Private sector lender IndusInd Bank today reported a 25 per cent jump in net profit for March quarter at Rs 620.35 crore, helped by a jump in retail assets that pushed its core interest income.
For the full year to March 2016, the Hinduja group-promoted lender reported a net profit of Rs 2,286.45 crore, up 27 per cent from the previous year.
Its managing director and chief executive Ramesh Sobti said the numbers were up primarily due to a 37 per cent increase in net interest income at Rs 1,268.21 crore.
This was aided primarily by a healthy jump in the high-margin retail advances, he said, adding the overall share of retail assets grew to 44 per cent of the loan book, up from the 41 per cent in December.
The bank traditionally has been heavily dependent on truck and bus financing considering the fact that group company Ashok Leyland is the second largest truck and bus maker in the country.
Sobti said the bank is targeting to get corporate and retail assets at an equal footing, but declined to give a timeline for the same.
The other income grew 31 per cent to Rs 912.80 crore, helped by a 27 per cent surge in the core fee income, while the net interest margin widened to 3.94 per cent, up over 26 basis points year-on-year and 3 basis points from the December quarter.
The bank, which has its roots in the vehicle finance space due to Ashok Leyland business, is also focusing on growing the non-vehicle finance business, which grew 45 per cent to occupy 10 per cent of the overall loan book.
Having suffered uncertainties in the past, the vehicle finance space grew for the third successive quarter, ending the year with a 22 per cent growth.
The non-vehicle lines include loans against property, shares, gold loans and credit cards, among others.
The city-headquartered lender is mulling to start selling credit cards through its partner PayUmoney from the second quarter, which will get the acquisition costs to a tenth of the current and also take its offering to the masses from the premium segment which it serves currently.
The gross non-performing assets ratio slipped 0.05 per
cent to 0.87 per cent in the March quarter on a sequential basis. Overall provisions doubled to Rs 213.66 crore from Rs 107.44 crore in the year-ago period, but Sobti said the credit cost for the fiscal came in at 0.57 per cent, below the targeted 0.60 per cent.
He exuded confidence to keep it under the same targeted mark in 2016-17 as well.
It opened 95 branches during the quarter taking the total to over 1,000.
Sobti said he is confident of reaching the 1,200-mark by the end of the current fiscal, and despite the advent of digital banking, the bank will continue opening branches.
The size and the composition of a branch will undergo a change, he said, adding the bank has prepared a 3-year digital roadmap which involves saving on the cost to income front due to automation of processes.
The roadmap, presented to the board today, includes targets on revenue uptick, cost saving, customer penetration and shift of business online, he said.
In spite of investments on new IT systems and opening new branches, the bank was able to get its cost to income ratio down to 47.22 per cent for March quarter from 47.28 per cent in the preceding quarter.
The bank scrip shed 1.35 per cent to close at Rs 971.65 on the BSE, while the Bankex and Bank Nifty rallied 2 per cent against the benchmark Sensex, paring all the gains to close with 0.14 per cent gain.
