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IndusInd Bank net profit rose by 28.84% in Q4

IndusInd Bank Ltd, net profit for the quarter ended March 2014 rose 28.84% driven by rise in interest income on account of loan demand and fee income.

, ET Bureau|
Updated: Apr 17, 2014, 04.11 AM IST
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IndusInd Bank on Wednesday registered 28.8 per cent jump in its net profit at Rs 396.05 crore for the fourth quarter ended March 31, 2014.  
IndusInd Bank on Wednesday registered 28.8 per cent jump in its net profit at Rs 396.05 crore for the fourth quarter ended March 31, 2014.  
MUMBAI: IndusInd Bank Ltd, net profit for the quarter ended March 2014 rose 28.84% driven by rise in interest income on account of loan demand and fee income. Net profit of the bank increased to Rs396.05 crore compared to Rs.307.4 crore, which is higher than the Rs373 crore estimated by a Bloomberg poll of 25 analysts.

``There is a pre-election rally in the equities market. That is not reflected in other markets. We have been able to maintain the trendline. The highlights of the results is improvement in the net interest margin,’’ said Romesh Sobti managing director and chief executive officer IndusInd Bank. The bank’s net interest margin--the difference between interest earned on loans and that expended on funds—improved by 5 basis point to 3.75% at the end of March quarter. One basis point is equal to one hundredth of a percentage.

``Capex is not come to a complete halt. Brownfield capex which is capacity enhancement is happening in steel, cement and textile machinery. It is not a complete across all sector collapse. Working capital loan demand is also coming. Second element of capex is to start a new project which is come to a complete standstill,’’ had said Romesh Sobti MD &CEO IndusInd Bank.

Net interest income or earned from the bank’s core lending business increased 18.14% to Rs.781.21 crore, from Rs.661.23 crore in the corresponding period last year. The bank’s advances book grew by 24% to Rs55,102 crore. Other income, or revenue earned through fees, rose 42.14% to Rs.522.92 crore from Rs.367.89 crore last year. The bank has taken an Rs88 crore hit for the full year on its treasury book as its booked mark to market losses.

``The results are in line with expectations while the provision costs is slightly higher than expected. The signs of non performing assets uptrend continue as expected with net non performing assets up 12% quarter on quarter to Rs1.8bn. Gross non performing assets flat quarter on quarter at Rs6.2bn. Higher provisions and 12% qoq increase in NNPA may point towards higher slippages,’’ said Emkay in a report.

``Other income growth partially helps 40% higher provisions at Rs1.2bn. However, the provisions coverage ratio still falls to 70.4% vs 74% in Q2FY14,’’ said Emkay.

Net non-performing assets at the end of the quarter stood at 0.33%, compared with 0.31% in the previous quarter. The bank sold Rs35 crore of bad loans to asset reconstruction company in the quarter which were largely commercial vehicle loans.

``Disbursements to commercial vehicle remain flat. All indicators point at an uptick in commercial vehicle as excess capacity has been used up. For any new capacity utilisation fleet owners will need to buy new vehicles. Hope the trend to reverse in the next two quarters,’’ said Sobti.

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