Healthy advances push IndusInd net profit up 31% in Q1

Indusind Bank posted a jump in net for the June quarter at Rs 236.26 crore.

Private sector lender Indusind Bank today posted a 31 percent jump in net profit for the June quarter at Rs 236.26 crore on a healthy jump in retail loans and fee income.

The city-based bank had posted a post tax profit of Rs 180.18 crore in the April-June period last fiscal. Its total income grew to Rs 1,951 crore from the year ago period’s Rs 1,380 crore.

Bank’s Managing Director and Chief Executive Ramesh Sobti said the core net interest income grew 24 percent to Rs 484.10 crore while the fee income rose 44 percent to Rs 269.03 crore.

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Its credit growth stood at 31 percent to Rs 37,244.5 crore on the back of retail assets which grew 46 percent,while corporate loans rose 28 percent,Sobti said.

The jump in retail assets saw the bank reaching its stated “ideal mix” of an even division between retail and corporate loan books,Sobti said,adding that in the last June quarter,retail assets constituted 45 percent of loan book.

During reporting quarter,deposits grew 28 percent to Rs 45,075 crore even as other banks struggled to garner adequate deposits.

Unlike many of its peers,the Hinduja Group-promoted bank did not add any fresh assets to the restructured book,which stood still at Rs 91 crore in absolute terms,constituting for 0.24 percent of its advances.

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The bank was also successful in bringing down,marginally though,its net non-performing assets ratio to 0.27 percent versus the 0.30 percent last year.

“Going forward our loan book will grow in the 25-30 percent as per the guidance and we will be able to maintain fee income growth over the interest income,” Sobti said.

Despite the good show on most front,the bank saw a drop in net interest margin to 3.22 percent versus 3.29 percent in the preceding quarter and 3.41 percent in the year ago period.

Sobti attributed this to the still high deposit rates,even though there was a reduction in rates by the Reserve Bank in April. The actual borrowing cost for the bank has not come down due to which there has been a pressure on the margins,he

explained.

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The bank’s total capital adequacy ratio stood at 13.42 percent with the core tier-I at 10.62 percent.

Sobti said even though the bank is comfortable on the capital adequacy front,it will be raising money this year which will help promoters to bring down their stake to the stipulated 10 percent from the current 19 percent.

The bank is yet to decide specifics on the capital raising like the timeline and the total amount to be raised,Sobti said,adding a lot will depend on the market conditions.