The bank's net non-performing assets (NPA) has jumped from 3.96 per cent to 7.2 per cent during the year. IndusInd Bank managing director KR Maheswari attributed the jump in net NPAs to its exposure in steel and construction industries.

The board of directors of the new generation private sector bank, which met in Mumbai on Friday, recommended a dividend of Rs 1.25 per share of Rs 10 for the year 1998-99.

The private sector bank has attributed the fall in its net profit to a provision of Rs 27.08 crore on account of growth in its non-performing assets in the previous fiscal and over 96 per cent fall in its investment income.

IndusInd had made underprovisioning to the extent of Rs 27.08 in 1997-98. It had to provide for it in fiscal 1999 following the detection of underprovisioning by the Reserve Bank of India inspection.

An IndusInd releasealso referred to the fall in income frome sale of investments as one of the major reasons behind the drop in net profit. "The net profit is lower mainly because the profit from sale of investments has come down from Rs 84.93 crore in the previous year to Rs 3.03 crore this year. The fall in earning on investments was due to overall unfavourable market conditions and absence of trading opportunities," it said.

The bank's operating profit declined to Rs 131.43 crore for the year 1998-99, down 39.66 per cent from Rs 217.84 crore operating profit for the year 1997-98.

The bank has witnessed a 4.17 per cent fall in its total income, which stands at Rs 676.41 crore for the year 1998-99. On the other hand, the expenses incurred by IndusInd Bank have risen to Rs 544.98 crore for the year 1998-99, registering a 11.66 per cent fall from previous fiscal's levels of Rs 488.04 crore.

"During the year ended March 31, 1999, IndusInd bank's deposits have crossed Rs 5018.4 crores, registering a 17.44 per cent rise overthe previous fiscal. The bank's advances too have risen by 8.63 per cent in the fiscal year 1998-99 over the previous fiscal, to reach Rs 2662.27 crores," the release said and added that though the bank's capital adequacy has fallen from 17.91 per cent in 1997-98 to 15.16 per cent in fiscal year 1998-99, it is still higher than the 8 per cent banking industry norm.

The fiscal year 1998-99 has witnessed an increase in the branch network of IndusInd Bank, which has now reached to 22 branches across the country with the bank opening 5 branches and 3 extension counter, the release added.