ING Vysya Bank net up 34.6% in Q1 to Rs 175.1 crore

Rise in net profit was aided by 23.9% jump in NII for quarter to Rs 425.4 crore from Rs 343.3 crore in year ago period

Bangalore-based private lender ING Vysya Bank on Monday reported 34.6% rise in net profit at Rs 175.1 crore for the first quarter ended June 30, 2013 compared to Rs 130.1 crore in the corresponding quarter last year. This was the 15th sequential quarter of PAT growth.

The rise in net profit was aided by a 23.9% jump in net interest income (NII) for the quarter to Rs 425.4 crore from Rs 343.3 crore in the year ago period. The net interest margin was higher at 3.56% from 3.29% in the same quarter last year.

The total income for the quarter rose 30.3% to Rs 669.9 crore from Rs 514.2 crore in the June quarter last fiscal. The operating profit also recorded a robust jump of 50.3% to Rs 326.9 crore as against Rs 217.5 crore.

“During this quarter we have recorded consistent growth in all segments despite the first quarter being a weak quarter traditionally,” Jayant Mehrotra, chief financial officer, ING Vysya Bank said.

While the yield on advances reduced from 12% to 11.68% in the quarter, there was a 36 basis points reduction in cost of deposits and 47 basis points improvement in cost of funds, he said.

Other income increased by 43% to Rs 244.5 crore from Rs 171 crore. Other income included a recovery of a non-performing asset written off in an earlier year amounting to Rs 23.2 crore. Adjusting for this recovery, other income grew by 29.4% to Rs 221.2 crore with strong growth across core products such as asset processing fees, advisory fees, client related foreign exchange income and investment income while total income increased by 25.7% to Rs 646.6 crore.

Provisions and contingencies increased to Rs 68.1 crore from Rs 26.7 crore in the corresponding quarter of the previous year.

“The increase in provision is on account of the slippage of 2 medium sized companies amounting to Rs 115.3 crore in our Wholesale Banking space. The asset quality in our other businesses, including SME and Consumer Finance remained solid. Overall asset quality continued to be robust with Gross NPA ratio and Net NPA ratio at 1.75% and 0.19% respectively as at June 30, 2013 compared to 1.97% and 0.19% respectively as at June 30, 2012,” Mehrotra added.

Total restructuring in this quarter was Rs 3.6 crore and the recovery on account of written off accounts was Rs 24 crore. Return on assets improved significantly to 1.33% from 1.11% in the quarter ending June 2012.

The Capital Adequacy Ratio (CAR) of the Bank as at June 30, 2013 was 12.59% (as per Basel-III). Taking into account the recent capital raised through a QIP issue, the CAR would go up by 4%, which will be reflected in the second quarter, he said.