IndusInd Bank registered a net profit of Rs 346.90 crore in Q3FY14, up 30% y-o-y. The bank’s MD & CEO, Romesh Sobti, shared his views with the media on the bank’s performance during the quarter and his expectations for the rest of the fiscal.
The commercial vehicles segment is showing stress. When are you expecting a turnaround? Are you becoming more cautious in your lending to the segment?
Today, the quality of loans we’re taking on is the best. The person who takes a loan today has to be sure he has the ability to service the loan for the next 3-4 years. We are not slowing down, but the market has slowed down and our market share has certainly gone up as have the shares of the top five players.
The turnaround was expected this quarter but seems to be deferred in the sense that people are deferring purchase of new vehicles. We do expect a minor uptick in the January-March quarter and substantial a improvement should take place and could take place after the general elections.
Given the macroeconomic environment, what is your outlook on the growth in advances and deposits?
Growth in advances surprised everybody in the last three months. You saw highs of 18% growth and that is attributed partly due to the fact that commercial paper (CPs) market dried up and whatever was flowing into the CP market came into the loan growth market.
Last month, loan growth was 14.8%, so I think some of the CPs are back. So I would reckon growth would be around this 14-15% and therefore, our outlook remains in the mid 20s.
Deposit growth is actually faster than loan growth after a long time. And we were up by almost 16% last month, partly due to the FCNR inflows. So as a consequence you also saw C-D ratios have actually fallen, which means there is liquidity, although the cost of liquidity remains high.
What is the kind of demand you’re seeing from the corporate side?
What has really slowed are the new projects, we are seeing some brown field expansion happening. This is keeping our loan book growing at about 24%. If you look at the credit growth we had in the quarter, the corporate side grew faster than the consumer side. That’s because the vehicle finance slowed down. The book stays diversified and we are not seeing any