NPAs improved drastically in FY09; now at 1%: IndusInd Bank

Commenting on the bank's plan to raise funds via a qualified institutional placement (QIP), Sobti said, "There is no need to fuel balance sheet via a QIP issue ." However, he added, the timing and pricing of the QIP is yet to be decided. Also, he said, the bank was in the process to appoint a merchant banker for the QIP.

Here is a verbatim transcript of the exclusive interview with Romesh Sobti on CNBC-TV18. Also watch the accompanying video.

Q: Take us through the numbers. You have a good performance of 65% higher net interest income and a fairly sharp quadrupling of net profit. How much of this is other income and how much of this is core business?

A: I think if you see the revenue increase overall, it is about 150%. But even if you take out the so-called one-offs, I think without that as well we have shown a growth of about 60%. So, this revenue has really been fueled both by net interest income, where I think our margins have improved pretty handsomely and also the core fee income. The core fee income out of insurance or FX or pure hygiene products has also shown pretty handsome growth. FX for instance has grown by 40-45% and insurance has grown by another 40-45%. Thus, I think there has been pretty all around performance. But more satisfying is the fact that our NIMs have improved. Traditionally, they have been low.

Q: We don't have your NIMs yet. What did you do by way of margins?

A: YoY, NIMs went up from 1.68% to 2.60%. Return on assets also went up to 1.27%. So, a lot of it has also surpassed our own expectations. But all the parameters have actually gone up. The most satisfying thing for us is the fact that even in this environment we have got our NPAs down even further.

Even sequentially, you will see that we ended last year at 1.14% and we are now at 1%. Compared to last year, of course, there has been a very significant improvement in the quality of the book.