IndusInd Q2 profit jumps 30% to Rs 430 cr on fee income

Private player IndusInd Bank today reported 30.27 per cent rise in net profit to Rs 430.20 crore for the second quarter of the current fiscal, helped by a healthy rise in non-interest income.
The Hinduja Group-promoted lender's core net interest income rose 19 per cent to Rs 833.11 crore, while non-interest income was Rs 558.27 crore, up 34 per cent compared to the July-September quarter of last fiscal, 2013-14.
"Total income has increased from Rs 2,435.3 crore for the quarter ended September 30, 2013 to Rs 2,937.03 crore for the quarter ended September 30, 2014," said the bank.
The core fee income was up 31 per cent at Rs 509.30 crore for Q2, 2014-15, aided by 41 per cent rise in loan processing income, 25 per cent in fees from distribution of insurance, credit cards and 35 per cent increase in forex earnings, compared to the year-ago period, IndusInd Bank Managing Director Ramesh Sobti told reporters here.

After RBI's relaxation in norms to let top executives continue till the age of 70, the bank board has decided to approach the regulator for a three-year extension for Sobti.
Even though credit growth for the financial system plummeted to a decadal low, Sobti said the bank was able to restrict the fall and posted 22 per cent increase in loans.

For the bank, the good news is that the auto and commercial vehicle loans -- a major component of its assets - are on the upswing after a year's lull, he said.
The non-auto retail component is also looking better, Sobti said, adding that those loans have now crossed the Rs 7,000-crore mark. The corporate loans now account for 57 per cent of the overall book, while consumer finance is 43 per cent.

The bank's net interest margin dipped by 0.02 per cent at 3.63 per cent due to a pressure on yields from corporate loans, Chief Financial Officer S V Zaregaonkar said, adding that there was almost a similar fall in cost of deposits as well.
The bank, which cut its savings bank offering to a minimum of 4.5 per cent in September, is yet to see the impact of the move but its benefits will accrue soon, Sobti said.
The new customer addition has not suffered because of the move on rates and the bank continues to add around 55,000- 60,000 new customers every month, he said.

The bank is adding branches at a faster clip and will exceed its March 2015 target of 750, Sobti said, adding that it will close the year with 800 branches.
On the corporate side, there is a downward trend on rates as the demand for loans is very slow, IndusInd Bank Head of Corporate Banking Suhail Chander said.