However, the non-interest income growth of the bank was strong, which is driven healthy growth in core fee income and treasury income. Bank has recorded strong 29% growth in the loan book. Bank has strongly expanded network strength adding new 107 branches in Q4FY2019, raising the branch count to 1665 at end March 2019.
The NPAs of the bank have increased with the jump in fresh slippages to Rs 3688 crore with the classification of exposure of Rs 3004 crore to IL&FS group has NPA. The bank has also identified funded and non-fund based exposure of 1.9% of loan book as exposure to stressed entities.
Asset quality weakens: Bank has continued has witnessed moderation in the asset quality with slippages of one large account to NPA category in Q4FY2019.
Business Highlights:
Strong business growth: Business of the bank increased at accelerated pace of 29% to Rs 381262 crore at end March 2019. The business growth was driven by strong advances growth of 29% to Rs 186394 crore, while deposits growth accelerated sharply to 29% at Rs 194868 crore at end March 2019.
Retail loan book growth exhibited strong pace of growth at 27% at Rs 72684 crore end March 2019. Meanwhile, the corporate loan book also jumped 30% at Rs 113710 crore at end March 2019.
The retail:corporate mix of the advances book of the bank stood at 39.0 : 61.0 at end March 2019 compared with 39.5 : 60.5 at end March 2018.
Within the retail book, the auto loans segment growth was healthy at 24%, as car loans at 22%, three wheelers 24% and two wheelers loans 25% exhibited improved growth in Q4FY2019. The commercial vehicle loan growth eased to 23%.
Further, within the retail segment, the personal loans - homes loans continued to record healthy growth at 48% at end March 2019. Credit cards also posted strong growth of 63%, while loan against property increased 11% at end March 2019 over March 2018.
Within the corporate book, the large corporate loans grew 18%, while loans to mid-sized corporate moved up 30% and small corporate 59% at end March 2019.
CASA ratio steady: CA deposits increased 42% to Rs 29584 crore, while SA deposits moved up 19% to Rs 54486 crore at end March 2019. CASA deposits constituted 43.1% of the total deposits in quarter under review against 44.0% a year ago.
NIM declines: Bank has witnessed 24 bps decline in the NIM on qoq basis to 3.59% in Q4FY2019 from 3.83% in Q3FY2019. Bank exhibited 13 bps qoq decline in yield on assets to 9.51%, while cost of funds increased 11 bps qoq to 5.92% impacting the NIMs.
Network expansion: Bank has added 107 branches in the quarter ended March 2019 taking the branch count to 1665 branches at end March 2019. Bank has also installed 92 ATMs in Q4FY2019 improving the ATMs strength to 2545 ATMs at end March 2019.
Book value stood at Rs 437.6 per share, while adjusted book value (adjusted for NNPA and 10% of restructured assets) stood at Rs 400.0 per share at end March 2019.
Quarterly Performance:
NII growth slows as NIMs declines: Bank has reported 29% increase in the interest earned at Rs 5991.44 crore, while interest expenses rose mere 42% to Rs 3759.06 crore in Q4FY2019. Net Interest Income (NII) increased 11% to Rs 2232.38 crore in the quarter ended March 2019.
Healthy core fee income growth, treasury income spurts: The non-interest income of the bank increased 29% to Rs 1558.99 crore. The core fee income continued to increase at healthy pace of 27% to Rs 1419 crore, while trading income jumped 47% to Rs 140 crore in Q4FY2019.
Within the core fee components, the investment banking income jumped 16% to Rs 228 crore, forex income 47% to Rs 289 crore and loan processing fees 44% to Rs 328 crore. The distribution fees improved 11% to Rs 302 crore, while general banking fee rose 29% to Rs 84 crore and trade and remittance income 24% to Rs 189 crore in Q4FY2019.
The Net total income increased 18%, yoy, to Rs 3791.37 crore during the quarter ended March 2019.
Expense ratio rises slightly: The employee cost increased 6% to Rs 481.24 crore, while the other operating expenses moved up 25% to Rs 1242.44 crore, pushing up the operating expenses by 19% to Rs 1723.68 crore. The expense ratio improved sharply to 45.5% in Q4FY2019 compared with 45.0% in Q4FY2018, allowing the operating profit to rise 17% to Rs 2067.69 crore.
Provisions jump: The provisions and contingencies surged 365% to Rs 1560.69 crore compared to Rs 335.55 crore in Q4FY2018. The credit cost inched up to 108 bps in Q4FY2019 compared with 18 bps in Q3FY2019 and 19 bps in Q4FY2018.
The tax rate declined to 29.0% in Q4FY2019 compared with 33.5% in Q4FY2018, but the net profit dipped 62% to Rs 360.10 crore in the quarter ended March 2019.
Annual Financial Performance:
For the year ended March 2019 (FY2019), the bank has posted 8% decline in net profit to Rs 3301.1 crore. The net interest income improved 18% to Rs 8846.18 crore, while non-interest income advanced 19% to Rs 5646.72 crore in FY2019. The operating expenses increased 15% to Rs 6404.68 crore, but provision and contingencies jumped 164% to Rs 3107.65 crore. The expense ratio improved 146 bps to 44.2% in FY2019 compared to 45.7% in FY2018. The profit before tax declined 9% to Rs 4980.57 crore in FY2019. After considering 33.7% of effective tax rate, the net profit fell 8% to Rs 3301.1 crore in FY2019.
Indusind Bank: Financial Results
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