IndusInd Bank meets forecast, profit up 29% at Rs 447 cr
Pribvate sector lender IndusInd Bank ‘sDecember quarter net profit rose 29 percent year-on-year to Rs 447 crore, driven by a strong growth in net interest income as well as other income. The bottomline got a further boost from lower provisions, money that the bank has to set aside for bad loans. The net profit figure was in line what most analysts had estimated. Net interest income, the difference between interest earned and interest expended, grew 18 percent to Rs 861.4 crore and other income jumped 27 percent to Rs 610.7 crore. Asset quality of the bank was stable during the quarter. Gross non-performing assets (NPA) as a percentage of gross advances declined to 1.05 percent in December quarter from 1.08 percent in previous quarter and 1.18 percent in the year-ago period. Net NPA in third quarter stood at 0.32 percent compared to 0.33 percent in the June quarter and 0.31 percent during the same quarter the previous year. In absolute terms, gross NPA increased marginally to Rs 672.7 crore from Rs 654.5 crore in previous quarter and Rs 625.84 crore in same quarter last fiscal. Net NPAs also climbed to Rs 201.5 crore from Rs 195 crore and Rs 164.94 crore during the same period. Addressing the media to discuss the earnings, Ramesh Sobti, CEO said the company’s loan book grew 22 percent and deposits grew 23 percent. He said there was slight increase in restructured accounts. When a borrower is in financial distress, loans are restructured by diluting the original terms such as interest rates and repayment schedule (either or both). Sobti said the bank’s current accounts and savings accounts (CASA) stood at 34 percent, and that yields on retail loans have held up well. But there has been pressure on the yields in the overall corporate book, Sobti said. IndusInd’s loan book comprises 42 percent retail loans and 58 percent corporate. Sobti said vehicle financing was at the beginning of an uptick, and that the big gains were yet to come. He sees higher contribution from vehicle finance in the March quarter and the quarter following that. He says the commercial vehicle book has seen an improvement in gross NPAs as well as net NPAs
