IndusInd net at Rs 21.40 crore

IndusInd Bank today reported net profit of Rs 21.40 crore in the fourth quarter of 2006-07 against a loss of Rs 62.40 crore a year earlier. The bank's net profit for the year ended March 31, 2007 rose to Rs 68.22 crore from Rs 36.82 crore.

The net interest margin for the quarter and year dipped to 1.63 per cent (1.82 per cent a year earlier) and 1.91 per cent (1.37 per cent a year earlier), respectively.

The bank had to provide Rs 1.55 crore in the fourth quarter for standard assets and Rs 9.80 crore for the whole year.

"Low level of current and savings accounts (CASA) as a percentage of total deposits has been the traditional weakness of the bank. The low level of CASA has increased the bank's interest expenses. We plan to increase the share of CASA as a percentage of total deposit to 20 per cent from the existing 15 per cent. The opening of new branches and the bank's new initiatives on the wholesale banking side should help us attract current accounts and increase the share of CASA,'' said Bhaskar Ghose, managing director, IndusInd Bank.

The bank's capital adequacy ratio stood at 12.54 per cent. The bank recently raised Rs 147 crore through a GDR issue.

"We have no immediate plans to raise more tier I capital. However, we would raise funds through issuance of tier II bonds. If Basel II were to implemented immediately, the bank's capital adequacy would increase to 13.24 per cent,'' added Ghose.

"The Reserve Bank of India norm putting 5 per cent cap on single entity ownership in a bank has also affected the bank's plans to raise capital (through sale of a strategic stake),'' added Ghose. The bank's net non performing assets has increased to 2.47 per cent from 2.09 per cent. The rise in overall NPA was on account of the classification of the loan of Rs 120 crore given to a oil refinery company (legacy account) as substandard, he said.