The Hindu Business Line : IndusInd Bank net drops 47 pc in Q2

INDUSIND Bank's net profit declined 46.5 per cent to Rs 31.49 crore during the quarter ended September 30, from Rs 58.91 crore during the corresponding quarter last year.

The decline is mainly due to lower net interest margin and higher operating expenses.

Mr Bhaskar Ghose, Managing Director and CEO, IndusInd Bank, said, "The drop in profits are due to three factors - temporarily reduced net interest margin, lower trading profit on sale of investments and higher operating expenses, the bulk of which had been due to the rapid branch expansion undertaken by us."

The total income dropped to Rs 352.03 crore from Rs 357.22 crore. Net interest income was lower at Rs 91.42 crore (Rs 99 crore). The capital adequacy ratio has come down to 10.88 per cent (13.17).

Mr Ghose said the expenses had been higher on account of opening new branches after its merger with Ashok Leyland Finance Ltd. "As our retail branches grow and the volumes pick up, deposit costs will come down and the net interest margin will grow."

The net profit in the six-month period ended September 30, also declined by 31.17 per cent to Rs 71.85 crore from Rs 104.39 crore during the year-ago period.

The total income rose to Rs 701.89 crore (Rs 694.52 crore), while total expenditure increased to Rs 561.87 crore (Rs 492.4crore). The bank may go in for a GDR issue in the next 10 months to raise further capital. The shares closed at Rs 50.75 on the BSE, down 3.97 per cent from the previous close of Rs 52.85.

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