Mumbai : IndusInd Bank reported a 27 per cent rise in net profit on-year for the fourth quarter of FY18, mainly due to higher interest income, even as the bank reported an uptick in non-performing assets (NPAs) and its computation of bad loans showed a divergence from the central banks assessment for FY17.
Net profit rose to Rs 953 crore from Rs 752 crore a year ago as net interest income increased 20 per cent on-year in FY18.
The lender reported an NPA divergence of Rs 1,350 crore for the fiscal year ended March 2017.
Here are the key takeaways from the banks results:Strong Loan Growth: Total advances rose 28 per cent to Rs 1.44 lakh crore from Rs 1.13 lakh crore, riding on demand for loans from both companies as well as consumers.
The demand for loans resulted in a robust 20 per cent rise in net interest income (NII) the core income for a bank.
The bank has sustained its growth story and maintained momentum in its financial numbers after a very challenging year, CEO Romesh Sobti said.Rise in NPAs: IndusInds NPAs increased slightly during the quarter as the bank added Rs 206 crore of bad loans.
Net NPA increased to 0.51 per cent of net advances, up from 0.39 per cent a year earlier and also up from 0.46 per cent reported a in the quarter ended December 2017.
Bank credit costs remained unchanged at 62 basis points.
Our aspiration is to bring our credit costs lower next year, closer to 50 basis points of our loan book, Sobti said.Divergence: IndusInd reported a divergence for the second consecutive year as gross NPAs were higher by Rs 1,350 crore after the RBI examination of its results in the fiscal ended March 2017.
The divergence included Rs 519 crore of bridge financing for a cement company and Rs 104 crore of loans to a toll road project.
The bank had to make an extra Rs 349 crore of provisions because of the divergence.
The banks shares dropped 0.57 per cent to end at Rs 1,834 per share even as the BSE Sensex rose 0.28 per cent.
Divergence was also higher than the Rs 506 crore reported in FY16.Robust Loan Book: Sobti, however, is confident that the banks loan book is rock solid.Our gross NPA, together with the restructured loan book, is down from 1.31 per cent in the third quarter to 1.23 per cent in the fourth quarter.
Our restructured book is just 5 basis points and our SMA 2 (special mention accounts) book is just 13 basis points of our loan book.
We have also increased our exposure to higher rated companies and AAA and AA rated corporate book now stands at 36.4 per cent as against 30 per cent in March 2016, he said.