IDFC Bank to focus on technology over branches for retail ops

Infrastructure finance company-turned universal bank, IDFC Bank today said corporate clients will continue to be its profit centre in the initial years and reliance on branches will always be minimal.
Having made excess provisions for its infra assets, executive vice-chairman and managing director Rajiv Lall expressed confidence of clocking a profit growth of up to 15 per cent in the first few years.
"We will focus on technology and are confident of serving the same number of customers with a 10th of the branches as other banks in due course of time," Lall told reporters here while unveiling the logo of the new bank and introducing the top management team.

On October 1, it will formally kick-start operations with 23 branches and 15 of those will be in three districts of Madhya Pradesh, which has witnessed handsome performance in the farm sector, Lall said, adding that total branch network will grow to 60 by December, of which 40 will be in rural areas.
He further said that the bank will not focus on the branches for distribution but will instead rely on technology to get consumers.
The RBI picked IDFC (rpt) IDFC and micro-lender Bandhan from among over two dozen entities to start universal banking services, in April, 2014 after a gap of over 11 years.

Bandhan Bank, which started operations in August, is focusing on physical network and had 501 branches at launch.

Lall said IDFC will continue to rely on the wholesale and commercial banking verticals which serve corporates, for profits, and personal and business banking and rural banking, for retail customers.
In a five-year timeframe, the bank expects the share of wholesale and commercial banking in profits to go down to two-thirds, while the remainder will come from personal and business banking, coupled with rural banking, he said.
IDFC Bank will tap into lending opportunities beyond infrastructure to grow its book.
Lall said the bank will clock a profit growth of up to 15 per cent every year and will have 15 million customers by the fifth year of operations.