DBS India posts Rs. 275 cr loss; awaits subsidiary licence
Singapore-based foreign lender DBS Bank posted a net loss of Rs. 275 crore in FY15 in its Indian business due to high provisioning towards bad loans to clean up of balance sheets. Last year, it made a net profit of Rs. 2 crore.
DBS India is also awaiting RBI’s approval to get licence to open wholly-owned subsidiary in India. 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 Surojit Shome, CEO, DBS India.
Shome, who joined the bank in April this year, saw net net non performing assets (NPAs) ratio improve to 4.15 per cent as on March end FY15 from 10.19 per cent in FY14.
In FY15, net NPA in absolute terms was at Rs. 658 crore as against Rs. 1544 crore a year ago. “This was achieved due to selling of problem loans, provisioning and write-offs,” Shome said.
Provisioning during the year increased substantially to Rs. 926 crore, up 79 per cent from Rs. 516 crore a year ago.
Gross NPAs during the year also reduced to Rs. 1,284 crore from Rs. 2,116 crore in FY14.
Meanwhile, the bank will continue to execute our two-pronged strategy – one is to grow our business, apart from the corporate, our SME and consumer business and reasonable foray on the digital front. “The second is to continue to clean up our balance sheets and leave behind the stress built up in the last three-odd years,” Shome said.
Total advances grew by 4.5 per cent to Rs. 15,845 crore. The bank also reduced its investment book by roughly about Rs. 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 Rs. 804 crore as against Rs. 790 crore in FY14. While other income declined about 11 per cent to Rs. 227 crore in FY15 from Rs. 255 crore a year ago.
During the year, the foreign lender also infused capital of Rs. 1,625 crore of Tier-II capital with the total capital at Rs. 4,811 crore at the end of the fiscal year. This helped improvement in capital adequacy ratio at 17.01 per cent from 13.8 per cent a year ago.
DBS India is also awaiting RBI’s approval to get licence to open wholly-owned subsidiary in India. 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 Surojit Shome, CEO, DBS India.
Shome, who joined the bank in April this year, saw net net non performing assets (NPAs) ratio improve to 4.15 per cent as on March end FY15 from 10.19 per cent in FY14.
In FY15, net NPA in absolute terms was at Rs. 658 crore as against Rs. 1544 crore a year ago. “This was achieved due to selling of problem loans, provisioning and write-offs,” Shome said.
Provisioning during the year increased substantially to Rs. 926 crore, up 79 per cent from Rs. 516 crore a year ago.
Gross NPAs during the year also reduced to Rs. 1,284 crore from Rs. 2,116 crore in FY14.
Meanwhile, the bank will continue to execute our two-pronged strategy – one is to grow our business, apart from the corporate, our SME and consumer business and reasonable foray on the digital front. “The second is to continue to clean up our balance sheets and leave behind the stress built up in the last three-odd years,” Shome said.
Total advances grew by 4.5 per cent to Rs. 15,845 crore. The bank also reduced its investment book by roughly about Rs. 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 Rs. 804 crore as against Rs. 790 crore in FY14. While other income declined about 11 per cent to Rs. 227 crore in FY15 from Rs. 255 crore a year ago.
During the year, the foreign lender also infused capital of Rs. 1,625 crore of Tier-II capital with the total capital at Rs. 4,811 crore at the end of the fiscal year. This helped improvement in capital adequacy ratio at 17.01 per cent from 13.8 per cent a year ago.
Growth in FY16
The DBS India chief said a lot of the 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 and 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,” Shome said
He added, “If we get the approval from RBI on opening subsidiaries, we have to meet the priority sector lending targets and open branches in the rural and semi-urban areas.”
In India, DBS operates with 12 branches at present with an employee base of 1000.
“Hopefully, the slow and gradual pick up in the economy will help both our topline and 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,” Shome said
He added, “If we get the approval from RBI on opening subsidiaries, we have to meet the priority sector lending targets and open branches in the rural and semi-urban areas.”
In India, DBS operates with 12 branches at present with an employee base of 1000.
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