Kicking off the results season for the banking sector, IndusInd Bank reported a 31 per cent rise in net profit at Rs 236 crore in the first quarter ended June 30, 2012.

It had posted a profit of Rs 180 crore in the year-ago period.

The bank attributed its quarterly financial performance to robust growth in ‘other income’ and improved loan book quality.

“Despite no relief to banks on the funding side, we have coped well in a deteriorating operating environment to deliver a healthy growth in the bottomline,” said Mr Romesh Sobti, Managing Director and CEO.

Core fee income, which is part of ‘other income’, rose 44 per cent at Rs 269 crore (Rs 187 crore in first quarter of FY12).

Net interest margin edged down to 3.22 per cent from 3.41 per cent.

Deposits, Advances

As on June-end 2012, total advances recorded a growth of 31 per cent while deposits were up 28 per cent from last year.

The bank’s corporate loan portfolio grew 28 per cent while the retail portfolio rose by 46 per cent (commercial vehicle loans account for 50 per cent of this).

“Though the asset quality outlook does not look great, we aim to increase our loan book growth by 20-25 per cent in the next quarter,” Mr Sobti added.

Equity dilution

In a conference call with analysts, the bank management said promoter shareholding could come down by 4-5 percentage points by the end of the current financial year. As on June-end, promoter shareholding in the bank was at 19.41 per cent.

The dilution in shareholding is in keeping with the Reserve Bank of India’s stipulation that promoter holding in private sector banks should gradually be brought down to 10 per cent, said Mr Sobti.

IndusInd Bank shares ended 0.25 per cent lower at Rs 342.50 on the Bombay Stock Exchange on Tuesday.

(This article was published on July 10, 2012)
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