Romesh Sobti, who will retire from the post of IndusInd Bank's Managing Director and Chief Executive Officer on March 23, said that the market's fears over the continuity of the bank's philosophy under a new chief were unfounded as its strategies are not devised by an individual.
In November, the Hinduja-backed lender had announced that it had finalised the candidate for Sobti's replacement. The lender is awaiting the banking regulator's approval on the same, which is likely to come by the end of this month. The bank's consumer banking head Sumant Kathpalia is believed to be the only name that has been proposed to the regulator.
Sobti, under whose tenure the bank saw three major business acquisitions, said that the bank has already begun working on its next phase of growth. He said that a group of 80 bank officials will be meeting next week to chalk out the plan.
"Not an individual, not even the management team, but 80 people will get together to work on the future of the bank in terms of a three-year plan" said Sobti, adding that the number has grown from five officials back in 2008 when he took over.
"Continuity of thought and action comes out of the fact that so many people buy into a certain philosophy and not individuals," said Sobti.
Sobti indicated his wish to continue to be "strongly" associated with the financial sector after he ends his 12 year stint at the bank, and dismissed any talks about being associated with the bank in any manner.
The private lender reported 32 percent year-on-year growth in profit after tax for the October-December period despite higher provisions, which was the last full quarter of business under Sobti's tenure.
The bank accelerated provisioning, which included providing Rs 240 crore against two accounts--a housing finance company and a travel company--that were recognised as fraud in the third quarter.
"We've preempted (provisioning) in terms of recognising them as frauds proactively. We've made provisions as per regulatory requirements. There may be more in the quarters to come. So it may not be one-time," Sobti said.
"Individual banks can take the decision to classify as fraud and that is what we have done. Now, if others follow or not follow, we have to see. We're the first to declare" Sobti said while refering to the housing finance company account.
Also, Sobti said that the net slippages were slightly high as "a particular travel related account" was recognised in the third quarter.
The bank's slippages increased significantly to Rs 1,945 crore in third quarter, up from Rs 1,102 crore in the previous quarter. The bank's provisioning coverage ratio rose to 53 percent in third quarter, up from 50 percent in the previous quarter, and 43 percent in the same period last year.
It's asset quality improved for the quarter that ended on December 2019, with gross non-performing assets (NPA) falling to 2.18 percent, down from 2.19 percent in previous quarter. Net NPAs also declined to 1.05 percent during the quarter against 1.12 percent in the previous quarter.
However, the bank clocked healthy credit growth of 20 percent and deposit growth of 23 percent in the third quarter. The credit growth was driven by 44 percent jump in loans given to microfinance sector, Sobti said.
"Microfinance loan growth that had slowed down in second quarter due to floods in some areas, is back to full momentum in third quarter," Sobti said.
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