The Hindu Business Line : IndusInd Bank sees 30% growth in net profit

INDUSIND Bank expects 30-35 per cent higher net profit for the current financial year even as the it aims to wipe out "historic" bad loans from its books, its Managing Director, Mr Bhaskar Ghose, has said.

The bank reported Rs 71.35 crore net profit for 2002-03. This projection is a "standalone" figure for the bank, which recently announced its merger with Ashok Leyland Finance Ltd.

Net NPA ratio is likely to shrink below two per cent by the end of the current fiscal, he added. IndusInd also hoped to report 15-20 per cent growth in operating profits, Mr Ghose said. The bank said that its advances could top Rs 6,000 crore and asset book size over Rs 9,000 crore.

For Ashok Leyland Finance, advances could be in the range of Rs 2,500 crore to Rs 2,800 crore and asset size could top Rs 3,000 crore for the current fiscal, Mr Ghose added.

The proposed merger with ALFL will help the bank service new businesses such as financing two-wheelers and trucks, Mr Ghose said. The merger will help the bank strengthen its focus towards retail customers.

The non-banking finance company has a depositor base of close to two lakh and three lakh "loyal borrowers". "There is great opportunity to cross-sell the bank's products to these (ALFL's) customers," Mr Ghose said.

The bank also plans to convert 75-80 of ALFL's 153 branches into banks. "We will have 155 branches by this year end" which will include post-conversion of some of ALFL branches, Mr Ghose said. In addition to the new branches, the bank stands to use about 450 ALFL offices as distribution points for the bank's products.

However, IndusInd bank will not take over the leased assets of ALFL in its books "as it does not make sense for a bank to be in that business", Mr Ghose said. These leased assets totalling close to Rs 150 crore are likely to be transferred to HTMT Ltd, he added. Other financial firms such as Citibank, UTI Bank, HDFC and GE Capital are picking up the securitised assets in ALFL's portfolio, he added.