1. IndusInd Bank net surges 25%

IndusInd Bank net surges 25%

NII at 22% propels decent earnings, but asset quality falls; credit offtake up 23%

By: | Mumbai | Updated: July 14, 2015 1:41 AM

Private sector lender IndusInd Bank’s Q1 net profit rose 25% y-o-y to Rs 525 crore, helped by a 22% y-o-y growth in the net interest income.

The bank recorded a net interest income of Rs 981 crore for Q1FY16 against Rs 801 crore in Q1FY15. Non-interest income rose 26% y-o-y to Rs 724 crore. Revenue rose 24% y-o-y to Rs 525 crore.

Net interest margin (NIM) for the quarter ended June 30 remained unchanged at 3.68% q-o-q. It rose 2 bps compared with the NIM of 3.66% of Q1FY15.

Asset quality deteriorated with gross non-performing assets (NPA) at 0.79% compared with 0.81% in Q4FY15. Net NPA ratio remained static at 0.31%. The bank recorded gross NPA of Rs 570 crore against Rs 563 crore in the previous quarter while net NPAs stood at Rs 225 crore against Rs 210 crore in the previous quarter.

“Despite a tough operating environment, credit offtake increased to 23%. The bank’s gross and net NPA percentage has reduced, which is a testimony to the quality of the bank’s loanbook,” said Romesh Sobti, MD & CEO, IndusInd Bank.

Gr8

The bank had made a sale of an asset to an asset reconstruction company (ARC) worth approximately Rs 400 crore in Q4FY15. The accounting of sale was deferred over eight quarters, with IndusInd accounting for Rs 32 crore in the current quarter.

“ARC sales are down. We have made sales of Rs 23 crore in the first quarter, which is our repossessed vehicle portfolio. We make sales from that portfolio normally, in every quarter, because that is recovered within 6 months,” Sobti said.

There were slippages of Rs 133 crore in the quarter ended June 30, conversions of Rs 126 crore into standard asset with a net slippage of Rs 7 crore. The total restructured book at the end of the first quarter of FY16 stood at Rs 453 crore.

During the quarter, the bank entered into an agreement with Royal Bank of Scotland NV (RBS) to acquire its diamond and jewellery financing business in India and related deposit portfolio. Sobti said the bank’s financials will start witnessing the accretion from the transaction in the second quarter of the current fiscal.

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