Tag: IndusInd

How IndusInd Bank is ready for loan growth amid Covid onslaught, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


IndusInd Bank reported a stable fourth quarter with an in-line performance, making analysts bullish on it despite the Covid pandemic.

While the bank reported year-on-year net profit growth of 190% on low base effect, its deposits grew 7% quarter on quarter, while loan growth is seeing a revival.

Deposits

Its total deposits grew by 26.8% y-o-y and 7.1% q-o-q. The 10.5% q-o-q growth in current and savings account (Casa) has helped the bank to increase its Casa ratio to 42%, bringing down its costs of funds.

While IndusInd Bank reported muted loan growth of 2.8% y-o-y and 2.6% q-o-q during the fourth quarter, the management is now focused on the loan recovery and its collection efficiency has improved from 97% to 98% q-o-q.

Its high capital adequacy ratio (CAR), its Tier 1 CAR is placed now at 16.9%, could easily support the growth in several years. With a 2.6% q-o-q increase in loan book, loan growth has made a small come back in the fourth quarter and analysts believe that IndusInd will be able to deliver around 10% loan growth in 2021-22. IndusInd also plans to expand its geographic reach by opening around 250 branches each in 2021-22 and 2022-23.

Asset quality

On the asset quality front, the Gross non-performing asset ratio improved sequentially and stood at 2.67%/0.69%, with the provision coverage ratio improving to 75% from 43% in March 2019. In addition to this, the bank holds a COVID-related provision buffer at 75 bp of loans. The restructured book stood at 2% of loans (slightly higher than the guided 1.8%), largely from the Vehicle portfolio.

IndusInd follows a conservative provisioning policy which has resulted in its provision coverage ratio (PCR) improving to 74% now from just 43% in March 20219. It has made 100% provisions for unsecured retail loans and MFI loans.

With large provisions to the tune of 3.3% of its total advances, it should be able to navigate the current turbulent times with this balance sheet cushion.

Business momentum

IndusInd reported a net profit of Rs 930 crore, in line with estimates, aided by an improvement in its core operating performance.

Net interest income grew 9% YoY to Rs 3,530 crore as the margins waere broadly stable at 4.13%. Fee income picked up sequentially and grew ~9%, while opex was broadly flat YoY.

Advances growth picked up sequentially to 2.6%, aided by improving demand. Among retail segments, the MFI/Tractor portfolio showed robust traction, while the credit card portfolio showed a declining trend. The wholesale portfolio grew 3% quarter on quarter while the retail to wholesale mix stood at 57:43.

Deposit traction remains strong at 7% QoQ to Rs 2.6 lakh crore.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , ,

Extreme weather like floods, droughts, cyclones puts $84 billion of Indian banks debt at risk, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


An increase in extreme weather events such as floods, droughts and cyclones risk souring debt worth more than Rs 6.19 lakh crore ($84 billion) at India’s biggest financial institutions.

That’s according to leading nonprofit environmental disclosure platform CDP. State Bank of India, the country’s largest lender, HDFC Bank, IndusInd Bank and Axis Bank are among the institutions that reported climate risks to CDP in 2020, it said in its annual report released Wednesday.

The banks flagged exposure to environmentally sensitive businesses including cement, coal, oil and power. They also listed the effects of cyclones and floods on loan repayments in farming and related sectors. Lenders accounted for 87 per cent of the total risk, valued at about $97 billion, across 67 top Indian companies that responded to CDP.

“Climate is the biggest risk to businesses in the long run. Financial institutions are beginning to understand it,” said Damandeep Singh, New Delhi-based director of CDP India. “As investors look at funding companies based on environmental, social and governance disclosures, we’ve seen many more companies report climate change risk.”

The potential harm to agriculture echoes concerns raised by India’s central bank about the impact of climate change on farming, a sector that employs more than half of its citizens. At the same time, the world’s third-biggest emitter of greenhouse gases is relying on coal to help drive its post-Covid recovery. The dirtiest fossil fuel could remain its dominant energy source in the coming decades.

CDP, which gathered the data on behalf of 515 investors with $106 trillion in assets, said it received responses from 220 small and large Indian companies.

State Bank of India, which is facing concerns from shareholders and investors over its proposal to help fund the controversial Carmichael coal mine in northern Australia, valued its total climate risk at Rs 3.83 lakh crore. The bank said it may “indirectly face reputational risks, should it be involved in lending to environmentally sensitive projects which may have significant public opposition.” SBI didn’t respond to a request seeking comment.

The second-highest risk was flagged by HDFC Bank, which estimated it had Rs 1.79 laks crore of assets in danger — a 24 per cent increase from 2019. It said its calculations took into account compensation it would have to pay to employees in case of flooding and its exposure to farming, cement, coal, oil and power.

Smaller private banks IndusInd, Axis and Yes reported lowered climate change risk compared to last year at Rs 46,600 crore, Rs 7,500 crore and Rs 2,000 crore respectively, citing more diversified portfolios.

India was second in the Asia Pacific and sixth globally among CDP’s ranking of countries whose companies committed to science-based targets for net-zero carbon emissions, the report showed. More than 50 Indian companies said they are preparing for future policy and regulatory changes by voluntarily committing to cutting their carbon footprint.

