Mumbai: Private player IndusInd Bank on Monday reported 30.27 percent rise in net profit to Rs 430.20 crore for the second quarter of the current fiscal, helped by a healthy rise in non-interest income.
The Hinduja Group-promoted lender's core net interest income rose 19 percent to Rs 833.11 crore, while non-interest income was Rs 558.27 crore, up 34 percent compared to the July-September quarter of last fiscal, 2013-14.
"Total income has increased from Rs 2,435.3 crore for the quarter ended September 30, 2013 to Rs 2,937.03 crore for the quarter ended September 30, 2014," said the bank.
The core fee income was up 31 percent at Rs 509.30 crore for Q2, 2014-15, aided by 41 percent rise in loan processing income, 25 percent in fees from distribution of insurance, credit cards and 35 percent increase in forex earnings, compared to the year-ago period, IndusInd Bank Managing Director Ramesh Sobti told reporters here.
After RBI's relaxation in norms to let top executives continue till the age of 70, the bank board has decided to approach the regulator for a three-year extension for Sobti.
Even though credit growth for the financial system plummeted to a decadal low, Sobti said the bank was able to restrict the fall and posted 22 percent increase in loans.
For the bank, the good news is that the auto and commercial vehicle loans -- a major component of its assets - are on the upswing after a year's lull, he said.
The non-auto retail component is also looking better, Sobti said, adding that those loans have now crossed the Rs 7,000-crore mark. The corporate loans now account for 57 percent of the overall book, while consumer finance is 43 percent.
The bank's net interest margin dipped by 0.02 percent at 3.63 percent due to a pressure on yields from corporate loans, Chief Financial Officer S V Zaregaonkar said, adding that there was almost a similar fall in cost of deposits as well.
The bank, which cut its savings bank offering to a minimum of 4.5 percent in September, is yet to see the impact of the move but its benefits will accrue soon, Sobti said.
The new customer addition has not suffered because of the move on rates and the bank continues to add around 55,000- 60,000 new customers every month, he said.
The bank is adding branches at a faster clip and will exceed its March 2015 target of 750, Sobti said, adding that it will close the year with 800 branches.
On the corporate side, there is a downward trend on rates as the demand for loans is very slow, IndusInd Bank Head of Corporate Banking Suhail Chander said.
The bank restructured four-five accounts during the quarter, Sobti said, adding around Rs 16 crore of assets were also sold to asset reconstruction companies.
Slippages were limited and the lender was able to contain its gross non-performing assets ratio at 1.08 percent in the July-September period.
The bank does not need any new capital till next year and will first analyse the market before coming out with an infrastructure bond offering, he said.
The bank did not make any provision towards unhedged currency exposures of its clients during the quarter, but Sobti added it will have to set aside Rs 20 crore over the next two quarters for it.
IndusInd Bank scrip closed 1.92 percent up at Rs 635.25 on the BSE, while the key index Sensex gained 0.33 percent.
