Money & Banking

Our fundamentals are ‘strong’: IndusInd Bank to shareholders

Our Bureau Mumbai | Updated on March 13, 2020

With the moratorium on YES Bank, other small and mid-sized private sector lenders are also trying to assuage concerns among investors and depositors about their financial health.

IndusInd Bank has written a letter to its shareholders, stressing on its strong fundamentals. “As you are aware, there are some financial market issues affecting a private sector bank that has been highlighted in the press; these are issues specific to that entity and are being dealt with by the RBI / government so as not to pose a systemic risk.

“Similarly, there are challenges in terms of environmental issues caused by the spread of coronavirus to address; various initiatives are being taken to ensure that employees and customers remain safe,” the private sector lender said in the letter, expressing hope that these issues will pass soon.

It further said that despite these pockets of external turbulence, the bank remains focussed on building scale with profitability on a platform of strong capitalisation and liquidity and high credit ratings.

IndusInd Bank also dismissed speculation on its investment in YES Bank. “We have neither contemplated nor evaluating any such investment,” the bank said in the letter by its MD and CEO Romesh Sobti and MD and CEO designate Sumant Kathpalia.

The private sector lender soon unveil its next three-year plan, which will include a deep focus on rural India, capitalising on the areas of domain expertise such as vehicle financing, harnessing the power of the bank’s large and growing network, building scale in some sub-scale retail products such as credit cards, increasing participation in deposit segments such as NRI / wealth management, and making assets/liabilities more granular in their make-up.

Fund-raising plans

“All of this will be underpinned by a digital DNA to drive revenues, efficiencies, and customer experience,” it said. With the turbulence at YES Bank, IndusInd Bank had decided to defer its fund-raising plans.

IndusInd Bank scrip has been under pressure for some time. On Thursday, it closed 8.36 per cent lower at ₹782.25 apiece on the BSE.

On Wednesday, RBL Bank had also clarified that the bank is well capitalised with no material adverse changes in asset quality since the third quarter results. “We wish to re-emphasise that RBL Bank is a fundamentally strong institution,” it had stressed.

Published on March 12, 2020

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