Increased investor pressure and stronger disclosure norms are compelling Indian companies to address climate concerns, the CDP report said. Almost all of companies reported board-level oversight of climate-related issues, while some 84 per cent said climate-related risks and opportunities led them to alter plans for products and services.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

IndusInd pays premium to redeem warrants

Banking & Finance

[ad_1]

Read More/Less


Market regulator Securities and Exchange Board of India (Sebi) had given them time till February 18, 2021, to make the remaining payment.

The promoters of IndusInd Bank are paying Rs 1,709 per share to redeem warrants, a premium of 65% to Wednesday’s closing price.

lnduslnd International Holdings (IIHL), the promoter entity, had paid Rs 673.82 crore for the warrants or 25% of the total price.

Market regulator Securities and Exchange Board of India (Sebi) had given them time till February 18, 2021, to make the remaining payment.

Post the conversion of the warrants into shares, the promoter holding will increase by 1.7% to about 15%, the company said.

Analysts point out the lender needs capital and believe much of the Rs 2,021 crore would be used for provisioning against sub-standard assets. The gross npas (non-performing assets) at the end of the December 2020 quarter at 1.74% were lower than in the September 2020 quarter.

However, the pro forma gross NPAs were 2.93% as the bank has not declared fresh NPAs following the Supreme Court’s orders. Consequently, the lender increased provisions and contingencies for the nine months to December by 175% to Rs 6,077 crore. For this period, the bank’s net profits fell 52% year-on-year (y-o-y) to Rs 2,004 crore. The company’s capital adequacy ratio at the end of December 2020 was 16.34%, slightly lower than the 16.55% at the end of the September 2020 quarter. The IndusInd stock has lost 32% since the time the warrants were issued in July, 2019.

IIHL said it has raised debt by pledging some shareholding of lnduslnd Bank for acquisition/strategic investment to convert IIHL into a listed operating entity outside India by the first week of September 2021.The promoters of IndusInd Bank have pledged 4.27 crore shares, amounting to a 5.6% stake in the bank.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

IndusInd Bank promoters complete capital raise via rights issue

Banking & Finance

[ad_1]

Read More/Less


lnduslnd International Holdings Ltd (IIHL), the promoter company of lnduslnd Bank, said it has completed capital raise through rights issue which was oversubscribed.

“IIHL raised capital at an overwhelming premium of 1,400 per cent towards the subscription of this rights issue,” it said in a statement late on February 16.

The balance 75 per cent of the warrants were redeemed at the price of ₹1,709 per share, amounting to ₹2,021.45 crore. This amounts to a premium of 61.4 per cent on Tuesday’s closing price of ₹1,058.65 of IndusInd Bank scrip on the BSE.

The bank’s scrip closed 2.46 per cent lower at ₹1,032.6 apiece on the BSE on Wednesday.

IIHL said it also plans to monetise some of the other mature, non-core investments to support the redemption of warrants.

“The funds from this divestment and the rights issue will be remitted on or before February 18,” it said.

Previously, in July 2019, 25 per cent of the warrants were subscribed on payment of ₹673.8 crore.

“This would lead to IIHL shoring up additional equity of 1.7 per cent in lnduslnd Bank, thereby bringing promoter equity to 15 per cent on a diluted basis,” it said.

The promoters also stressed they would like to increase their stake in the bank to 26 per cent.

“The board of IIHL has always been desirous of increasing its stake in lnduslnd Bank to 26 per cent, the statement further said.

“Towards this, it has raised the debt by pledging some shareholding of lnduslnd Bank for acquisition or strategic investment to convert IIHL into a listed operating entity outside India by the first week of September 2021,” it said.

Meanwhile, according to a regulatory filing on February 16, the promoters of IndusInd Bank have pledged 4.27 crore shares, amounting to 5.6 per cent stake, with Catalyst Trusteeship Ltd.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , ,

IDEMIA partners with IndusInd Bank to launch metal credit card, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Metal payment card technology entity IDEMIA, in a partnership with IndusInd Bank, announced the lender’s first metal credit card. The entity said IndusInd Bank, which has named the card as “PIONEER Heritage”, added “Payment cards are no longer a mere payment tool in India but also reflect the lifestyle of the card holder,” IDEMIA quoted “Research shows that buying premium products makes 52% of global customers “feel good, and metal cards are a major differentiator for 58% of the card holders.”

IDEMIA further said “high-quality material, superior style, handcrafted design and artisanal effects,” defined the exclusivity quotient for card holders, whilst adding “Equipped with best-in-class features and privileges across categories like travel, wellness, lifestyle, among others, the all new metal credit card – offers exclusivity to wealth customers of IndusInd Bank by providing them with a superior payment experience powered with innovative technology.”

Amanda Gourbault, Executive Vice President, Financial Institutions, IDEMIA, on the launch of the card said “As the world goes digital, payment cards are arguably the last physical touch-point between the bank and its customers. The significance of metal cards is to promote IndusInd Bank’s brand and serve as a tool to create loyalty for the bank,”

“Our global experience is that Metal cards facilitate Card Holders’ exclusive and premium payment experience and hence the customer loyalty,” Gourbault further added.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , ,
1 2