IndusInd Bank net up 52% on surge in fee income

Mumbai: Private sector IndusInd Bank on Friday posted a 52 per cent jump in net profits for the quarter ended June 30 at Rs 180.18 crore, helped by a surge in fee income.

The city-based lender's net profit for the April-June period last fiscal had stood at Rs 118.55 crore.

“The core fee income grew 44 per cent to Rs 187.07 crore due to an increase in our third party products, trade and remittances, foreign exchange and investment banking income,” said IndusInd Bank Managing Director and Chief Executive Romesh Sobti.

The net interest income (NIM) was up 32 per cent during the reporting period to Rs 390.01 crore as compared to Rs 295.68 crore during the same period a year ago.

“In spite of the high interest rate environment, the bank was able to widen its net interest margin by 9 bps to 3.41 per cent,” Sobti said.

The cost of deposits went up to 7.71 from the previous (January-March) quarter's 7.03 per cent, but the bank made up for that by raising its base rate three times, or 125 bps, during the quarter to maintain margins, he said.

Its sequential (over Q4 FY 11) credit growth stood at 8 per cent, while the same on a year-on-year basis stood at 31.36 per cent. The deposit growth was a tepid 3 per cent on sequential basis and 28.78 on a Y-o-Y.

IndusInd's total capital adequacy increased to 14.99 per cent as on June 30, 2011, as compared to 13.71 per cent during the year-ago period.

“To further strengthen the capital base, the bank is planning to raise Rs 400 crore in Tier-II bonds,” Sobti said.

“We will come out with the issue by end of second quarter or early third quarter...we are yet to firm up plans,” he added.

On the lending side, advances to corporates grew 25 per cent, helped by working capital loans, while a strong push in the vehicle finance segment saw consumer loans growing by 41 per cent during the quarter under review, Sobti said.

The bank does not have much exposure to long-term infrastructure loans, he said.

The share of the cheaper CASA (current and savings account) deposits grew 28.20 per cent as compared to 24.33 per cent in the year-ago period.

On the asset quality front, the net non-performing assets ratio improved by narrowing it down 8 bps to 0.38 per cent during the quarter.

The bank's stock ended 0.74 per cent up at Rs 285.65 on the Bombay Stock Exchange on Friday.

Source: Financial Express