IndusInd
Bank to expand its business
IndusInd Bank to expand its business
By Vaibhav Aggarwal
Ruppee Times
Sep 22, 2008
The Mauritius based IndusInd International Holdings
Ltd (IIHL) announced in its Annual General Meeting (AGM) that its
subsidiary IndusInd Bank, which operates 148 branches in India,
will expand its financial services in strategic markets, including
the Middle East, with significant NRI and Indian-origin populations.
IIHL is likely to make its presence felt in places
such as the UAE, Britain, the US, Hong Kong and Malaysia through
"joint ventures, strategic alliances or total acquisitions"
of banking assets.
"The IndusInd concept of establishing a global
platform to mobilize the contributions of NRIs for investment in
India was appreciated and approved by Manmohan Singh, the then Finance
Minister," recalled Mr. S.P. Hinduja, Chairman, IIHL.
IIHL concluded its 15th Annual General Meeting under
the able chairmanship of Mr. S.P. Hinduja. Mr. Romesh Sobti will
now head the management team as CEO of IndusInd Bank.
In his opening speech Mr. S.P. Hinduja, said: "The
plans of Mr. Romesh Sobti and his team for the Bank are essentially
based on two planks, namely: building on its strengths and remedying
the weaknesses. The management team is confident that the Bank will
overtake its peers in the next three years, as measured by the criteria
of Productivity, Profitability, and Efficiency."
Having overcome its past problems, IndusInd Bank
is now poised for rapid growth as a significantly strengthened entity.
"Its capital adequacy ratio (CAR), a key indicator
of stability, stands at a comfortable 11.91 percent as on March
31, 2008, well above the regulatory minimum in India of 9 percent,"
said Mr. Hinduja.
The ratio further improved to 13.16% at the end
of the April-June quarter of the current fiscal from 12.16% in the
first quarter of the previous fiscal.
"The bank also enjoys the highest ratings on
its debt instruments from the leading rating agencies in India -
CRISIL, ICRA, and Fitch. The bank has consistently remained profitable
every single year of its existence, right from its very first year
of operations," Hinduja said.
IndusInd Bank was floated with US $35 million capital
base pooled in from Non-Resident Indians in April 1994. Its net
worth stood at US $178.17 million as of March 31, this year. In
June, the Bank raised US $51.73 million (around Rs 222 crore) through
issuance of Global Depository Receipts to ensure the growth of its
balance sheet as per its business plan. This Bank was the first
one to become a part of RBI's Real Time Gross Settlement (RTGS)
system.
The chairman also claimed that the value of shareholders
investment in IIHL has significantly appreciated with time. The
company has been providing a reasonable return by way of dividend
payment since 1995. The average dividend and the total dividend
paid per annum were 6.33 and $22.68 million respectively. This amount
is equivalent to $0.73 per share of $1 each. Hinduja said, "As
on March 31, 2008, the net worth of IIHL was $178.17 million."
He added, "In order to share the benefit of
the growth of the company, it was decided to issue 6 percent five-year
bonus bonds of $1 each to shareholders in the ratio of one bond
to every two shares held with effect from October 1, 2007."
The bank expects 40% to 45% hike in advances during
the current fiscal, against the average loan growth of 20 percent
by most other banks.
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