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Wednesday, Aug 28, 2002

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IndusInd Bank looks at acquisition route for growth

Our Bureau

MUMBAI, Aug. 27

REALISING that organic growth will not be the way forward, private sector IndusInd Bank Ltd, is exploring the acquisition route for growth.

The bank, which will have a renewed thrust on retail banking, is targeting to grow profits by 30-35 per cent, said Mr Bhaskar Ghose, Managing Director, IndusInd Bank. Increase in net profit for year ending March 2002 was 25.18 per cent from the previous year.

"We are in advanced stages of acquiring retail loan portfolio from 2-3 non-banking finance companies (NBFC). Due diligence process is on,'' said Mr Ghose, at a press conference.

The bank is in talks with some NBFCs to acquire depository client portfolios following a few such acquisitions in the recent past.

Earlier in the year, IndusInd Bank had acquired corporate loans worth Rs 1,000 crore from ICICI and over Rs 500 crore of corporate loan portfolio from 2-3 public sector banks with capital adequacy ratio problems, said Mr Ghose.

Along with plans to double the branch network from the present 49 to 90 in a year's time, and adding 10-13 branches in the coming 2-3 months, the bank is also open to the idea of acquiring branches of either private sector or foreign banks, said Mr Ghose.

The bank is open to acquiring one of the new private sector banks at a later date, said Mr Ghose.

Apart from acquisitions, the new focus of the bank is on retail banking. Retail loan products are being re-launched at the moment that include — consumer loans, auto loans and housing loans with competitive rates, reworked parameters and increased speed of processing, said Mr Jayanta K. Basu, Executive Vice-President, IndusInd Bank.

"The new focus on retail banking will reduce our cost of funds and increase spreads. Average spread currently is 2.5-3 per cent that will go up to five per cent by March 2005, said Mr Ghose.

Currently, the bank has a retail customer base of over 2 lakh and hopes to increase it by 1,20,000-1,50,000 customers in a year's time , said Mr Jayanta Basu.

The Bank today, upgraded its Internet banking facility to an interactive platform from a `view only' facility. The bank is also to launch debit cards shortly.

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