IndusInd Bank Q4FY14 Net Profit Up 29%

IndusInd bank has announced its financial results for the quarter ended 31 March, 2014. The result is above the expectations of the street. Despite the tight monetary policy and slow economic growth, Net interest income (NII) of the bank has recorded a strong growth of 18.14% on y-o-y basis to reach Rs 781.2 crore in Q4FY14 as against Rs. 661.2 crore in Q4FY13. The Net Interest Margin (NIM) for the current quarter stood at 3.75% as against 3.70% in the corresponding quarter of previous year.

The operating profit for the quarter was Rs. 719.08 crore as against Rs. 543.45 crore in the corresponding quarter of the previous year, a rise of 32% while its net profit has gone up by 29% on yearly basis to Rs . 396 crore during the quarter.

Coming to the segment wise performance, the bank has shown a sharp increase of 25% on y-o-y basis in its retail banking segment which alone contributes to 50% of the revenue reaching Rs. 1497.2 crore in Q4FY14 as against Rs. 1193 crore in Q4FY13. Treasury operation, which accounts for 19% of the total revenue has also shown a similar trend and has gone up by 24.5% on y-o-y basis to Rs. 568 crore but its corporate banking segment, which stands for 30% of the revenue has increased by 8.4% on y-o-y basis to Rs.992 crore during Q4FY14.

As far as the bank's expenditure is concerned, the interest expended has shown 20% of an yearly growth and stands at Rs. 1398 crore in Q4FY14. On the other hand, its operating expenses and employee cost has increased by 20% and 16% respectively.

On the asset quality front, the bank has posted healthy numbers. Its gross NPAs have come down to 1.12% in Q4FY14 from 1.18% of total lending in Q4FY13 but its Net NPAs have been showing continuous marginal increase in numbers. NPA, in the current quarter stands at 0.33% as compared to 0.31% in Q3FY14. However, the bank provision has grown by 48.4% on y-o-y basis to Rs. 120 crore but the good thing is that on sequential basis, the provision has decreased by 4.5%. Return on Assets (RoA) for the current quarter has improved to 1.91% as against 1.77% in Q4FY13. On the other hand, Return on Equity has also increased and stood at 18.52% as against 16.70% last year.

During the year the bank has increased its presence. Its branch network significantly increased to 602 as against 500 branches in the previous year while ATMs increased to 1110 from 882 ATMs in the previous year.

For the full financial year 2013-14, the bank's net profit witnessed a yearly growth 32.7% to Rs. 1408 crore in FY14 against Rs. 1061 crore in FY13. Also, its advances and deposits have increased by 24% and 11.8% respectively. Interestingly, the bank has announced 35% of dividend as against 30% that it had announced previous year.

At CMP of Rs 487.4 the bank is trading at 3.34(x) of its price to book value.