IndusInd Bank Q2 net profit up 45% at Rs 193 cr

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IndusInd Bank Q2 net profit up 45% at Rs 193 cr

Private sector lender IndusInd Bank has reported a growth of 45% YoY in net profit of Rs 193 crore in the quarter ended September 2011. The company had posted a profit of Rs 133.2 crore in the corresponding quarter of last fiscal.

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Moneycontrol Bureau

Private sector lender IndusInd Bank's second quarter net profit rose 45% year-on-year to Rs 193 crore on the back higher fee income and loan book growth. While the loan book expanded 29% to Rs 30,136 crore, other income shot up 37% to Rs 239 crore. The core fee income rose 30% to Rs 212 crore.

"The key driver for our profit growth is our fee income," said Romesh Sobti, MD & CEO, IndusInd Bank, addressing a press conference here in Mumbai.

"We have added three fee boosters including credit card, loan against property and selling of loans from HDFC. Our credit card business, launched just four months back has turned profitable while loan against property has started picking up. We expect to maintain a growth of 25-30% in the next three years."

The bank recently tied up with mortgage lender HDFC for third party sales. According to the pact, IndusInd Bank will sell HDFC's home loan products to its own customers. In turn, the former will get commission from the latter. For example, IndusInd bank would earn a commission of Rs 1.5 for selling home loan worth Rs 100 on behalf of HDFC.

With this, the composition of total income has also changed. Interest income now accounts for 63% while the other income (fee income) generates the rest 37%. Earlier, the ratio was 65:35.
 
The bank has increased its focus on consumer loans (majorly auto loans). Currently, it stood at 43% of the loan book as against 57% corporate loans. Net interest income (NII) climbed 27% Y-o-Y to Rs 418 crore. However, the net interest margin (NIM) has sequentially fallen by 6 basis points to 3.41%.

"Our cost of funds have gone up by 52 basis points during the quarter in a rising interest rate scenario," said Sobti who refused to disclose the current cost of funds.

The new generation private sector lender managed to maintain its asset quality. Its net non performing assets was at 0.31%, little changed from June quarter (0.31%). Gross NPAs too almost remain unchanged at 1.09%.

Saikat Das

saikat.das@network18online.com