IDFC Bank will look at acquiring 15 million customers in a matter of five years, executive vice-chairman and managing director of the latest bank in the country, Rajiv Lall, said on Thursday.
“Within the next five years, our goal is to acquire 15 million customers. Today, we have 400. We will go from 400 to 15 million customers. A bulk of these customers will come from Bharat banking and personal and business banking.
But the bulk of our profits will continue to be generated by our wholesale and commercial banking,” Lall said in an interaction with journalists.
Apart from customer acquisition, IDFC Bank will look to diversify revenues by introducing a whole range of new products and services to existing clientele. “So, whether it is working capital loans, letters of credit, bank guarantees, cash management or trade finance, we can now do all of that. That is a huge opportunity for us,” Lall said.
He asserted the bank is confident about a healthy growth in its profit after tax (PAT) every year on a y-o-y basis. “We are very confident that every year y-o-y, we will grow our PAT by 10-15%. We have seen the opportunity. We know we can do it,” Lall said.
He spoke about the bank’s interest in providing financial services to government. “We have a pretty good working relationship with the government at various levels, right from the municipality level to the state levels to the Central government. There is no reason why we cannot deliver financial services to the government like many other banks,” Lall added.
The bank is aiming at a 30% lower cost-to-income ratio than the best in the class, according to Lall, who asserted the need to invest more in technology than in branches.
“Our goal is to have less than 1/10th of the number of branches that our competitors have to reach out to the same number of customers. This will take time,” he said.
With the advent of small finance banks and payments banks, Lall said he doesn’t see them as an immediate threat.
Lall indicated that the bank will start with a large NPA, but also asserted that the provisions against those will be aggressive. The net NPAs would be between 2% and 3% when the bank starts, he said, adding that the total stressed assets, which is NPAs plus restructured assets, would be close to 15%.