The bank's results may not be reflective of the sector's performance during the quarter as most banks are expected to see higher accretion of bad loans.
IndusInd Bank, the first bank to announce its fourth quarter numbers, on Thursday reported 25.1% growth in net profit during January-March quarter to Rs 495.3 crore, driven by better operational efficiencies, higher other income and lower provisions.
The bank's results may not be reflective of the sector's performance during the quarter as most banks are expected to see higher accretion of bad loans.
Advances of the private sector lender during the quarter shot up 24.8% on yearly basis to Rs 68,788.2 crore, outpacing the industry average of 11%. The growth in advances was led by a 15% year-on-year growth on the commercial vehicle portfolio to Rs 10,618 crore. The deposits reported a 22.5% year-on-year growth at Rs 74,134.36 crore.
Romesh Sobti, managing director and chief executive officer, said in a press conference, "Though the industrial momentum is slow-paced, we can see steady credit up-tick, which would accelerate growth in the coming quarters. Already the commercial vehicle has picked up. We have also opened over 200 branches during the year. There is a strong linearity between branch opening, CASA (current account, savings account) growth and fee income."
The net interest margin (NIM), a key performance indicator, was at 3.68%. Net interest income (NII) rose 18.4% to Rs 925.14 crore. Other income (non-interest income) jumped 26% year-on-year to Rs 658.48 crore, driven by a 29% rise in fee income. The rise in NII helped offset a 25% rise in operating expenses to Rs 733 crore.
The improvement in the asset quality helped the provisions for bad loans to drop 10.9% over the previous year. But the provisions of the bank were up 9.6% sequentially to Rs 107.44 crore in the fourth quarter of financial year 2014-15. The bank also increased its branch network to 810 branches against 602. The bank said it focuses on short-term advances which helps it earn higher yield on advances and also a better asset quality.
On Thursday, the bank shares closed 1.57% lower on the Bombay Stock Exchange (BSE).
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