Riding high on fee-based income and growth in small loans, IndusInd Bank posted a Rs21.4 crore net profit for the January-March quarter. In the corresponding period of the previous year, the bank had posted a loss of Rs62.4 crore.
Gross income of the bank was at Rs483.34 crore in the January-March quarter, compared with Rs350.99 crore during the corresponding quarter last year. Its net interest income—the difference between the earnings on loan advances and interest expenses on deposits—rose 8.95% to Rs85.81 crore, up from Rs78.76 crore.
However, the net interest margin of the bank dropped marginally from 1.82% to 1.63% . This is because of the rise in cost of deposits, in line with the overall hardening interest-rate scenario. The outstanding deposit base of the bank has grown from Rs13,244 crore to Rs15,756 crore.
“We have adequately capitalized ourselves after the successful completion of our global depository receipts issue of Rs146 crore and raising Rs50 crore long-term debt that constituted the Tier-II capital of the bank,” said Bhaskar Ghose, managing director and CEO, IndusInd Bank. The bank’s shares on the Bombay Stock Exchange fell by 0.5% to close at Rs49.45 on Friday.
For the financial year 2006-2007, the bank earned a net profit of Rs68.22 crore, compared with Rs36.82 crore last year. For the whole year, the bank’s total income grew from Rs1,377.12 to Rs1,744.39 crore. Its non-interest income grew from Rs189 crore to Rs244 crore. This income came from the sale of mutual fund units, gold coins and other products.
Interest expenses for the bank, however, remained high on account of servicing high-cost bulk deposits that constituted 70% of its deposit base. The bank now wants to focus on increasing its low-cost deposits. “By the end of July this year, we will have 180 branches that will concentrate on garnering current and savings accounts,” Ghose said.
The non-performing assets of the bank have increased from Rs268 crore to Rs342 crore on account of a one large distressed account of Rs120 crore.