Approves digital strategy for fewer branches and more transactions online
Mumbai: IndusInd Bank expects demand for loans to buy commercial vehicles and construction equipment to continue to fire its credit growth this fiscal even as its board of directors has approved a digital strategy to route more transactions online and reduce the size of branches. IndusInd on Thursday announced a 25% year-on-year increase in its net profit for the quarter ended March at ₹ 620 crore, up from ₹ 495 crore a year earlier, driven by both interest and non-interest income.
IndusInd Bank shares, however, fell 1.35% as the bank increased its provisions to ₹ 214 crore from ₹ 107 crore last year. Net NPAs increased to 0.36% from 0.31% last year.
“There has been an encouraging trend for the future of interest income growth. Going ahead, we will also balance our retail and corporate portfolio equally and the non-vehicle consumer loan portfolio will also increase,” said Romesh Sobti, chief executive at IndusInd Bank.
SV Parathasarthy, the bank’s consumer finance head, said the government’s infrastructure spending push will spur growth in construction equipment, which will keep credit growth for the bank high.
“Last fiscal our commercial vehicle book grew in double digits, faster than the industry and this year we expect the construction equipment also to show a strong growth because of the government spending particularly in roads,” he said.
IndusInd’s board has approved a digital focus that will cut costs by making branches leaner and could also result in higher incremental revenues for the bank.
“This will lead to reconfiguration of branches and more transactions will be through our hubs in Mumbai and Chennai. We have studied the models in developed markets and also taken help from some technology companies l i k e Ga r t n e r, ” s a i d P a u l Abraham, COO.