Home >Market >Mark-to-market >ING Vysya falls short in December quarter

ING Vysya Bank Ltd’s December quarter results fell short of market expectations with net profit falling 13% from a year ago. Operating profit growth was also an insipid 2%. The key concern for investors, however, would be asset quality. While there were no nasty surprises in terms of huge additions to bad loans or restructured advances, things haven’t turned the corner totally either.

Fresh slippages rose to 275 crore in the December quarter compared with 190 crore in the preceding three months. About 85 crore were slippages from already restructured accounts. The pace of recoveries and upgrades also faltered. Thus, gross non-performing assets (NPAs) increased by 128 crore from the previous quarter. The firm’s restructured advances outstanding were little changed from the previous quarter.

With the window for restructured assets closing down by the end of the current quarter, the bank admitted there could be some pressure on this front. Currently, restructured assets as a proportion of advances are 1.3%. Along with net NPAs of 0.66%, its stressed-asset portfolio is 1.96%. By the end of March, the firm expects this ratio to be close to 2.5%. It is a middle-of-the road asset quality number and shouldn’t cause much jitters unless things worsen dramatically. With ING Vysya’s shareholders approving the merger with Kotak Mahindra Bank Ltd, it is likely that the stock price will track the latter’s.

The writer doesn’t own shares in the above-mentioned companies.

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