The Hindu Business Line : Rise in ‘other income’ boosts IndusInd Bank Q1 net

Mumbai, July 8 IndusInd Bank’s net profit increased four and half times to Rs 86 crore for the first quarter ended June 30, against Rs 19 crore in the same period last year. Substantial growth in other income and a healthy growth in interest income pushed up the bank’s net profits.

Other income was Rs 173 crore (Rs 65 crore) and this comprised fee-based income which increased to Rs 77 crore (Rs 58 crore). Treasury income was Rs 87 crore, against a loss of Rs 5 crore last year.

Cost of deposits was lower at 7.79 per cent (8.14 per cent).

The bank also replaced about Rs 2,000 crore worth of high-cost bulk deposits in the June quarter, which helped to increase interest income.

The Net Interest Margin (NIM) was 2.6 per cent (1.68 per cent).

The proportion of low-cost current and savings accounts (CASA) increased to 20.2 per cent (17.61 per cent).

According to Mr Ramesh Sobti, Managing Director, IndusInd Bank, the aim is to increase CASA to over Rs 5,000 crore, from the current levels of Rs 4,400 crore.

“Our loan book is growing and we have a healthy pipeline. We hope to grow our advances at 25-30 per cent,” Mr Sobti said.

Retail loans, predominantlyvehicle loans, account for about 45 per cent of IndusInd’s loan book.

This fiscal, the bank is looking to enter the low- end of the housing loan segment of up to Rs 30 lakh. It will also renew its focus on auto loans, as the pricing has stabilised, Mr Sobti said.

QIP issue

The bank is also looking to raise about $75-100 million through a Qualified Institutional Placement (QIP) issue. This may dilute 10-15 per cent of the equity. It is aiming for a Capital Adequacy Ratio of 14 per cent.

“The QIP route is a transparent route as you will know who your investors are. You can also determine who your investors will be. This will bring a large investor base,” Mr Sobti said.

Shares of IndusInd Bank closed the day at Rs 83.25 on the BSE, up 7.14 per cent, from the previous close of Rs 77.7

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