IndusInd Bank Q1 net up 24 per cent at Rs 1,036 crore on NII, loan growth

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Mumbai | Published: July 10, 2018 5:13:17 PM

Private sector lender IndusInd Bank today posted a 24 per cent increase in net profit at R 1,036 crore in the June quarter on healthy rise in advance and core interest income.

The city-based bank had posted a net profit of Rs 83 crore in the corresponding period last year. (PTI)

Private sector lender IndusInd Bank today posted a 24 per cent increase in net profit at R 1,036 crore in the June quarter on healthy rise in advance and core interest income. The city-based bank had posted a net profit of Rs 83 crore in the corresponding period last year. The core net interest income rose 20 per cent to R 2,122 crore on the back of a 29 per cent loan growth, while the non-interest income moved up to Rs 1,301 crore from R 1,167 crore in the year-ago period. The net interest margin (NIM) narrowed to 3.92 per cent and the bank management said it will be stable at the 3.90 per cent level in the future as well. Its managing director and chief executive Romesh Sor said the bank had to book a mark-to-market (MTM) loss of Rs 8 crore on its G-sec portfolio.

The reverses have been fully absorbed through provisioning, he said, adding that the profit growth would have been higher but for this impact. Its overall provisions rose to over Rs 350 crore in the June quarter, from Rs 309 crore in the year-ago period. The gross non-performing assets (NPA) ratio improve marginally to 1.15 per cent, one of the lowest in its history and Sobti exuded confidence on this front going ahead.

Corporate advances increased 30 per cent, while retail lending was up 28 per cent Vehicle loans, which can be called as the genesis of the bank, grew by over 50 per cent and Sobti said that there will be at least two years of “good-run” in this segment o demand from the construction sector. The corporate advances growth was diversified, with insolvency resolution loans, power transmission and renewable being the largest users of credit, Sobti said, adding that with the capacity utilisation moving up to 74 per cent, there will be more CapEx going forward.

The bank is cautious but open to project finance proposals as well, he said “We are in for a good loan growth, there is going to be more capex,” he said, adding that the bank is well capitalised with a total buffers of 14.70 per cent. He said completion of its merger with microlender BFI will add another two percentage points to its capital adequacy ratio and the bank does not foresee a requirement in the near future. Sobti said, the ongoing volatility in the rupee is good opportunity for the bank, adding that it made gains of over Rs 228 crore on the forex front. He said the bank does not expect MTM losses in the future as the yields will stabilise. The overall deposit growth came at 19 per cent and the share of the low-cost current and saving account deposits grew to 43 per cent. Sobti welcomed the progress made under insolvency an bankruptcy code and added that the ongoing litigations are part of the stabilisation of what he called as a well-drafted legislation. The bank scrip shed 1 per cent to close at Rs 1,935 piece on the BSE today, against 0.85 per cent gains on the benchmark.

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