Private sector lender IndusInd Bank on Tuesday posted a 24 per cent rise in net profit at Rs 1,036 crore for the June quarter on the back of higher advances and core interest income. The Mumbai-based bank had posted a net profit of Rs 837 crore in the year-ago period.
The core net interest income rose 20 per cent to Rs 2,122 crore on the back of a 29 per cent loan growth, while the non-interest income moved up to Rs 1,301 crore from Rs 1,167 crore in the year-ago period. The net interest margin (NIM) narrowed to 3.92 per cent and the bank management said it will be stable at the 3.90 per cent level in the future as well.
Its managing director and chief executive Romesh Sobti said the bank had to book a mark-to-market (MTM) loss of Rs 85 crore on its G-sec portfolio. The reverses have been fully absorbed through provisioning, he said, adding that the profit growth would have been higher but for this impact.
Its overall provisions rose to over Rs 350 crore in the June quarter, from Rs 309 crore in the year-ago period. The gross non-performing assets (NPA) ratio improved marginally to 1.15 per cent, one of the lowest in its history and Sobti exuded confidence on this front going ahead.
Corporate advances increased 30 per cent, while retail lending was up 28 per cent. Vehicle loans, which can be called as the genesis of the bank, grew by over 50 per cent and Sobti said that there will be at least two years of "good-run" in this segment on demand from the construction sector.
The corporate advances growth was diversified, with insolvency resolution loans, power transmission and renewables being the largest users of credit, Sobti said, adding that with the capacity utilisation moving up to 74 per cent, there will be more capex going forward.
The bank is cautious but open to project finance proposals as well, he said. "We are in for a good loan growth, there is going to be more capex," he said, adding that the bank is well capitalised with a total buffers of 14.70 per cent.
He said completion of its merger with microlender BFIL will add another two percentage points to its capital adequacy ratio and the bank does not foresee a requirement in the near future. Sobti said the ongoing volatility in the rupee is a good opportunity for the bank, adding that it made gains of over Rs 228 crore on the forex front.
He said the bank does not expect MTM losses in the future as the yields will stabilise. The overall deposit growth came at 19 per cent and the share of the low-cost CASA deposits grew to 43 per cent.