The Hindu Business Line : IndusInd Bank net jumps on higher yield on advances

Mumbai, Oct. 27 Backed by a higher net interest income from good yield on advances, IndusInd Bank has posted 30.03 per cent higher net profit at Rs 22.34 crore for the quarter ended September 30, 2007, against Rs 17.18 crore during the corresponding quarter of the previous fiscal.

“Our yield on advances has jumped up sharply and that has contributed to the growth of net interest income,” said Mr Bhaskar Ghose, Managing Director. The yield on advances has gone up to 11.6 per cent (9.43 per cent).

The net interest income went up to Rs 85.73 crore (Rs 65.75 crore). The net interest margin stands at 1.58 per cent (1.34 per cent). “We have been able to post a good net interest margin because of higher yield on advances,” said Mr Ghose. The net non-performing assets increased to 2.43 per cent (1.71 per cent). Mr Ghose attributed the increase in net NPAs to the bank’s exposure last year with a private oil refinery company, which it has termed as ‘sub-standard’. The bank has already written off about Rs 50 crore of the total amount of Rs 170 crore.

The capital adequacy ratio of the bank stands at 11.77 per cent (10.31 per cent). “We want to maintain our CAR at 11.5 per cent and for this we might have to raise some capital,” he said. The Managing Director said that the bank might have to raise about Rs 20-30 crore of capital by this year-end to fund its business growth.

“We expect our business to grow at 20-25 per cent in the next few years,” he said.