 "(From left) IndusInd Bank MD & CEO Romesh Sobti and CFO S V Zaregaonkar at a press conference to announce the bank's quarterly results in Mumbai on Tuesday")
Mid-sized private lender IndusInd Bank reported a 30 per cent increase in its net profit to Rs 581 crore led by good growth in non-interest income and other income. In contrast, Federal Bank and DCB Bank's October-December earnings missed Street estimates with both banks recording a slip in net profit.
IndusInd Bank's net interest income (NII or the difference between interest earned and interest expended) increased by 36.23 per cent to Rs 1,173.42 crore in the October-December quarter. In the same period, other income jumped by 29 per cent to Rs 839 crore.
The asset quality of the bank continued to remain steady with net non-performing assets (NPAs) at 0.33 per cent compared with 0.32 per cent in the same quarter last year. In the same period, gross NPA declined slightly to 0.82 per cent at the end of the quarter ended December from 1.05 per cent in the year-ago period.
"We have witnessed a healthy bottom line which has been fuelled by strong revenue growth and good growth in net interest income. The growth in NII has been supported by both corporate and retail. We have also been trying to rebalance our corporate and retail book and bring it towards the 50-50 mix and that also has a good impact on our margins and yields," said Romesh Sobti, chief executive officer and managing director of IndusInd Bank.
At present corporates account for 56 per cent of the total loan book.
IndusInd Bank has also partnered with mobile wallet player PayU India to increase its focus on the payments and digital space.
"With this partnership, we are bringing the cutting edge online payments technology and a bouquet of conventional banking services together for one of its kind in the history of Digital Banking," said Shailaz Nag, chief operationg officer and co-founder, PayU India. The lender said this integration will take the bank's 'OntheGo' digital banking proposition ahead.
Unlike IndusInd Bank, Federal Bank's net profit fell 38.5 per cent year-on-year to Rs 162.7 crore on account of a decline in other income and sluggish growth in NII, which increased by only three per cent to Rs 605 crore in the quarter ended December 2015, compared with Rs 587.2 crore in the corresponding quarter in the last financial year. Other income, which includes income from fees, commissions, forex etc. declined by 17 per cent to Rs 183.3 crore. The management explained that other income declined on the foreign exchange business not performing well due to subdued economic activity.
The bank continued to face pressure on asset quality with gross NPAs as a percentage of gross advances increasing to 3.15 per cent compared with 2.90 per cent in the preceding quarter and 2.19 per cent in the year-ago period. Net NPA increased to 1.66 per cent, compared with 0.69 per cent in the corresponding quarter in the last financial year.
"The slippages in the third quarter were higher and this is because there were two accounts from metal and one from shipping that had slipped. However, we believe that the book has been cleaned up and we may not see more pressure," said Shyam Srinivasan, managing director and chief executive officer, Federal Bank.
DCB Bank also saw its net profit declining by three per cent to Rs 41.2 crore on account of increased tax cost and provisions.
NII grew by 31.6 per cent to Rs 160.46 crore in the quarter ended December 2015 from Rs 121.9 crore in same quarter in the last financial year. However, even DCB's other income slipped 1.6 per cent year-on-year to Rs 47.2 crore. Tax expenses more than tripled to Rs 22 crore from Rs 7 crore. Provisions other than taxes also increased to Rs 21 crore from Rs 18 crore.
