We believe it is important to continue investing in Asia’s two biggest markets — China and India,” said Piyush Gupta, DBS group CEO.
DBS Bank India Limited (DBIL), the locally incorporated subsidiary of the Singapore-based DBS Bank, on Monday expressed optimism about tripling its balance sheet of Rs 50,000 crore in the next five years.
Currently, the advances of the bank are at around Rs 20,000 crore, while the deposits are nearly at Rs 30,000-35,000 crore, said the DBIL management at an event to mark its formal launch by its parent. The current and savings account (CASA) ratio of the bank stands nearly at 15-18%, the management said.
“On the back of lower CASA ratios as compared to other banks, DBIL will have lower margin in the short-term due to higher cost of deposits,” said Surojit Shome, DBIL CEO. However, the bank will see a margin expansion as there will be growth in low-cost liabilities going forward, he said. The launch of DBIL comes right after Q3FY19, when 13 out of total 18 private sector lenders reported a rise in gross non-performing assets (NPA) on a sequential basis.
The DBIL management, however, looked confident on the NPA front. “Like many other banks we have been through a period of high NPAs, but we expect to end FY19 with net NPAs less than 0.4%, with over 90% coverage,” said a member of the management team.
DBIL’s current loan book consists of corporate lending, retail lending of nearly 10%, and a slightly bigger exposure towards small and medium enterprises (SMEs) as compared to retail, said the lender. “Our aim is to get the share of our retail business, both on liability and asset fronts, to about 30% of our revenue and profitability,” clarified Shome.
Last year, the lender had launched a fully digital personal loan product on its digital banking platform DigiBank. The bank initially started its lending operations with 4.5 million customers already on its books, the lender said.
The bank will grow its home loan business, but selectively, only in cities where it wants its presence, the lender added. “As an Asian bank, it is imperative that we take a long-term view of the region. We believe it is important to continue investing in Asia’s two biggest markets — China and India,” said Piyush Gupta, DBS group CEO.