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Shashi Ashiwal

Branch expansion: Mr Romesh Sobti (left), Managing Director & CEO, Induslnd Bank, and Mr S.V. Zaregaonkar, Executive Vice-President & CFO, at a press conference in Mumbai on Thursday. –

Our Bureau

Mumbai, Oct. 16 IndusInd Bank’s net profit grew by 51 per cent to Rs 33.66 crore in the second quarter of 2008-09, aided by an increase in net interest income and growth in core fee income.

While the bank’s core fee income grew 53 per cent to Rs 89.67 crore (Rs 58.47 crore), its net interest income grew by 37 per cent.Despite an increase in the cost of deposits, the bank’s net interest margin after amortisation increased to 1.68 per cent (1.59 per cent), due to an increase in the yield on advances, said Mr Ramesh Sobti, Managing Director and Chief Executive Officer, IndusInd Bank.

The yield on advances increased by 92 basis points to 12.52 per cent (11.60 per cent). The revenue came from diversified sources - both balance sheet and off balance sheet items.

On his outlook for the third quarter, Mr Sobti was optimistic of preserving the bank’s net interest margin and even of achieving a slight improvement. Third party product finance, insurance sales and income from fixed securities will be major drivers of growth, he said.

The share of current and savings account (CASA) deposits to total deposits has increased to 18 per cent (14.16 per cent). The bank has targeted to increase CASA to 20 per cent by year-end.

The bank, which had raised Rs 222 crore through global depository receipts in June this year, has no plans of raising tier II capital at present, said Mr Sobti.

The net NPAs declined slightly to 2.21 per cent (2.43 per cent).

The net NPAs will further reduce by 80-90 basis points in the third quarter as a stressed asset has been recovered, with the first recovery instalment expected to come in soon, said Mr Sobti.

The bank, which has 180 branches, has applied for an additional 60 branch licences with the Reserve Bank of India, he said. Retail deposits grew by 25 per cent to Rs 8,487 crore.

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