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Private sector lender IndusInd Bank reported a 26 per cent increase in net profit to Rs 421.06 crore for the quarter ended June on back of an improved income from fees and commission.
The fee income was up 38 per cent to Rs 486.5 crore as compared with Rs 351.6 crore in the same quarter of the previous year. Net interest income or the difference between the interest earned and interest expended was up 18 per cent, at the end of the first quarter at Rs 800.7 crore as compared with Rs 679.5 crore in the same period last year.
Net Interest margin, or the difference between interest earned on loans and paid on deposits was under pressure and declined to 3.66 per cent as compared with 3.72 per cent in the January-March quarter.
Romesh Sobti, managing director and chief executive officer, IndusInd Bank, declined to give any guidance on the margin front but believes the bank will improve it going ahead. S V Zaregaonkar, chief financial officer at IndusInd Bank, said, “This was on the back of slow growth in the consumer finance advances which grew by only nine per cent on a year-on-year basis and only two per cent if you compare it to the last quarter.”
The share of current and savings account (Casa) deposits or the low cost deposits increased to 33 per cent as on end June this year as compared to 30 per cent in the same quarter last year. On the asset quality front, the lender has managed to keep the net non-performing assets (NPAs) steady at 0.33 per cent in the June-ended quarter, the same as the preceding quarter. But as compared to the same period last year, the net NPA is up from 0.21 per cent. However, the restructured book for the bank has gone up to Rs 235 crore in this quarter as compared with Rs 188 crore in the March-ended quarter.
Provisions and contingencies have come down to Rs 110.40 crore at the end of the first quarter from Rs 132.06 crore in the same period last year. The loan book of the bank grew at 34 per cent and credit growth was up 24 per cent. Despite the fact that several banks, both in the public and the private sector, have been looking at raising capital, IndusInd Bank has no immediate plans to go to the capital markets now.
“We had raised capital in December 2012 and at that time we had said that we don’t plan to raise capital for the next three years and we are going to stick to that,” Sobti said.
