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Singapore-based foreign lender DBS Bank posted a net loss of ₹275 crore in FY15 in its Indian business due to high provisioning towards bad loans. Last year, it made a net profit of ₹2 crore.
Provisioning during the year increased substantially to ₹926 crore, up 79 per cent from ₹516 crore a year ago.
In FY15, net NPA ratio substantially improved to 4.15 per cent with net bad loans in absolute terms coming down to ₹658 crore against ₹1,544 crore a year ago. “This was achieved due to selling of problem loans, provisioning and write-offs,” said Surojit Shome, CEO, DBS India.
Gross NPAs during the year also reduced to ₹1,284 crore from ₹2,116 crore in FY14.
DBS India is also awaiting the RBI’s approval for licence to open wholly-owned subsidiary here. At present, the Singapore-based lender operates under the branch-based model.
“Over the next couple of months, we will get more clarity (on RBI approval),” said Shome.
Total advances grew by 4.5 per cent to ₹15,845 crore.
The bank reduced its investment book by roughly about ₹4,500 crore.
In FY15, the NIMs (net interest margins) went up to 2.1 per cent from 1.9 per cent.
Net interest income grew marginally to ₹804 crore as against ₹790 crore in FY14. While other income declined about 11 per cent to ₹227 crore in FY15 from ₹255 crore a year ago.
During the year, the foreign lender infused ₹1,625 crore by way of Tier-II capital in its Indian operations, taking the total capital to ₹4,811 crore at the end of the fiscal year. This helped improve capital adequacy ratio to 17.01 per cent from 13.8 per cent a year ago.
Growth prospects The DBS India chief said a lot of growth is coming from new client acquisition, SME and consumer business. It will be cautious on the infrastructure and construction sector, which showed no growth in FY15.
“Hopefully, the slow and gradual pick up in the economy will help both our topline growth and some of our troubled loan book…As we look at growth, we also have plans to infuse, if required, mostly Tier-II capital as we await the licence (for converting its operations into a subsidiary),” Shome said
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