Press statement
Mumbai, March 17, 2020: In wake of the significantly higher level of market rumours and speculation around Induslnd Bank stock, we would like to reiterate that the Bank is financially strong, well-capitalized, profitable, and a growing entity with strong governance.
We would like to use this opportunity to address a few key areas:
Loan Book Quality:
- Last quarter the Bank’s Gross NPA at 2.18% was the 2nd lowest in the industry amongst large private sector Banks. We expect current quarter Gross NPA to be pretty much in line with that of last quarter.
- We expect our Net NPA of 1.05% as at the last quarter to fall below 1%, in line with our ambition to take provision cover beyond 60%.
- According to reports, relief measures for the telecom sector are under process of This is a significant positive step and we await further decisions / details in this matter.
- On sector-related speculation, please note our latest Gross NPA figure as at the end of February 2020:
- Real Estate Developer (Commercial & Residential) book had zero Gross NPA
- Gems and Jewellery financing portfolio had zero Gross NPA
- Commercial Vehicle and Microfinance portfolios remain steady and range-bound
- Market rumours about individual exposures doing the rounds are bloated and outlandish and nowhere near the truth. The Bank makes full disclosures every quarter on its loan book profile.
Promoter Group
- As already indicated in the media, the Promoter has sought RBI approval to increase shareholding to 26% and they await further guidance from the Regulator.
- Promoter has already informed the exchange about the simultaneous release of non-disposal undertaking with the creation of a pledge in relation to 23.8m shares of the Bank.
No new borrowing was undertaken and was merely a formalisation of a three year old arrangement. The money was originally raised to make an overseas acquisition which did not fructify – the pledge is a small fraction of Promoter holding in the Bank.
Liquidity
- The Bank maintains liquidity well above 100% going up to 120% on a daily basis.
- The Deposit business of the Bank on both Retail and Corporate segments is steady.However, a couple of state government entities have made withdrawals amounting toless than 2% of our total deposits. We are engaging with them to reiterate the stance of the Regulator that Government deposits in all private sector Banks is safe.
- The Bank has been a lender in the interbank market last week.
- At 15.43% CRAR (including 9 month profits), the Bank does not need capital for 2 years.
- All our banking with other banks and counterparties is “business as usual”. We continue to enjoy interbank lines / limits without interruption.
Various market rumours and speculation incorrectly reflect on the Bank’s financial health and are totally misplaced, motivated and not based on facts.
Induslnd Bank is committed to all its stakeholders and we would urge all our stakeholders to not believe unsubstantiated information and mischievous rumours.
The Bank has also proactively made all business continuity arrangements in light of the Corona virus so that our services remain uninterrupted, the health of our employees and customers is safeguarded, digital channels are propagated and daily business execution on the ground remains effective.
