IndusInd Bank’s Q1 net profit rises 26%

Private sector lender IndusInd Bank’s first quarter net profit rose 26 per cent on healthy interest income as the bank bucked the industry norm to grow its advances book at a fast clip.

The bank’s net profit rose to ~836.55 crore in the quarter ended June, compared with ~661.38 crore in the year-ago quarter. The bank's net interest income, or the interest earned minus interest expended, rose 31 per cent.

The net interest margin, the difference between yield on advances and cost of fund, was flat at 4 per cent.

The deposit and credit grew at 31 per cent and 24 per cent respectively in the full-year period. The growth in business was aggressive, considering the full-year credit and deposit growth in the whole of the banking system were only at 6 per cent and 11 per cent, respectively. The capital adequacy ratio (CRAR) improved to 16.18 per cent from the 15.31 per cent in the previous quarter. However, the bank has no plans to raise equity to improve the ratio, said Managing Director Ramesh Sobti.

The gross non-performing assets (NPAs), as a percentage of total advances, in the present quarter stood at 1.09 per cent, from 0.93 per cent in the March quarter. In the year-ago quarter, the gross NPA ratio was at 0.91 per cent. Provisions for the quarter saw a 38 per cent dip to ~309.97 crore from ~430.13 crore a quarter ago. However, it was a 34.5 per cent rise from ~230.47 crore. Sobti said of the 12 accounts identified by the Reserve Bank of India (RBI) for insolvency, the bank had a total exposure of ~50 crore for three accounts. These have been adequately provided for, he said.

In the quarter, the lender has made a floating provision of ~70 crore against the account of J P Associates, reversing a provision of ~122 crore made in the fourth quarter of FY17.