IndusInd Bank will overtake its peers in the next three years, by leveraging its strong capital base that gives the bank enough headroom to lend more, Group Chairman S P Hinduja said.
DUBAI: Hindujas-promoted IndusInd Bank will overtake its peers in the next three years, by leveraging its strong capital base that gives the bank enough headroom to lend more, Group Chairman S P Hinduja said on Monday.
The bank expects 40-45 per cent hike in advances during the current fiscal, against the average loan growth of 20 per cent by most other banks.
"IndusInd Bank is now poised for rapid growth as a significantly strengthened entity... (which) will overtake its peers in the next three years, as measured by the criteria of productivity, profitability and efficiency," Hinduja, Chairman of the IndusInd International Holdings Ltd (Mauritius), said at the 15th Annual General Meeting here.
"Its Capital Adequacy Ratio, a key indicator of stability, stands at a comfortable 11.91 per cent as on March 31, 2008, well above the regulatory minimum of nine per cent," he said.
The ratio further improved to 13.16 per cent at the end of the April-June quarter of the current fiscal from 12.16 per cent in the first quarter of the previous fiscal.
While most new generation private sector banks launched in the early 90s have disappeared, IndusInd Bank has remained the sole survivor with its strong fundamentals, said Hinduja, the London-based business tycoon.
A 79 per cent jump in net interest income helped IndusInd Bank increase its profit after tax by a record 44.48 per cent to Rs 19.1 crore in Q1 this fiscal.
IndusInd Bank was floated with USD 35 million capital pooled in from Non-Resident Indians in April 1994. Its net worth stood at USD 178.17 million as of March 31, this year.
"The objective is to further ramp up the bank's operations so that the value of your investment may continue to appreciate," Hinduja told shareholders.
At present, the bank has a network of 180 branches across 147 locations in India. Besides, it has representative offices here and in London.
"The IndusInd concept of establishing a global platform to mobilise the contributions of NRIs for investment in India was appreciated and approved by Manmohan Singh, the then Finance Minister," Hinduja recalled.
He noted that the Indian authorities "open-heartedly" provided all the support and clearances enabling the entity to commission its operations in a record period of 67 days.
"After a bright start, IndusInd Bank faced operating problems as a consequence of the downturn in several sectors of the economy - discouraging some of our shareholders in the process.
"However, IndusInd Bank was able to weather the storm successfully (like many of its peer-group entities), and has now emerged as a stronger and more stable entity to make its mark in the banking space," the NRI industrialist noted.
The bank now enjoys the highest rating on its debt instruments from the leading rating agencies in India - CRISIL, ICRA and Fitch and has consistently remained profitable every single year since its inception.
IndusInd Bank, in June, raised USD 51.73 million (around Rs 222 crore) through issuance of Global Depository Receipts to ensure the growth of its balance sheet as per its business plan.
Hinduja, who heads one of the largest diversified groups in the world with interest spanning from automobile to IT to finance, said that in order to achieve the objective of reaching the top league of banks, the promoters had brought in a new management team headed by Romesh Sobti.
"The plans of Romesh Sobti and his team for the bank are essentially based on two planks, namely: building on its strengths and remedying the weaknesses," he said.
The bank boasts of state-of-the-art technology right from its inception. Owing to its multilateral tie ups with other banks, it provides its customers access to more than 18,000 ATMs. It also enjoys clearing bank status for both major stock exchanges as well as three major commodity exchanges in India.
IndusInd Bank, India's first post-liberalisation private sector bank, has proved to be number one among all banks in India under various efficiency parameters, he told the shareholders.
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