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You are here : IndiaNotes >> Research & Analysis >> Companies >> IndusInd Bank Ltd. >> Research

IndusInd Bank Q3FY17: Net profit jumps 29%

SMC | 17 Jan, 2017  | Follow Author | Add to my Favourites 
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Private sector lender IndusInd Bank thrird Quarter Net Profit Jumps 29% To Rs 750.64 crore in-line with estimates.


IndusInd Bank has continued to post the strong earnings with robust asset quality. The bank has recorded sturdy 29% jump in the net profit to Rs 750.64 crore for the quarter ended December 2016 (Q3FY2017). The asset quality remained stable, while bank has maintained net interest margins (NIM) at strong level of 4.00% in Q3FY2017. The bank has maintained strong performance in Q3FY2017, despite the impact from demonetization of high value currency notes of Rs 500 and Rs 1000 from the midnight of 08 November 2016.


The healthy growth in core fee income as well as treasury income supported the overall growth in the non-interest income. Bank has recorded strong 25% growth in the loan book, which is way above the banking industry loan growth of around 5%. Bank has strongly expanded network strength adding new 40 branches in Q3FY2017, raising the branch count to 1075 at end December 2016.


Stable asset quality: Bank has continued to maintain the asset quality stable in Q3FY2017.

  • Fresh slippages for the quarter ended December 2016 were Rs 281 crore, while the deductions stood at Rs 209 crore.
  • Gross NPA ratio in the corporate book rose marginally to 0.79%, while in the retail book GNPA eased to 1.16% at end December 2016 from 0.73% and 1.17% at end September 2016.
  • Restructured advances book of the bank declined to 0.41% of the advances during the quarter under review from 0.44% at end September 2016 0.58% at end December 2015.
  • Provision coverage ratio was flat on sequential basis at 59.00% at end December 2016.
  • Capital adequacy ratio in Q3FY2017 was also stable at 15.31% end December 2016.

 

Business Highlights:


Strong business growth: Business of the bank increased 32% to Rs 221988 crore at end December 2016. The business growth was driven by surge in deposits by 38% to Rs 119218 crore, while advances growth was also strong at 25% to Rs 102770 2 crore at end December 2016.

 

Retail book growth increased 27% at Rs 40558 crore end September 2016. Meanwhile, the corporate loan book galloped 26% at Rs 58391 crore at end September 2016. The retail:corporate mix of the advances book of the bank stood at 41:59 at end September 2016.


Within the retail book, the auto loans segment growth strengthened to 21%, as commercial vehicle loan segment surged 15%, while car loans 22% and two wheelers loans 10% posted healthy growth in Q2FY2017.


Further, within the retail segment, the LAP/homes loans continued to record healthy growth at 36% at end September 2016. Credit cards also posted strong growth of 59%, while personal loans jumped 85% at end September 2016 over September 2015.


Within the corporate book, the large corporate loans grew 33%, while loans to mid-sized corporate moved up 20% and small corporate 22% at end September 2016.


CASA ratio improves: CA deposits galloped 57% to Rs 20467 crore, while SA deposits surged 37% to Rs 20567 crore at end September 2016. CASA deposits constituted 36.5% of the total deposits in quarter under review against 34.7% a year ago.


NIM rising: Bank has witnessed further 3 bps rise in the NIM on qoq basis to touch 4.00% in Q2FY2017 from 3.97% in Q1FY2017. Bank exhibited 13 bps qoq decline in yield on assets to 9.51%, while cost of funds dipped 16 bps qoq to 5.51% helping to boost NIMs.


Network expansion: Bank has added 31 branches in the quarter ended September 2016 taking the branch count to 1035 branches at end September 2016. Bank has also installed 50 ATMs in Q2FY2017 improving the ATMs strength to 1935 ATMs at end September 2016.


Book value stood at Rs 313.89 per share, while adjusted book value (adjusted for NNPA and 10% of restructured assets) stood at Rs 306.98 per share at end September 2016.



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