-Performing Assets 0.71% 0.29% (42) bps
F. Capital to Risk Assets Ratio 25.43% 21.18% (425) bps

BUSINESS PERFORMANCE

The Bank reported significant growth across key business performance parameters, reflecting the commitment to support India’s trade and investment, and developmental priorities of partner countries. Evincing India’s strong growth story and the increased credit demand, the Bank sanctioned fresh loans aggregating ₹ 1,06,312 crore. The loan portfolio grew by 17% in FY2023-24, driven by strong growth in sectors such as clean and renewable energy, automotive, engineering goods, pharmaceuticals, and telecommunications. The Bank also witnessed growth in strategically important sectors mainly e-mobility, high-tech, and aerospace. Net interest income (NII) increased by 4.6% to ₹3,540 crore for the FY2023-24, primarily on account of higher increase in interest income from loans and advances. In terms of the Non-Performing Assets (NPAs), with the improvement in asset quality and reduction in incremental slippages, the Gross NPAs declined significantly from 4.09% as on March 31, 2023 to 1.93% as on March 31, 2024, and the Net NPAs declined from 0.71% as on March 31, 2023 to 0.29% as on March 31, 2024
POLICY BUSINESS
The Bank supported a wide range of developmental projects in partner countries through the Lines of Credit (LOCs) extended at the behest of the Government of India (GOI). As on March 31, 2024, the Bank has a portfolio of 324 GOI-supported LOCs with credit commitments aggregating US$ 31 billion. These LOCs are supporting socio economic development in partner countries, while facilitating access to new markets and opportunities for Indian companies. As on March 31, 2024, 952 contracts valued at nearly US$ 16 billion have been covered under LOCs, creating opportunities for over 300 Indian companies, and benefitting a multitude of MSMEs in the value chain. During FY 2023-24 alone, the Bank supported 21 new contracts valued at over US$ 1 billion.

The Bank has progressively enhanced efficiency of systems and processes related to LOCs through greater transparency at the pre-qualification stage; dedicated cross-functional committees to approve procurement-related activities as well as for review of Detailed Project Reports (DPR); engagement of sector experts for inputs on technical aspects in vetting of DPRs; standardisation of documents such as terms of reference for preparation of DPRs and model bidding documents; and improved governance mechanisms such as complaint redressal mechanism and debarment policy.

COMMERCIAL BUSINESS

During FY 2023-24, the Bank extended ₹ 98,014 crore for building export capacities, enhancing export competitiveness and supporting globalisation efforts of Indian companies. The corporate loan book recorded a growth of 49% during the year, while maintaining strong asset quality with nearly 90% of the portfolio above investment grade. The Bank supported 90 project export contracts valued at ₹ 43,695 crore in 34 countries, propelling India’s project exports to new heights. Further, 24 corporates were sanctioned funded and non-funded assistance of more than ₹ 6,739 crore for their overseas investments in 12 countries. So far, the Bank has provided finance to 700 JV/WOS, set up by 510 Indian companies in 78 countries.

SUPPORT TO MSMEs

Exim Bank’s recent initiatives are playing a crucial role in bridging the market gaps for the MSME sector, ensuring that viable project or enterprise are able to mitigate challenges due to perceived risks or market inefficiencies. The Bank’s Trade Assistance Programme (TAP) is bridging the financing gaps in trade transactions by providing an effective bridge between local banks in partner countries and banks in India. Launched in 2022, the Bank has already partnered with over 80 overseas banks under TAP. As on March 31, 2024, the Bank has supported 506 transactions under TAP across 33 countries, leading to more than US$ 1.1 billion of incremental exports to new or challenging markets, by over 125 exporters based in 42 cities across 16 states. To further bridge the financing gaps, Exim Bank has also set up its subsidiary in GIFT City, India Exim Finserve IFSC Pvt. Ltd. Announced in the Union Budget 2023 and set up on August 8, 2023, the subsidiary offers a range of trade finance products to exporters, including factoring.

