IndusInd Bank net up 25% at ₹880 crore in Q2
Healthy loan growth, low-cost deposits help in steady performance
Healthy growth in advances and low-cost deposits helped IndusInd Bank report a 25 per cent increase in second quarter net profit at ₹880 crore against ₹704 crore in the year ago period.
The private sector bank’s net interest income (difference between interest earned and interest expended) was up 25 per cent at ₹1,821 crore.
Other income, comprising distribution fees, loan processing fees, investment banking, foreign exchange income, trade and remittances, and trading income, among others, rose 22 per cent to ₹1,188 crore.
Net interest margin (NII/ average interest earning assets) in the reporting quarter was steady at 4 per cent.
Overall advances increased by 24 per cent to ₹1,23,181 crore. Corporate advances were up 26 per cent to ₹73,716 crore and Romesh Sobti, MD and CEO
consumer finance advances were up 22 per cent to ₹49,465 crore.
While vehicle financing had suffered over the last few quarters due to the impact of BS IV (emission) norms, demonetisation, and implementation of GST, September was a record month for the bank in terms of commercial vehicles loan disbursement (of ₹2,300 crore), said Romesh Sobti, MD & CEO.
Overall deposits were up 26 per cent to ₹1,41,441 crore. Within this, savings bank deposits soared 95 per cent to ₹40,157 crore.
Slippages during the reporting quarter were lower at ₹498 crore (₹608 crore in the preceding quarter).
Gross NPAs to gross advances ratio nudged up from 0.90 per cent in September 2016 quarter to 1.08 per cent in the September 2017 quarter.
Of the 40 large stressed accounts referred by the lenders’ consortium to the National Company Law Tribunal (NCLT) for resolution, Sobti said his bank had an exposure to nine accounts. The bank has made a provision of ₹36 crore towards these accounts.
IndusInd Bank shares closed at ₹1742.60 apiece, up 1.47 per cent over the previous close on the BSE on Thursday. At the industry level, bank credit growth has been languishing at 5-8 per cent levels over the past three years. A few banks though, have remained resilient, clocking healthy earnings growth during this period. IndusInd Bank, that has been registering 25-30 per cent earnings growth in the last couple of quarters, has not seen any material deviation from its robust past performance in the latest September quarter.
A well-diversified portfolio leading to above-industry loan growth, increasing share of lowcost deposits and higher proportion of fixed rate loans aiding margins, healthy growth in fee income and stable asset quality — these sum up the bank’s performance in the latest September quarter. The bank’s 25 per cent growth in net profit during the September quarter, has been achieved thanks to the strong 24 per cent growth in loans and 25 per cent growth in net interest income. The healthy growth of 22 per cent in the bank’s fee income further aided earnings.
Apart from the healthy growth across key segments, growth in the commercial vehicle financing segment, that had moderated