The Hindu Business Line : Rise in interest income lifts IndusInd Q3 net

Mumbai, Jan. 30 IndusInd Bank has reported a 16 per cent jump in Q3 net profit at Rs 25 crore, against Rs 22 crore in the corresponding quarter of the previous year, spurred by interest income.

Net interest income was up 58 per cent at Rs 99 crore, against Rs 63 crore in the year ago period.

“In this quarter, the bank has shown good business growth and improved its profitability as well as net interest margin,” said Mr Bhaskar Ghose, CEO and MD, IndusInd Bank.

The net interest margin of the bank improved to 1.74 per cent in the third quarter from 1.27 per cent in the previous year. The contribution of vehicle finance to the total portfolio has reduced to 54 per cent, from 58 per cent last year.

The proportion of low-cost deposits (current and savings bank accounts) of total deposits rose to 15.2 per cent, against 13.7 per cent in the previous year.

The bank’s cost of deposits has risen from 6.83 per cent to 7.79 per cent, primarily due to the high proportion of term deposits. The yield on advances has also increased to 12 per cent from 9.89 per cent.

Non interest income fell 23 per cent to Rs 64 crore (Rs 83 crore) on lower recoveries from non-performing assets in comparison to the previous year.

The bank’s capital adequacy ratio stood higher at 12.04 per cent (11.10).

Raise capital

Mr Ghose said that the bank planned to raise additional capital before March 31, 2008. He, however, did not specify the amount or the route for raising capital. “We have issued capital of Rs 320 crore, while our authorised capital limit is Rs 400 crore. So, Rs 80 crore is the maximum that can be raised,” Mr Ghose said.

The percentage of Net Non Performing Assets to net advances fell to 2.42, from 2.55 per cent a year ago.

The bank has created a new marketing wing called “IndusInd Marketing Financial Services”, which earlier belonged to the Ashok Leyland group.

This company has 600 outlets and will be used to market retail banking products.

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