IndusInd Bank Ltd., India’s best performing lender in the past decade, is counting on its acquisition of a microfinance firm to help it improve profitability, while shrugging off risks from the country’s spreading shadow bank crisis. IndusInd’s purchase of Bharat Financial Inclusion Ltd. will help it to “move the needle" on profitability parameters including return on assets and lending margins, Chief Executive Officer Romesh Sobti said. However, higher capital buffers and lower bad loans helped the bank sidestep the fate of rival Yes Bank Ltd., which had lent to the non-banks, and saw its market capitalization halve. “IndusInd’s exposures are way lower than what is projected in those reports and is backed by adequate collateral," Sobti said. The bank’s net bad loan ratio stands at about 1.2% compared with 2.9% at Yes Bank.

Source: Mint July 23, 2019 23:48 UTC