Loan growth comes in at a multi-year low for IndusInd Bank in the second quarter while stressed assets woes added to the bank's woes. Romesh Sobti, MD and CEO of IndusInd Bank shared his views and outlook.

When asked who will be the next CEO of IndusInd Bank, he replied, “That question should be addressed to the board. That is one part that I cannot say anything. The last time I came on to CNBC-TV18, I had mentioned that it is going to happen much sooner than later.”

In terms of the pain in the banking sector, he said, “Compared to last year, net slippages are lower, gross slippages are a function of some technical because there are downgrades and then there are upgrades within a few days and things like that. The net figure is Rs 170 crore. We have had pretty handsome recoveries – they were never non-performing assets (NPAs) but very handsome repayments have happened in the stressed groups that we have talked about. We are still hopeful that these stressed accounts will not leave any residual cost which hits the profit and loss (P&L).”

On write-offs, he said, “Write-off was a very small amount out of this recovery. The write-off figure is just about one-fourth or one-fifth of the deductions that you see.”

“We have been more than transparent on disclosures as far as our real estate exposures are concerned, they have remained steady in terms of percentage. We also give special mention accounts (SMA) data and the SMA-I data every quarter which may tell you the possibility of the slippages and you are seeing a very small figure. Fortunately for us, we have not seen that sort of pain and our overdue is just Rs 28 crore of the whole lot,” he added.

In terms of market share Sobti said, “The vehicle finance area, we have gained solid market share, we have grown 21 percent there and if you look at segments of the auto industry then in commercial vehicles (CVs) perhaps we have grown around 14 percent, in cars we have grown 19 percent, in two-wheelers we have grown 24 percent. So very handsome growth in a market which is shrinking. Microfinance in our books has grown 32 percent. I don’t think we have lost market share anywhere, we have got some repayments towards the end of the quarter. I think the underlyings are pretty sound, we will bounce back to the mid-20s, if not better, Q3 onwards in terms of growth rate.”

On total exposure to non-banking financial companies (NBFCs), he said, “It is around 3.5 percent.”

Speaking about IndusInd Bank’s exposure to Indiabulls group, he said, “Indiabulls Housing exposure was 0.35 percent of our exposure and now that has come down to 0.27 percent of our exposure. We are virtually out of that Indiabulls Housing part. The Indiabulls real estate part also we have disclosed now. That figure is also 0.4-0.5 percent. Most of these exposures are getting transferred to Blackstone. So some have already got transferred. So that is why we have disclosed these numbers.”

“Our exposure to real estate financers remains steady at 3.8 percent and always remained below 4 percent. A large part is the commercial where there are no issues at all.”

In terms of housing finance exposure other than Indiabulls, he said, “The rest of the exposure is to the top names. Over the last six months, we may have increased our exposure to those top names. So it is not that we have shut that book.”

On loan growth, he further mentioned, “In Q1 our loan growth was 28 percent. So for the half year also we are in the mid-20s. This quarter we got some nice and strong repayments. For us to get back to the mid-20s and beyond, we don’t have to do an unusual sort of a stretch. So I think we should be ending the full year at least in the 25 percent range if not better.”