ING Vysya Q3 net drops 13% on higher provisioning

ING Vysya Bank reported a 13 per cent drop in net profits in the December quarter on higher provisioning. The Bengaluru-headquartered private sector bank recorded a net profit of Rs 145.7 crore as against Rs 167.3 crore in the corresponding year-ago quarter.

The net interest income (the difference between interest earned and expended) grew 18.1 per cent during the quarter to Rs 491.6 crore. The net interest margin was stable at 3.37 per cent. Other income decreased by 4.2 per cent to Rs 205.6 crore from Rs 214.6 crore. Other income in the December quarter last year included a one-off income of Rs 22.5 crore from the sale of a strategic investment.

Total income increased by 10.5 per cent to Rs 697.2 crore from Rs 630.7 crore. The operating costs were up 17 per cent at Rs 417.1 crore from Rs 356.4 crore and was mainly on account of higher accruals for pension benefit due to a sharp decline in interest rates, said Uday Sareen, CEO-designate of ING Vysya Bank.

The bank made a higher provision of Rs 61.5 crore (Rs 23 crore in the year-ago quarter). The provisions and contingencies during the quarter included Rs 19.8 crore amortisation related to asset sale to a reconstruction company in the first half of the current year. The provision coverage ratio stood at 64.88 per cent as at December 31, 2014.

“Our customer assets and deposits grew by a healthy 18 per cent. We continued to invest in our network and have added 10 branches and 15 ATMs during the quarter,” Sareen said. ING Vysya recently approved the proposed merger with Kotak Mahindra Bank. “We have commenced the process of getting the mandatory regulatory approvals for the same,” Sareen added.

The ING Vysya Bank scrip ended flat at Rs 978.20 on the BSE on Wednesday.


Source : Thehindubusinessline