IndusInd Bank to focus on retail lending

Kochi, Feb 25 | Updated: Feb 26 2005, 05:30am hrs
IndusInd Bank is to focus on retail lending, especially the vehicle loan sector, a major shift from its corporate lending pattern, according to bank managing director Bhaskar Ghose.

He told mediapersons on Friday that from 10% a few years ago, the banks retail loan segment had a 60% share in the total advances. The focus would be on the commercial and two-wheeler segment. Despite there being high entry barriers into this sector owing to the small amounts involved and the administration costs, the bank had decided to stay concentrated in this area as it offered high growth prospects. He admitted that the acquisition of the Ashok Leyland Finance had leveraged the banks foray into this sector. It had been estimated that the two-wheeler segment would grown at 20-25% annually for the next few years and presently only 40% of the purchases was financed. On the home loan front, the bank had a Rs 400 crore portfolio. The bank hoped to have a retail sector loan advance of Rs 9,500 crore by the end of this fiscal, he added.

About branch expansion, he said the bank would have 132 branches by the end of this fiscal and would take this to 212 by October.

The bank would lay stress on NRI-concentrated states and would be raising its branch strength in Kerala from 10 to 14 by October. During this fiscal, the bank had a deposit of Rs 200 crore in the state and advances were Rs 370 crore when the average CD ratio of banks in the state was a mere 48%. The banks old IT division had been turned into a subsidiary and was taking up contracts outside. This was expected to help the bottomline, he added.