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INDUSIND BANK: Key takeaways
3 year business plan in place: 650-700 branches, loans of Rs 700 bn (40% in consumer
finance). New products in consumer finance would include credit cards, loans against
property and used vehicle finance. These products would offset any pressure arising on
volume growth in new vehicles. Corporate loan portfolio would remain primarily on
working capital.
No near-term concern on margins despite term deposits having a higher share of bulk
deposits. Pricing power remains with banks in the near term and the bank is able to pass
the rise in deposit rates.
Strategy for increasing CASA would be around increasing transactions from customers
and branding exercise revolves around this. Primary focus for branch managers would be
to increase CASA deposits rather than overall deposits. Increase in branch presence would
aid growth in these deposits.
Focus to remain on return ratios. The bank would target RoAs in the range of 1.2% for
the corporate loan portfolio and 2.5% in the retail loan portfolio. Higher fee income
(through investment banking) and increased contribution from treasury to drive RoA in
the corporate loans. With the recent capital issuance, the bank is unlikely to raise capital
in the near term.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
INDUSIND BANK: Key takeaways
3 year business plan in place: 650-700 branches, loans of Rs 700 bn (40% in consumer
finance). New products in consumer finance would include credit cards, loans against
property and used vehicle finance. These products would offset any pressure arising on
volume growth in new vehicles. Corporate loan portfolio would remain primarily on
working capital.
No near-term concern on margins despite term deposits having a higher share of bulk
deposits. Pricing power remains with banks in the near term and the bank is able to pass
the rise in deposit rates.
Strategy for increasing CASA would be around increasing transactions from customers
and branding exercise revolves around this. Primary focus for branch managers would be
to increase CASA deposits rather than overall deposits. Increase in branch presence would
aid growth in these deposits.
Focus to remain on return ratios. The bank would target RoAs in the range of 1.2% for
the corporate loan portfolio and 2.5% in the retail loan portfolio. Higher fee income
(through investment banking) and increased contribution from treasury to drive RoA in
the corporate loans. With the recent capital issuance, the bank is unlikely to raise capital
in the near term.
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