By IANS,
Dubai : Leading Indian private bank IndusInd Bank will expand its operations to strategic markets across the world, including the Middle East, with significant expatriate Indian population.
A decision to this effect was taken at the annual general meeting (AGM) of the Hinduja group-owned IndusInd International Holdings Ltd (IIHL) here.
According to an IIHL statement, the bank’s expansion overseas will be carried out through strategic alliances, acquisition of banks or though application for fresh banking licences.
The AGM of the Mauritius-based IIHL was attended by IndusInd Bank’s new management team headed by chief executive Romesh Sobti.
It was also decided that the operations of IndusInd Bank, which has 148 branches across India, would be ramped up so that the value of investments made by its shareholders would continue to appreciate.
“The plans of Mr. Romesh Sobti and his team for the bank are essentially based on two planks, namely, building on its strengths and remedying the weaknesses,” the statement quoted IIHL chairman S.P. Hinduja as saying in his address at the AGM.
“The management team is confident that the bank will overtake its peers in the next three years, as measured by the criteria of productivity, profitability, and efficiency,” he said.
The bank, according to Hinduja, has overcome its past problems and is now poised for rapid growth as a significantly strengthened entity.
“Its capital adequacy ratio, a key indicator of stability, stands at a comfortable 11.91 percent as on March 31, 2008, well above the regulatory minimum in India of 9 percent,” he said.
Accordintg to him, capital to risk-weighted assets ratio (CRAR) has risen to 13.16 percent as of June 30.
“The bank also enjoys the highest ratings on its debt instruments from the leading rating agencies in India – Crisil, ICRA, and Fitch. The bank has consistently remained profitable every single year of its existence, right from its very first year of operations,” Hinduja said.
IndusInd Bank was launched in 1994 with a capital base of Rs.1,000 million ($32 million at the then exchange rate).
Of this, Rs.600 million was raised through private placement from Indian residents while the balance Rs.400 million ($13 million) was contributed by overseas Indians.
As for IIHL, the chairman said that the value of shareholders’ investment in the company has considerably appreciated, even after providing a reasonable return by way of dividend payment. IIHL has been paying dividend to its shareholders since 1995.
The average dividend paid has been 6.33 per annum and the total dividends paid have amounted to $22.68 million, equivalent to $0.73 per share of $1 each.
“As on March 31, 2008, the net worth of IIHL was $178.17 million,” Hinduja said.
“In order to share the benefit of the growth of the company, it was decided to issue 6 percent five-year bonus bonds of $1 each to shareholders in the ratio of one bond to every two shares held with effect from October 1, 2007,” he added.