Private sector lender, IndusInd Bank today reported an 80 per cent jump in its net profit at Rs 45.06 crore for the third quarter as against Rs 25.04 crore during the three-months ended December 2007.
The bank said that the quarterly profit was mainly contributed by a 62 per cent growth in fee-based income at Rs 133 crore during October-December.
Recovery of bad debts in corporate portfolio helped the bank to offload a substantial portion of its non-performing assets (NPAs) during the quarter. The gross NPAs for the quarter were recorded at Rs 263.59 crore, almost 36 per cent lower as compared to Rs 411.41 crore in the corresponding period last year.
The bank's total income grew by 34.34 per cent to Rs 760.55 crore during the quarter. The net interest income for the quarter stood at Rs 116.58 crore, a growth of 30 per cent on a year-on-year basis.
"The third quarter was tough for banks, and the main aim for us was to preserve our margins. The increase in yield on our advances was higher than our cost of deposits during the quarter, which helped the bank protecting its margins. There were write-backs too on the basis of recovery of some bad debts, which helped in a higher profit," said Ramesh Sobti, managing director, IndusInd Bank.
The net interest margin for the quarter was recorded at 1.95 per cent as against 1.74 per cent in the corresponding quarter a year ago. The bank's corporate loan book surged by over 20 per cent at Rs 6,798 crore during the quarter, while retail advances, which primarily constitute consumer finance business grew by 4.5 per cent to Rs 7,610 crore during October-December 2008 as against Rs 7,281 crore for the corresponding quater last year.
More From This Section
The bank has moderated its credit growth during the third quarter in order to protect its margins. The bank's current account and savings account (CASA) mix was recorded at 18.39 per cent for the quarter as compared to about 18 per cent during the second quarter.
"There was a shrinkage in current accounts during the thrid quarter, but our savings account base has increased by 14 per cent yea-on-year during the same period," Sobti said.
While most of the banks have already reduced their lending rates following the central bank's liquidity measures, IndusInd Bank said it would reduce its lending rates within a fortnight with at least a 50 basis point cut in the first tranche.
During the October-December period, the bank earned an interest income of Rs 627.48 crore, recording a 27.58 per cent jump from Rs 491.82 crore for the corresponding period of last year. The net interest income increased by 30 per cent to Rs 116.58 crore during the quarter as compared to Rs 89.78 crore during the quarter ended December 2007.