Private sector lender IndusInd Bank posted a net profit of 52 per cent in the quarter ended June, owing to strong growth in core fee income. The net profit rose from Rs 118.55 crore in the April-June 2010 period to Rs 180.18 crore in the first quarter of the current financial year.
The bank’s core fee income grew 44 per cent to Rs 187 crore in the quarter ended June, against Rs 129.58 in the same quarter last year. Net interest income was up 32 per cent to Rs 390 crore, compared with Rs 295.68 crore in the same period.
Driven by growth in commercial vehicle loans, the bank’s advances grew 32 per cent, compared to the year-ago period and eight per cent compared to the previous quarter. “The bank’s loan book saw a robust growth due to the increase in consumer loans by 41 per cent, with commercial vehicle loans shooting up by 22 per cent,” said managing Director and Chief Executive Officer Romesh Sobti.
The bank's deposits saw a growth of 28.78 per cent in the first quarter, compared to the same quarter of the previous financial year. Deposits rose 2.6 per cent, compared to the previous quarter. Current account savings account deposits grew 49.26 per cent in absolute terms annually, and seven per cent compared to the last quarter.
Net interest margins (NIMs) for the quarter ended June stood at 3.41 per cent, up nine basis points from the previous quarter. “The deposits book saw heavy re-pricing in the quarter ended march. We now need to re-price the loan books to maintain the NIMs,” said Sobti. The cost of funds increased by around 70 basis points over the quarter due to an increase in interest rates on term deposits and savings bank account. The yield on advances rose by around 60 basis points over the quarter.
On the asset quality front, the bank’s net non-performing assets were marginally up at 0.3 per cent in the June ended quarter 2011 from 0.28 per cent in the previous quarter.
The bank’s capital adequacy ratio (CAR) stands at 14.99 per cent as on June 30, 2011. “We are well capitalised as of now. Going ahead, we might raise Rs 300-500 crore through Tier-II bonds towards the end of the second quarter or in early part of the third quarter,” said Chief Financial Officer S V Zaregaonkar.
