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DBS Bank India, which returned to profitability in 2018-19, is now ready for growth, according to its CEO Surojit Shome. He said the bank will focus on increasing its SME and consumer business and look at tripling its balance sheet in the next five years.
“One of the better parts of our performance in 2018-19 is that we managed to get our net non-performing assets down to 0.33 per cent, and our coverage is above 90 per cent. Those are the two big balance sheet improvements. We have also brought in more capital,” said Shome, adding that the bank will now focus on growing its consumer and SME business, largely through its digital platform.
DBS Bank (branches) were amalgamated by conversion into DBS Bank India Limited (DBIL), a wholly-owned subsidiary (WoS) of Singapore-based DBS Bank, from March 1. It reported a net profit of ₹14.5 crore in 2018-19, against a loss of ₹533 crore in 2017-18.
Over the next five years, the bank plans to change its lending book mix, which currently has about 70 per cent to 75 per cent exposure to large corporates. “Over a five-year period, we would want to go to a 40:30:30 ratio, with 40 per cent of large corporates and 30 per cent each of SME and consumer business – both from a balance sheet and profitability perspective,” said Shome. In the SME sector, it will focus on companies across the spectrum from ₹1 crore up to ₹1,000 crore. “We built a digital underwriting model to lend to smaller SMEs, and we are in the process of rolling that out. We will use our physical outlets to reach out to our customers,” said Shome.
Infra sector
Having faced turbulence in its lending to the infrastructure sector earlier, DBS Bank India plans to remain cautious about its exposure to the sector.
“We have lent to infra in the past, but it has had its own challenges around regulations. We do some (lending) around renewable energy, lent to a container terminal here, but it is not particularly an area we are looking to build on a standalone basis,” said Shome.
Shome said the bank is not looking to raise more capital right now. “We have excess capital, need to grow to justify our capital,” he said. Its capital adequacy ratio stood at 19.69 per cent in 2018-19, up from 16.14 per cent, after capital infusion of ₹1,300 crore by parent DBS Holdings in December last year.
The lender plans to strengthen its presence in the country, and intends to establish over 100 customer touchpoints – a combination of branches and e-kiosks – across 25 cities in the next 12-18 months.
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