IndusInd Bank posted a 29 per cent jump in net profit for the fourth quarter ended March 2014 at ₹396 crore driven by, among others, robust growth in non-interest income and loans.
Net interest income (difference between interest earned and expended) grew 18 per cent to ₹781 crore.
Non-interest income soared 42 per cent to ₹523 crore helped by core fee income growth.
The mid-sized bank amortised mark-to-market treasury losses amounting to ₹28 crore during the quarter and ₹88 crore cumulatively for the full year. During the quarter, net interest margin (NIM) rose 10 basis points to 3.75 per cent.
Romesh Sobti, CEO and MD, IndusInd Bank, said: “Our corporate book grew faster than the retail book, which suffered largely due to a slowdown in vehicle financing.”
Though the RBI has dropped hints that interest rates will not be raised (even as there was no mention of a rate reduction in the monetary policy), Sobti felt that the interest rate cycle is likely to remain high for the next two quarters.
Though provisions towards bad loans increased 48 per cent to ₹121 crore during the quarter from ₹82 crore in the fourth quarter last year, the asset quality remained largely stable.
Gross non-performing assets (NPAs) deteriorated slightly to 1.12 per cent as on March 31, 2014, from 1.03 per cent last year.
Full-year results For the full year 2013-14, net profit increased 33 per cent to ₹1,408 crore from ₹1,061 crore reported a year ago. NII grew 29 per cent to ₹2,891 crore.
The bank has recommended 35 per cent dividend as against 30 per cent paid last year.
IndusInd Bank shares ended at ₹487.20 per share, up 0.63 per cent over its previous close on the Bombay Stock Exchange.
Bad loan recovery IndusInd Bank has sold about ₹35 crore loans to asset reconstruction companies (ARCs). Of the total ₹138 crore bad loans sold to ARCs so far, the bank expects to recover 50 per cent in the next six months.
Most of the assets sold are from the retail portfolio amid weakness in the vehicle financing segment.
“Our rate of recovery (through ARCs) is 90-100 per cent of the assets sold,” Sobti said.
Every year the bank sells ₹35-40 crore worth assets to ARCs.