Mumbai: Private sector lender ING Vysya Bank on Monday posted a forecast-beating 36% jump in net profit for the June quarter led by higher lending growth, fee income and better asset quality.
It posted a net profit of Rs940 million compared with about Rs691 million a year ago. Net interest income increased by a tenth to Rs262 crore.
A Reuters poll of brokerages had forecast net profit of Rs879 million for the quarter.
Its net interest margin, however, shrunk to 3.02% from 3.3% in March, but it expects that to “stabilise and improve” in the September quarter.
The lender, which has 515 branches across India, has raised lending rates twice in May and June, the full benefit of which will reflect from September quarter, chief financial officer Jayant Mehrotra told reporters on a conference call.
“Margins of the banks are a little under pressure, which was anticipated. But, since last quarter we are not shying away from passing on the higher costs to borrowers,” he said.
It raised base rate by 80 basis points to 9.7% during the quarter.
The RBI, one of the most aggressive central banks globally, has raised rates 10 times so far since March 2010 to battle inflation. In May, it surprised the market with a larger-than-expected 50 basis points increase and is widely expected to raise rates by 25 basis points again on 26 July.
ING Vysya’s gross advances grew at 2526 to Rs24,260 crore. It did not give guidance for lending and deposit growth for FY12.
Its net non-performing assets (NPA) as a percentage of total assets fell to 0.35% from 1.36% a year ago and Mehrotra said incremental slippages also came down during the quarter.
There are very few signs of stress on assets despite high interest rates, the bank said in a press release.
Ahead of the results, shares of the bank, valued at $116.1 million, closed up 0.93% at Rs348.65 in a weak Mumbai stock market.