IndusInd plans big NBFC acquisition

Move aimed at increasing retail portfolio.

IndusInd Bank plans to acquire a large non-banking finance company (NBFC) in the next couple of years to "substantially" increase its retail portfolio.

IndusInd managing director and chief executive officer Bhaskar Ghose told reporters after the bank's annual general meeting today that the acquisitions, though in the financial sector, may not essentially be a bank.

"We may look at acquiring a non-banking finance company to substantially augment our retail loans portfolio," Ghose explained adding that the NBFC the bank would consider would be one with a large loans portfolio of about Rs 1,500 crore.

The private sector bank is also entering into arrangements with overseas banks to offer through them its products in India to the non-resident Indians.

IndusInd will be more interested in adding quickly to its assets rather than adding to the number of branches by acquiring a bank, he said. In line with this strategy, the bank is planning to enter into arrangements with banks overseas to be able to offer its products through such banks.

NRIs, who are customers of such banks, will be offered IndusInd's India products such as NRI deposits or NRI loans using the network of these banks, he explained.

"In turn, we will work with our stakeholders abroad to motivate them to divert part of their business to our partner banks," he said.

IndusInd has in place two such tie-ups in Dubai and Doha respectively and will look for more opportunities in the Middle East, UK, continental Europe, East Coast of the US and South East Asia including Malaysia, Indonesia, Thailand or Singapore, he informed.

"This will be the expansion of our home portfolio without opening any branches abroad," Ghose said.

Ghose indicated that the bank was considering to enter wealth management service as part of its fee-based activities to add to the profitability.

IndusInd is in talks with a global bank for wealth management service offerings and a formal agreement will be signed in near future, he said without disclosing the name.

The foreign partner will be a sound player with processes and expert people necessary for this activity, Ghose said adding an announcement will be made in two weeks. The other fee-based activities would be credit cards and insurance distribution, he said.

The annual general meeting passed a resolution authorising the bank's board to issue GDRs, ADRs and issue on a preferential basis, capital to qualified institutional bodies.

This was an enabling provision though there are no immediate plans of any capital issue. He, however, indicated that the issue will take place during the current financial year.