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The second quarterly earnings season for the current fiscal began on a healthy note for the banking sector with IndusInd Bank posting a 30 per cent year-on-year growth in net profit at ₹560 crore on higher income. The bank had posted a net profit of ₹430 crore for the same period last year.
Net interest income (NII) was up 31 per cent at ₹1,094.28 crore (against ₹833.11 crore) while non-interest income was up 32 per cent at ₹783.54 crore (₹593.96 crore).
Net interest margin (NII expressed as a percentage of interest earning assets) improved 25 basis points to 3.88 per cent in second quarter of the current fiscal from 3.63 per cent in Q2 last fiscal. The bank’s loan book also grew 31 per cent y-o-y to ₹78,294 crore while deposits grew 22 per cent to ₹80,841 crore.
Low-cost deposits or CASA (current account and savings account) deposits constituted 34.74 per cent of the total deposit base and improved 85 basis points.
Bad loans as a percentage of total loans on a gross basis, called gross NPAs, declined 31 basis points to 0.77 per cent. Net NPAs declined two basis points to 31 basis points.
During the quarter, IndusInd Bank raised ₹43,27.98 crore funds through a qualified institutional placement besides a preferential allotment to its promoters for ₹752.74 crore.
The bank’s capital adequacy ratio on the basis of Basel-III compliance (which requires an additional 5 per cent to be set aside by banks as capital conservation buffer and counter-cyclical buffer) stood at 16.52 per cent (against 12.96 per cent) while its return on equity (returns to shareholders) declined 154 basis points to 16.70 per cent.
Commenting on the return on equity trend, Romesh Sobti, MD and CEO, said: “The focus on returns remains as intense as before and the bank would revert to its old levels soon.”
IndusInd Bank also completed the acquisition of the diamond and jewellery financing business (aggregating to ₹4,130 crore) from the Royal Bank of Scotland this quarter.
The bank’s branch network increased to 854 from 685 y-o-y while it added 301 ATMs over the last year to close the second quarter at 1,578.
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