Further, under its Ubharte Sitaare Programme (USP), the Bank is nurturing and empowering small and mid-sized companies that have potential advantages by way of differentiated technology, products or processes, but may currently be underperforming or lacking the ability to tap their latent potential. As on March 31, 2024, under USP, the Bank has extended financial support of ₹ 1,214 crore (including 5 equity investments) to 62 entities. Among the companies supported under USP, there are 11 with innovative solutions for promoting sustainability, 20 are leading the way in cutting-edge technology, 10 are revolutionising healthcare, while others are engaged in e-mobility solutions, specialised intermediate goods, software solutions, high-quality products for global brands, etc. The Bank has developed strong partnerships with leading academia and provided technical assistance to incubators of IIT Bombay, IIT Delhi, IIM Ahmedabad and IISc, Bangalore for scaling up and nurturing early-stage companies.

RESOURCES AND TREASURY

The Bank raised resources (INR and Foreign Currency) aggregating ₹ 74,768 crore, including foreign currency resources of US$ 3.26 billion equivalent during FY 2023 24. The Bank is rated Baa3 (Stable) by Moody’s, BBB- (Stable) by S&P Global Ratings, BBB- (Stable) by Fitch Ratings and BBB+ (Stable) by Japan Credit Rating Agency. All these ratings are of investment grade or above and are the same as the sovereign rating.

FOCUS ON SUSTAINABILITY

During the year, the Bank issued two sustainable bonds under the Bank’s ESG Framework through private placements aggregating US$ 200 million and its first Green Floating Rate Bond of US$ 150 million under the ESG Framework.

The Bank also introduced a new lending programme, Sustainable Financing Programme to finance green, transition, social and sustainability linked investments of eligible borrowers, and has provided support to several projects under this programme. A key transition project financed by the Bank was for setting up a 200 MW Round-The-Clock (RTC) renewable energy project, which will support decarbonisation plans of one of the country’s largest integrated zinc producers. This project has been awarded ‘The Project Finance International (PFI) Award’.

PROMOTIONAL & DEVELOPMENTAL ROLE

Exim Bank’s initiatives are enabling grassroots enterprises, even those located in the most remote areas of the country, to make forays in the international markets. In alignment with the Districts as Export Hubs initiative of the Government of India, the Bank has identified 64 districts for interventions, including 5 districts from the Northeastern States of India. During FY 2023-24, the Bank supported the district-level export capacities through grants for – setting up a cutting-edge 3D design studio in Khurja, UP which would modernise processes for the ceramic industry and benefit 300 units employing 15,000 workers; enabling participation of flower exporters in an exhibition in Amsterdam for direct access to buyers and also providing refrigerated vans for minimising post-harvest losses; and equipping turmeric farmers in Sangli with machines for improvement in hygiene and quality of the produce, among others. Beyond financing support, the Bank has also been supporting capacity building of grassroots enterprises through skill development workshops and training programmes. As on March 31, 2024, the Bank has provided over 139,000 person-days of training to artisans, farmers and weavers.

The Bank is also committed to provide wider visibility, brand promotion and market access for the grassroots enterprises. During FY 2023-24, the Bank partnered with the Kala Ghoda Arts Festival 2024 as a presenting sponsor. Over 200 artisans and grassroots enterprises from various states participated in the festival, with Exim Bank sponsoring more than 60 artisans from 24 states.

During the year, Exim Bank published 20 research studies with focus on countries/region, export potential of Indian states, industries and topics of relevance to international trade. Further, the Bank supported informed decision making, by providing crucial inputs to the Ministry of Commerce and Industry, Government of India for negotiations of Free Trade Agreements.

SOCIAL INITIATIVES

During the year, Exim Bank supported 16 initiatives spread across 12 states of India. The Bank contributed to enhancing access to education and essential nutrition for students from underserved communities through its support to the Akshay Patra Foundation for procurement of two CNG vehicles in Varanasi, Uttar Pradesh for transportation of mid-day meals to students. Further, the Bank engaged with SankalpTaru Foundation, an IT-enabled NGO for plantation of trees. The Bank has planted 2,650 trees through SankalpTaru, through which 81.9 tons of CO2 would be sequestered per year. The Bank also supported technical training of 200 women for facilitating their employment in non-conventional areas, such as bike mechanics and electricians.

 

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