1. IndusInd Bank Q4 net grows 21% to `752 cr as NII jumps 31.5%

IndusInd Bank Q4 net grows 21% to `752 cr as NII jumps 31.5%

NII is the difference between interest earned and interest paid by a bank.

By: | Mumbai | Updated: April 20, 2017 5:29 AM

Private sector lender IndusInd Bank on Wednesday reported a net profit of `751.61 crore for the quarter ended March, up 21.2% from the corresponding figure in the same quarter last year, on the back of a 31.5% year-on-year (y-o-y) jump in net interest income (NII) to `1,667.5 crore.

NII is the difference between interest earned and interest paid by a bank.The net interest margin (NIM) remained unchanged from the end of December at 4%, while improving 6 basis points (bps) from the year-ago period.
The bank’s provisions before tax more than doubled from the previous year and grew at a similar rate sequentially to `430.13 crore. The management attributed the jump to a one-time provision of `122 crore made against a standard account following regulatory advice.

Managing director Romesh Sobti said, “This asset is actually a bridge loan that has been given against a large M&A transaction in the cement industry. The loan is not due yet for payment. That will only be in June.” He said the bank expects the provision to be reversed in May because the deal in question is about to be concluded soon.

The bank sold two assets aggregating `190 crore to asset reconstruction companies (ARCs) during the quarter. The share of security receipts in its overall loan book stood at 0.31%, while that of restructured loans was 0.37%.
The asset quality at the bank remained almost unchanged from the previous quarter, with the gross non-performing asset (NPA) ratio falling to 0.93% from 0.94% and the net NPA ratio remaining flat at 0.39%. The bank’s capital adequacy ratio stood at 15.31% at the end of March, lower than 15.5% in March 2016.
Sobti said the lender raised about `1,000 crore in additional tier-1 capital during the quarter, and will mop up an identical amount later.

For the full year, IndusInd Bank reported a 25% growth in its net profit to `2,867.89 crore on an NII of `6,062.6 crore, up 34% y-o-y. Total advances as on March 31 stood at `1,13,081 crore, up 28% from the previous year, while total deposits rose 36% y-o-y to `1,26,572 crore.
The current accounts savings accounts (CASA) ratio improved to 36.85% from 35.19% at the end of March 2016. This, however, was lower than the December-end CASA ratio of 37.04%, a fact accounted for by the outflow of some deposits received during demonetisation.

This, however, was lower than the December-end CASA ratio of 37.04%, a fact accounted for by the outflow of some deposits received during demonetisation.

The bank’s commercial vehicle portfolio saw only a 4% growth y-o-y, said SV Parthasarathy, head of consumer finance. “A lot of things happened this year in terms of demonetisation and the conversion from BS-III to BS-IV. We might have lost 1-2% in terms of market share, but the industry also remained flat,” he said. Sobti said the move to the marginal cost of funds-based lending rate regime from the base rate regime has made IndusInd more competitive than its peers in the working-capital segment.

“We see loan growth sustaining at above 25%. On short-term working capital loans, we are finding good momentum and that’s why in this quarter our corporate loan book grew faster than our consumer loan book,”
he said.

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