IDFC Bank Aims to Increase POS by 100% in 36 Months
Industry Trends
ram@justransact.com
29-07-2017 00:00:00
IDFC Bank Aims to Increase POS by 100% in 36 Months

IDFC Bank will pursue its branch expansion plan organically during the current fiscal and won't wait till Shriram merger happens, a top official told media.

 

Meanwhile, the bank has chalked out its plan for the next 36 months, which includes doubling its branches and growing point of sales (POS) to one lakh. The bank is also targeting Rs 5,000 crore every year from retail alone.

 

Rajiv B Lall, founder managing director & CEO, said that by end of 2017-18, the bank plans to increase its branches by 156-160 organically.

 

Over the next 36 months, IDFC Bank plans to increase its number of branches to 300-400 from the current 86, business correspondence to around 3,000 from 358 currently and points of presence to 100,000 from 11,429.

 

Speaking at the bank's annual general meeting recently, Lall said that unlike traditional banking system, IDFC Bank has relied on three distribution channels, including bank branches, business correspondence and point of presence.

 

He added, if the merger (IDFC-Shriram) goes through, it will accelerate bank's expansion plan and immediately it would add around 2,000 distribution points, which will come from Shriram City Union Finance (SCUF), which is expected to be merged with IDFC Bank. Shriram Transport Finance is expected to be separate entity under IDFC Ltd.

 

“We will be second to none among the private sector banks in terms of network. But our cost will be much lower because we are not relying only traditional channels,” said Lall.

 

Lall said that the Shriram companies will give access to one crore customers. If around 20 per cent of this customer base brought into IDFC Bank it will be major boost for the Bank, said Lall, who is pushing for retail growth. IDFC Bank claims a customer base of around 16 lakh as compared to 11 lakh last year, an increase of around 60 per cent.

 

“By combining their (Shriram's) retail with IDFC, it will accelerate IDFC's realisation to our strategy and enhance the profitability and ROE,” said Lall.

 

The bank claims every month around 80,000 retail customers are being added and average saving in each of them is about Rs 10,000-11,000 in savings.

-K Ramanathan ram@justransact.com


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