IndusInd Bank Q2 net surges 30% to Rs 560cr; to cut base rate

Mid-sized private sector lender IndusInd Bank today reported a 30 per cent rise in September quarter profit at Rs 560 crore on jump in performance across income lines.
The lender had posted a profit of Rs 430 crore for the July-September period last year.
Its core net interest income was up 31 per cent to Rs 1,094.28 crore on 0.20 per cent widening in the net interest margin to 3.88 per cent on the back of a dip in cost of funds.
The component of the low-cost current and saving account deposits also grew to 34.74 per cent from 33.89 per cent year ago.

The non-interest income was up 32 per cent to Rs 783.54 crore on a handsome jump in trade and remittances and fees earned from distribution of insurance and mutual funds.
The bank's Managing Director Ramesh Sobti today said it will be announcing a significant cut in its base rate next week, as it shifts to the marginal cost of funding-based formula to compute the offering as suggested by RBI.

At present, the bank adopts a hybrid model where it takes into account both the average cost of funds as well as the marginal cost of funds, he said, without divulging the exact extent of cut being planned.

Sobti said the bank had cut its rates by 0.15 per cent after the RBI's prodding to banks in April.
He said the margins have also improved due to an increase in the proportion of higher margin retail loans, including the credit extended to truck owners which is showing an uptick after two years.
From a high of 49 per cent, the share of retail had fallen to 41 per cent and stood at 43 per cent as on September end, he said, adding that the bank is targeting to get it up to nearly 50 per cent by end of the fiscal.

The commercial vehicle segment is doing good due to both better realisations and a drop in the price of diesel, he said, adding that the asset quality troubles around the portfolio have also subsided.