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Private lender IndusInd Bank posted a 30 per cent rise in net profit at Rs 430 crore on the back of robust non interest income and loan growth.
The mid-sized bank’s non-interest income (difference between interest earned and expended) increased 19 per cent to Rs 833 crore.
Non-interest income jumped 34 per cent to Rs 558 crore driven by healthy growth in distribution and core fee income. However, sequentially, non-interest income declined 3 per cent due to drop in trading gains.
“Retail is picking up and has not seen any slackening. It will only increase growth going forward. Vehicle financing saw more stability and flat slippages in the September quarter…We saw increase in disbursements in the CV segment,” said Romesh Sobti, MD and CEO, IndusInd Bank
Shares of IndusInd Bank closed at a new high of Rs 635.25 per share ending 1.92 per cent higher from its previous close on the Bombay Stock Exchange.
Better credit growth
Total loans increased by 22 per cent on healthy retail and corporate growth under working capital loans. Total deposits surged 24 per cent.
Lower provisions (money set aside for potential bad loans) at Rs 73 crore, down 18 per cent from Rs 89 crore, also helped profits.
The bank’s capital adequacy ratio fell to 12.96 per cent from 14.58 per cent last year. However, the bank does not plan to raise any capital this fiscal year.
Gross non-performing assets (NPAs) improved to Rs 655 crore (1.08 per cent of total NPAs) as against Rs 546 crore (1.11 per cent) in the second quarter last fiscal.
Showing revival signs, fresh slippages into bad loans lowered to Rs 113 crore in the September quarter from Rs 163 crore in April to June and Rs 188 crore in January to March. Restructured advances nudged up to 0.52 per cent of total loans.
“First quarter saw more sale to asset reconstruction companies (ARCs). However, with a drop in referrals to ARCs in Q2, the industry may see a drop in NPAs,” Sobti added.
CEO extension
The bank’s Board approved extension of Sobti as MD and CEO for three years, as the term was due to end in January 2015. The request for extension will be sent to RBI for approval.
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