In­dusInd Bank net up 25% at ₹880 crore in Q2

Healthy loan growth, low-cost de­posits help in steady per­for­mance

The Hindu Business Line - - BANKING - RADHIKA MERWIN

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

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