Money & Banking

Strong growth in loans lifts IndusInd Bank net 34% in Q3

Our Bureau Mumbai | Updated on November 15, 2017 Published on January 10, 2012

Mr Romesh Sobti, MD and CEO, Induslnd Bank (right), andMr Paul Abraham, COO, announcing the bank’s results inMumbai on Tuesday. — Shashi Ashiwal

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IndusInd Bank's net profit increased by 34 per cent to Rs 206 crore, in the December-ended quarter, from Rs 154 in the corresponding year-ago quarter.

Strong growth in advances and lower provisioning on account of decline in bad loans helped the bank post good growth, said Mr Romesh Sobti, Managing Director.

“We have not seen any uptrend in delinquencies. Restructured advances have also fallen to 0.22 per cent of total advances,” he said, while announcing the bank's third quarter results.

The higher cost of deposits resulted in compression in Net Interest Margin, but going ahead NIM will improve, Mr Sobti said. Savings bank accounts increased by 21 per cent over the preceding quarter following the hike in interest rate. But current accounts saw a slight dip, as in the preceding quarter the bank had float money from dividend warrants payout, which was not available in the third quarter.

“Following the de-regulation in savings bank interest rates we are adding about 50,000 new customers every month. The increase in branch network has also helped,” Mr Sobti said.

Corporate, retail loans

The year-on-year growth in corporate loans was 16 per cent, while the retail loan book was up 48 per cent.

The share of the retail or consumer finance division (which includes commercial vehicle finance) to the total loan portfolio, has increased from 40 per cent to 48 per cent.

The bank has not seen rise in delinquencies as the exposure to sensitive sectors such as telecom, power, construction, and so on, is very small, Mr Sobti said.

In the power sector it has sanctioned only working capital loans to existing power generating companies. Similarly, the share of loans to the construction sector has come down from 2 per cent to 4 per cent.

Shares of IndusInd Bank closed at Rs 260.85, up 6.19 per cent, on the BSE on Tuesday.

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Published on January 10, 2012
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