Private sector lender Indusind Bank on Thursday reported 25 per cent growth in December quarter, primarily due to a surge in the working capital demand and boost in higher core income, which have increased its net profit to Rs 936.25 crore. The positive growth numbers of the bank indicate the reviving demand over doubling of credit growth. The bank, which has eight accounts in the list of 40 largest dud assets, does not see any impact of the proceedings as all, it says, the accounts have been necessarily provided for.
The city-based lender, promoted by the Hinduja Group, saw a 20 per cent rise in the key net interest income at Rs 1,894.81 crore on a 25 per cent growth in advances, while its deposits grew 23 per cent. Fee income grew 22 per cent to Rs 1,076.51 crore, while the spike in yields over the past few months resulted in a 17 per cent decline in the treasury income at Rs 110 crore.
Managing director and chief executive Ramesh Sobti said the bank saw a surge in demand for term-loans, which is indicative of a turnaround in the corporate sector. He said while working capital demand continues to dominate corporate loan growth, there are brownfield expansions happening for which funds are being sought. "There is real growth. We can sense it and we feel demand is reviving," he said, pointing out to a doubling of credit growth for the industry at over 10 per cent as being evident of this trend. The bank maintained its net interest margin at 4 per cent level, even as the share of the high-margin retail loans grew to 24 per cent during the reporting quarter.
Sobti said the bank saw a 20 per cent growth in the legacy vehicle loans, while the non-vehicle loans jumped 40 per cent on a lower base. The bank reported a minor surge in the gross non- performing assets ratio, which went up to 1.16 per cent on well-distributed reverses in loans against property, commercial loans and corporate loans. The lender is yet to be informed about divergences in bad loan recognition for fiscal 2017 and impact, if any, will be undertaken in the next quarter, Sobti said.
The bank continues to carry a Rs 70 crore floating provision created last June, which can be used in difficult circumstances. The credit cost rose to 0.58 per cent and Sobti exuded confidence of meeting the 0.60 per cent target for the fiscal, excluding the impact of divergences, if any. Its merger with microlender Bharat Financials has received the go-ahead from the Competition Commission and it will be now seeking approvals from Sebi and NCLT, he said.
The bank counter closed with a 2.08 per cent dip at Rs 1,698.60 on the BSE, as against 0.20 per cent gain on the benchmark Sensex.
With PTI inputs