Ramesh Sobti, MD & CEO of IndusInd bank is expecting a 50 bps rate cut by the RBI. Speaking to the media after the bank announced results for Q3 FY15, Sobti said the bank’s portfolio of restructured assets was under control. Excerpts:
How did the vehicle finance book do in terms of asset quality?
The commercial vehicle book has seen an improvement in its gross and net non-performing assets (NPAs). So the gross NPAs in this book was 1.5 % which has come down to 1.44%. We had both slippages and recoveries in the vehicle finance book in the last quarter, and taking all that into account, our net slippages was Rs 18 crore.
Which all sectors contributed to the bank’s credit growth?
There is no sectoral concentration and growth was spread out across all the sectors. We were hoping a credit growth of around 24%, but the vehicle finance did not perform as well as we thought. Going forward, I think we should get to mid-20s in terms of credit growth. We have always been 10% higher than the rest of the industry in terms of credit growth.
Other than vehicle financing, which other sectors contributed to the growth?
After car loans, we have credit cards, loan against properties, business loans, personal loans and gold loans, which have grown by 7%. In the coming year, we hope this part of the book will grow 15 to 16%. So, our non-vehicle finance has grown pretty handsomely in the last quarter.
Your outlook on the restructured portfolio?
Our recast book is under control, give or take 10 basis points. We are concerned with the cost of credit which for the quarter was 17 basis points (bps). We would well be within our target of 60 basis points, for the full year.
Do you expect a rate cut in February?
RBI is focusing on fiscal deficit. The Budget will be a fair indicator of which way our fiscal deficit is heading. We may see a rate cut after the Budget. We will all be surprised if it happens in the policy meet which is on February 2. If we do have a rate cut then, it has to be 50 basis points.