Private sector lender IndusInd Bank Ltd today reported 32 per cent growth in net profit for the July- September quarter at Rs 330.23 crore, mainly on higher core income and ability to minimise the treasury losses.
The Pune-based bank had posted profit of Rs 250.25 crore in the same period of 2012-13 fiscal.
On the impact of the Reserve Bank's liquidity tightening measures, IndusInd Bank Managing Director and Chief Executive Ramesh Sobti said: "The second quarter saw a very disruptive event which happened in mid-July while banks were preparing for rates to merrily go downwards and it dominated the quarter. But overall we got all lines going."
He said the bank took Mark-to-Market (MTM) loss of Rs 50 crore in the second quarter of 2013-14 fiscal. Following the hardening of bond yields after the tightening measures, RBI had granted one time relaxation to limit banks' treasury losses.
IndusInd Bank's core net interest income moved up to Rs 699.94 crore as compared to Rs 509.74 crore in Q2 of last fiscal, a growth of 37 per cent.
The bank's net interest margin for the second quarter was at 3.65 per cent, dipping by 0.07 per cent from preceding June quarter's 3.72 per cent, Sobti said, dismissing theories of an impact on banks with reliance on bulk funding.
He said IndusInd Bank lends bulk funding to the high-yielding corporate segment and depends on the low-cost current and saving account deposits for the retail lending.
With deposit rates going up following RBI moves in July, the bank utilised other options, especially availing of refinance from Nabard and Sidbi to keep its cost of funds in check, Sobti said.
"We are able to avail of the refinance because of our compliance with the priority sector lending targets," he said.
Excluding the treasury losses, its core fee income grew 32 per cent to Rs 389.48 crore as against Rs 296.10 crore in the Q2 of previous year.
Reacting to the results, the bank's scrip shed 0.14 per cent to close at Rs 427.35 apiece on the BSE, whose 30-share benchmark gained 0.38 per cent.
Explaining treasury losses, Sobti said: "There are two elements on MTM that we have taken - one element relates to the government security book on which we took MTM loss of Rs 15 crore and also there is a swap book, which is derivative book, on which we