The aim is to rejuvenate growth in the near future, says IndusInd Bank CEO

WDo you see business growth picking up again?

There has been a significant change in the team, both on the assurance and business sides. By March 31, much of that will be done and a brand new team will be in place. So the team’s intention is to rejuvenate growth, not only for this year but also for the near future. Our ambition is to grow assets and liabilities in line with the market in FY27 and start gaining market share in FY28. To then dominate in some of our focus areas in the third year. This is what the next three-year plan will broadly look like.

WWhat would be the gap between secured and unsecured loans?

Let me put it a little differently. The auto finance business is about ₹1 lakh crore, the corporate lending business is about ₹1.3 lakh crore, and the microfinance business is about ₹20,000 crore, and all other retail businesses are about ₹50,000 crore. So to that extent we have a great opportunity to grow our SME loans. We see opportunity in increasing collateralized retail advances such as gold loans, affordable housing, etc. We do not have a target for the mix of secured and unsecured loans as such.

Our largest share of unsecured loans consists of micro loans. We want to continue to grow the microloan portfolio and expect it to represent 7 to 8 percent of our loan portfolio. We also understand that these loans are cyclical in nature and that is why we have started using the credit guarantee scheme. Currently, 38 percent of the microloan portfolio is covered by the credit guarantee scheme and we expect this to be fully covered by the scheme next year. The microloan segment also helps us comply with PSL guidelines, both for agriculture and for small and marginal farmers. Further, slippages in the micro-lending segment of the industry have declined over the past year.

Credit cards are a very large part of our portfolio and are a crucial tool for maintaining engagement with our existing customers. To that extent, we indeed intend to grow this segment. We will grow this segment cautiously as the risk in the industry appears high. There’s a difference now in the way we build our credit card business. Previously a predominant part of business came from new customers to banking customers, now we focus on building business based on serving existing customers. Every month we add approximately 150,000 customers to the bank, which gives us a great opportunity to engage with this customer base. The breadth and offering we have on the credit card side, both in the mass and affluent segments, is very good. We are confident that we can grow this business.

How do you plan to reduce the share of bulk deposits?

For any bank, especially IndusInd, building a detailed retail liability franchise is absolutely crucial. We have the brand and distribution of just over 3,000 locations nationwide. In the specific context of our bank, this becomes very crucial because we also have quite a large liability franchise where we have bulk deposits and the aim is to reduce the dependence on such deposits. We will continue to focus on improving product offerings for customers, improving branch productivity, improving payroll and winning government contracts. We also appeal to start-ups; all these measures are aimed at obtaining more robust retail deposits, and it will reduce our financing costs in the future.

Guidance at NIM…

We focus on improving return on assets (RoA). As mentioned, we aim to grow in line with the industry in FY27 and end the next fiscal with a RoA of 1 percent. As we think about more granular asset operations and diversifying asset operations, NIMs could be a bit lower, but we have plenty of opportunity to make up for this due to lower asset costs and lower credit costs.

WiWill you be making more leadership hires?

We have appointed a new Chief Risk Officer as the existing CRO will retire in the next financial year. And we have a new Chief Information Officer. We expect more senior managers to be hired in the retail segment.

When do you plan to raise capital? How much weight do promoters have in making strategic, important decisions?

As for capital, we don’t need capital at this point. Do we need it after 18-24 months? Yes. By then we expect growth to have returned and under those circumstances we need capital. Once we decide to raise capital, the question arises whether this should be done through a strategic investor or through a QIP or through other means. Those questions will be answered during that period. This is a management company. All decisions affecting IndusInd Bank must be taken by the board. That’s how we run this bank.