ING Vysya Bank reported a 13 per cent drop in net profits in the December quarter on higher provisioning. The Bengaluru-headquartered private sector bank recorded a net profit of ₹145.7 crore as against ₹167.3 crore in the corresponding year-ago quarter.
The net interest income (the difference between interest earned and expended) grew 18.1 per cent during the quarter to ₹491.6 crore. The net interest margin was stable at 3.37 per cent. Other income decreased by 4.2 per cent to ₹205.6 crore from ₹214.6 crore. Other income in the December quarter last year included a one-off income of ₹22.5 crore from the sale of a strategic investment.
Total income increased by 10.5 per cent to ₹697.2 crore from ₹630.7 crore. The operating costs were up 17 per cent at ₹417.1 crore from ₹356.4 crore and was mainly on account of higher accruals for pension benefit due to a sharp decline in interest rates, said Uday Sareen, CEO-designate of ING Vysya Bank.
The bank made a higher provision of ₹61.5 crore (₹23 crore in the year-ago quarter). The provisions and contingencies during the quarter included ₹19.8 crore amortisation related to asset sale to a reconstruction company in the first half of the current year. The provision coverage ratio stood at 64.88 per cent as at December 31, 2014.
“Our customer assets and deposits grew by a healthy 18 per cent. We continued to invest in our network and have added 10 branches and 15 ATMs during the quarter,” Sareen said. ING Vysya recently approved the proposed merger with Kotak Mahindra Bank. “We have commenced the process of getting the mandatory regulatory approvals for the same,” Sareen added.
The ING Vysya Bank scrip ended flat at ₹978.20 on the BSE on Wednesday.