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IndusInd Bank dismisses rumours on its financial health says, ‘Financially strong, well-capitalised’

On Wednesday, the bank”s stock on the BSE fell by Rs. 61.10 or 9.20 per cent to close at Rs. 603.05 from its previous close.

SNS | New Delhi |

Private sector lender IndusInd Bank on Wednesday dismissed all the rumours on bank’s financial health by saying, it is “financially strong, well-capitalised, profitable, and a growing entity with strong governance”.

The bank’s statement comes in the wake of significantly higher level of speculation around its stock.

On Wednesday, the bank”s stock on the BSE fell by Rs. 61.10 or 9.20 per cent to close at Rs. 603.05 from its previous close.

The bank said, “Market rumours about individual exposures doing the rounds are bloated and outlandish and nowhere near the truth,”

“The Bank makes full disclosures every quarter on its loan book profile.”

The Hindujas-backed bank said its gross non-performing assets (NPAs) last quarter (October to December) stood at 2.18 per cent, which was the second lowest in the industry amongst large private sector banks.

“We expect current quarter gross NPAs to be pretty much in line with that of last quarter,” it said.

“We expect our Net NPA of 1.05 per cent as at the last quarter to fall below 1 per cent, in line with our ambition to take provision cover beyond 60 per cent,” it added.

As per the statement, the bank’s promoter has sought RBI approval to increase shareholding to 26 per cent.

“Promoter has already informed the exchange about the simultaneous release of non- disposal undertaking with the creation of a pledge in relation to 23.8mn shares of the Bank,” the statement added.

“No new borrowing was undertaken and was merely a formalisation of a three year old arrangement. The money was originally raised to make an overseas acquisition which did not fructify – the pledge is a small fraction of Promoter holding in the Bank.

The bank further said that its estate developer (commercial and residential) book had zero gross NPAs. It’s gems and jewellery financing portfolio too had none NPAs.

“Market rumours about individual exposures doing the rounds are bloated and outlandish and nowhere near the truth. The bank makes full disclosures every quarter on its loan book profile,” it said.

The statement also added that the lender maintains liquidity well above 100 per cent going up to 120 per cent on a daily basis. The deposit business of both retail and corporate segments is steady.

(With input from agencies)