IndusInd Bank's net profit up 29%

Bank's core fee income grew 28% to Rs 442 cr in the fourth quarter

IndusInd Bank has reported a 29 per cent growth in net profit to Rs 396.05 crore in the fourth quarter of FY14, on the back of robust growth in fee income as well as net interest margin (NIM).

The private sector lender’s core fee income grew 28 per cent to Rs 442 crore in the fourth quarter, while NIM was 3.75 per cent compared to 3.70 per cent a year ago. A decline in the cost of deposits has helped boost the bank’s margins.

According to the bank’s Managing Director and CEO Romesh Sobti, margins would remain stable.

For the full financial year (FY14), the bank’s net profit rose to Rs 1,408.02 crore recording a growth of 33 per cent. During the same period, the lender’s operating profit, too, swelled 41 per cent to Rs 2,595.96 crore.

Also read: IndusInd Bank slides as FII investment limit hits trigger

Following the Reserve Bank of India (RBI)’s permission to allow banks to amortise their investment losses over three quarters beginning the second quarter, the lender provided Rs 28 crore during the fourth quarter. In July-August 2013, RBI started squeezing liquidity out of the system to cut down rupee volatility. Owing to this, banks suffered losses in their investment portfolio.

IndusInd’s credit grew 24 per cent to Rs 55,102 crore, while deposits recorded a 12 per cent growth at Rs 60,502 crore. Current and savings account deposits accounted for 32.5 per cent of the bank’s total deposits.

The bank’s net non-performing assets (NPA) ratio stood at 0.33 per cent, compared to 0.31 per cent as on March 31, 2013. The bank has been selling bad loans worth Rs 25-35 crore every quarter to asset reconstruction companies.

Also read: Ashok Leyland sold shares of IndusInd Bank for Rs 149 cr

On IndusInd’s credit card business, which it started by acquiring Deutsche Bank’s card portfolio, Sobti said the bank would focus on credit card spends and not mere numbers.

Sobti, whose appointment has been extended by three years, said the bank is looking to grow its credit portfolio by 25-30 per cent during 2014-17.