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IndusInd to focus on 4 themes

CHENNAI: The banking sector in India is expected to maintain a higher level of contribution from net interest income and other income while managing costs, according to Romesh Sobti, Managing Director and CEO, IndusInd Bank. In an interaction with The Hindu, Mr. Sobti felt that provision for NPA (non-performing assets) would be critical for banks to remain in the top league with capital induction not being a constraint.

He said domestic demand was picking up in every sector and even in the real estate sector there was keen demand for apartments below Rs. 20 lakh. The reduction in interest rates and a cut in excise duty and an increased level of activity in many sectors of the economy would see better credit off take from banks which were geared to meet the demand for funds.

Turning to the business plan of IndusInd Bank for 2009-10, Mr. Sobti said it would revolve around four themes, namely continued focus on profitability, productivity and efficiency; building customer propositions by launching more products and services; expanding footprint and brand building, Mr. Sobti said.

On the performance of bank, Mr. Sobti said the net profit of the bank had risen sharply in the fourth quarter of 2008-09 to Rs. 50.52 crore from Rs. 14.45 crore in the year-ago period and for the whole year it was nearly double at Rs. 148.34 crore against Rs. 75.05 crore in the previous financial year. Total revenue for the year stood at Rs. 915.28 crore against Rs. 598.38 crore with net interest income registering a rise of 53 per cent at Rs. 459.03 crore against Rs. 300.81 crore. The robust growth in revenue and profit was from the core banking business while there was a continued growth in fee-based income, Mr. Sobti said. The bank has recommended a dividend of Rs. 1.20 per share of Rs. 10 each.

The bank succeeded in full subscription by large institutional investors to its second GDR issue for Rs. 222 crore in June 2008. The bank raised Rs. 100 crore of Tier-II capital in March 2009.

The capital augmentation helped the bank to have a CRAR (capital to risk assets ratio) of above 12 per cent.

The bank would focus on financing of commercial vehicles and would reach the target of Rs. 10,000 crore. Besides efforts would be made to increase fee-based income, mainly by selling insurance products.

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