IndusInd Bank, which has been delivering a steady and healthy growth in earnings, did not disappoint investors in its latest September quarter results. Thanks to the strong traction in loans, improvement in margins and stable asset quality, the bank continued to maintain its run rate of 25-30 per cent growth in profit that it has clocked in recent quarters. For the September quarter, the bank delivered net profit growth of 26 per cent over the same quarter last year, driven by a robust 33 per cent rise in core net interest income. This was due to a 26 per cent growth in loans led by both the corporate and retail segments.
Within the retail space, commercial vehicle loans, that constitute over a third of its retail portfolio, grew by 14.9 per cent year-on-year in the September quarter. After clocking 33 per cent in 2015-16 and 21 per cent in the June quarter, the growth in this segment has been slightly muted in the September quarter, due to slowdown in CV volumes. Other segments such as car loans, credit card and loan against property have however delivered strong growth. The good traction in the high-yielding loans has aided margins along with the fall in cost of deposits.
During the September quarter, the bank’s cost of deposits reduced by about 30 basis points sequentially, higher than the fall in yield (on loans). Net interest margin inched up to 4 per cent, among the best in the industry.
IndusInd also continued to deliver a healthy growth in deposits, at a time when deposit mobilisation has been challenging for many other banks. The bank reported a 39 per cent growth in deposits in the September quarter. CASA continued to grow at a faster clip, by 46 per cent.
Stable asset qualityThe bank reported steady asset quality during the quarter. The gross non-performing assets (GNPA) have been stable at 0.9 per cent of loans, marginally down from the June quarter. Restructured assets as a proportion of loans are also at a comfortable 0.44 per cent. The bank sold one account worth ₹41 crore to asset reconstruction company during the September quarter. There has been some pressure in the loan against property book, where GNPA has inched up from 0.68 per cent in the June quarter to 0.71 per cent in the September quarter.