Private sector lender IndusInd Bank on Tuesday reported a smart 26.49% year-on-year (y-o-y) rise in net profits at Rs 836.55 crore for the three months to June. The growth in the bottom line was aided by a robust growth in the bank’s net interest income (NII). The lender’s operating profit rose 28.75% over Q1FY17 to Rs 1,588.53 crore. NII, which is the difference between interest earned and interest expended, rose 30.79% y-o-y to Rs 1,774.06 crore. The lender’s total income rose 21.52% y-o-y to Rs 5,302.77 crore in the first quarter. The bank’s profitability remained intact as the Net Interest Margin (NIM) saw a marginal rise in the first quarter to 4% y-o-y and stayed sequentially flat.
Indusind Bank’s asset quality was maintained. Gross non-performing assets (NPA) as a percentage of advances rose by 18 basis points in Q1FY18 to 1.09% y-o-y. Compared to the fourth quarter of FY17, gross NPAs rose 16 basis points. Net NPAs as a percentage of advances rose by six basis points to 0.44% on a y-o-y basis while it rose five basis points compared to the previous quarter.
“Our capital adequacy improved during the quarter. That’s an indication of two features. One is we had raised Rs 1,000 crore on additional tier-1. Another is there has been a reduction in the risk weightages,” said Romesh Sobti, MD and CEO, IndusInd Bank.
The bank’s provisions and contingencies rose to Rs 309.97 crore compared to Rs 230.47 crore in the same period last year. However, provisions fell when compared on a sequential basis with the figure standing at Rs 430.13 crore last quarter. The bank has made a floating provision of Rs 70 crore. “Last quarter we had made an unusual provision on a standard account which was Rs 122 crore. That was for the Jaypee-Ultratech transaction. That deal has now been done. The provision has been reversed. But not a penny of that provision has gone into profit,” Sobti added.
IndusInd Bank saw a credit growth of 24% y-o-y and a deposit growth of 31% y-o-y. Total deposits as on June 30 stood at Rs 1.33 lakh crore compared to Rs 1.01lakh crore as on June 30 last year. CASA ratio of the bank improved to 37.78% against 34.43% in June 2016.
The bank also saw an improvement in its credit cost. The net credit cost came at 17 basis points compared to 22 basis points last quarter. On Tuesday, the bank’s stock closed marginally down at Rs 1,559.25 on BSE.