IndusInd Bank Promoter Ashok Hinduja Promises Support, ‘Ready To Inject Capital’ If Needed – News18
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Ashok Hinduja, the promoter of IndusInd Bank, assured in recent media interactions that the bank’s financial health remains robust
IndusInd Bank
Ashok Hinduja, the promoter of IndusInd Bank, assured in recent media interactions that the bank’s financial health remains robust, and it will receive full support if any capital is required. This comes after a significant drop in the bank’s market capitalization, which was shaved off by nearly Rs 18,000 crore on March 11 due to issues in its derivatives portfolio.
Shares of one of India’s largest private lenders plunged by 26% after the bank disclosed discrepancies in its derivatives portfolio, which led to an estimated 2.35% impact on its net worth. Hinduja told CNBC-TV18 that the bank is fully capable of addressing the emerging issues.
“Shareholders need not panic. These are routine issues. I understand the concern regarding the delay in communication, but banking is built on trust and integrity,” he remarked.
Hinduja further expressed confidence in the bank’s board and management. “We’ve seen IndusInd Bank through various challenges over the past 30 years, and they have been handled effectively. This issue, too, will be resolved,” he said, emphasizing the strength of the bank’s financial position.
He added, “If there’s a need for capital raise, the promoter is ready to inject funds. We are awaiting approval from the regulator. However, as of now, the bank’s capital adequacy ratio is above 15%, and there are no concerns.”
Regarding the bank’s leadership, Hinduja reiterated the promoters’ full confidence in the board, noting that such issues are not unique to IndusInd Bank, as similar challenges have faced banks globally. “The board and management are capable of resolving these issues,” he said.
The stock’s sharp decline was further exacerbated after brokerages downgraded the stock following the Reserve Bank of India’s approval of a one-year extension for Kathpalia’s reappointment as MD & CEO, which was shorter than expected.
IndusInd Bank had announced on March 10 that an internal review of its derivatives portfolio revealed discrepancies in account balances, which are estimated to negatively impact its net worth. The issue could affect profits by approximately Rs 1,500 crore, with the final impact potentially higher pending an external review.
