IndusInd Bank posted a 25% growth in its net profit in the third quarter of 2017-18, aided by a rise in its net interest income. Romesh Sobti, the bank’s managing director and CEO, pointed out that the balance sheet of the bank had crossed Rs 2 lakh crore for the first time.
He also indicated that the vehicle finance segment was set to boom. Excerpts:
Which segments are you seeing the demand coming from?
If you look at retail, vehicle finance has started moving very robustly. Non-vehicle retail book also grew 40%, but that comes off a lower base. The microfinance part has also started moving — the portfolio has now crossed Rs 3,000 crore. On the corporate book, we are seeing good traction on working capital and we are also seeing a little bit of brownfield expansion. It is pretty evenly distributed both on the corporate and the retail sides.
Please elaborate on vehicle finance…
We saw 34% increase in our disbursements on the overall vehicle finance. If you were to look at only commercial vehicles, the disbursements grew by 39%. The growth is pretty secular — two-wheelers, three-wheelers and tractor segments are also witnessing growth.
Please share details on assets and returns…
The balance sheet of the bank has crossed Rs 2 lakh crore for the first time. In spite of the growth of the balance sheet, we have seen an increase in the return on assets (RoA) and the return on equity (RoE) as well.
There is a rise in the gross NPAs. Where is it coming from?
The eight basis points’ increase in the gross NPAs is not from any one particular account. It is spread out — `20 crore is on loan against properties, a little bit on commercial vehicles and a little more on the corporate side.
Will you be raising capital in the near future?
Our capital increased during the quarter. If we grow at this rate, and unless some inorganic play happens, we don’t see need for capital for at least two years.
As far as merger with BFIL is concerned, how far have you reached in terms of regulatory approvals?
We have approval from the Competition Commission of India (CII). We are waiting for the approval of the Reserve Bank of India (RBI).
How is your diamond financing business doing?
The diamond financing business has doubled since we acquired it. There are no delinquencies and it is accretive on margins.
Has RBI completed the audit on your books? Have there been any divergences?
Our audit was completed only in late December. We have not yet received the preliminary report. It will probably happen this quarter.
By Romesh Sobti