IndusInd Bank on Wednesday reported a 26% year-on-year rise in its net profit for the September quarter to Rs 704.26 crore, benefiting from a strong rise in revenue and a reduction in costs of deposits and funds.
The bank’s cost of funds came in at 5.51%, down from 5.67% in the June quarter, while its cost of deposits fell to 6.60% from 6.93% in the previous quarter. This, coupled with a slower reduction in yields on assets and advances, resulted in an expansion of net interest margin (NIM), which came in at 4.00%, up from 3.97% for the June quarter and 3.88% in the same quarter last year.
IndusInd Bank’s total income for the quarter rose by 24% year-on-year to R4,439.72 crore, primarily due to an increase in interest income. The lender’s net interest income, which is the difference between interest earned and interest expended, rose by as much as 33% from the year-ago period to R1,460.31 crore. “This quarter, the bank has registered positive growth across all vectors despite tepid global markets and not so buoyant domestic market. However, the overall industry sentiment looks optimistic with a gradual uptick in credit pickup likely in the coming quarters,” Romesh Sobti, managing director and chief executive officer at IndusInd Bank, said in a post-results statement. In terms of asset quality, IndusInd Bank witnessed a marginal drop in non-performing assets. Gross NPA, as a percentage of total loans, stood at 0.90% at the end of September, down 1 basis point from the end of the June quarter. Net NPA stood at 0.37%, 1 bps lower quarter-on-quarter. As a result, provisions made by the bank during the quarter fell to R213.88 crore, 7% lower than in the previous quarter.
During the quarter under review IndusInd Bank also reported a healthy expansion of its overall loan book. As on September 30, the lender’s corporate loan book stood at R58,391 crore, up 26% from September 30 last year, while its consumer loan book stood at R40,558 crore, up 27% y-o-y. The total loan book increased by 26%.