IndusInd Bank posted a consolidated net profit of ₹1,964 crore, a growth of 58 per cent year-on-year, led by robust loan growth, a fall in provisions, and stable asset quality.
The consolidated results include wholly-owned subsidiary Bharat Financial Inclusion and IndusInd Marketing and Financial Services.
On a standalone basis, the private sector lender’s profit after tax was 68 per cent higher at ₹1,959 crore.
Advances rose 19 per cent to ₹2.7 lakh crore, led by a 20 per cent growth in corporate loans and an 18 per cent growth in vehicle finance loans. Disbursements for the quarter were 44 per cent higher YoY and 19 per cent QoQ at Rs 12,713 crore.
Consolidated net interest income (NII) for the quarter was ₹4,495 crore, up 18 per cent year on year and 4 per cent quarter on quarter. The net interest margin (NIM) for the quarter was 4.3 per cent compared with 4.1 per cent a year ago and 4.2 per cent a quarter ago.
Provisions and contingencies for the quarter fell 36 per cent to ₹1,065 crore, taking total loan related provisions to Rs 7,435 crore as of December end. The provision coverage ratio was 71 per cent.
In the post-earnings call, MD and CEO Sumant Kathpalia said that much of the ₹1,467 crore slippages for the quarter were from the microfinance portfolio, especially from the East Coast, and the medium and heavy commercial vehicle segment, specifically Odisha.
Kathpalia expects to see normalisation in the MFI portfolio from this quarter onward, saying that the stress is a matter of “a quarter or two.”
Gross NPA
The gross NPA ratio of the bank improved to 2.1 per cent from 2.5 per cent a year ago but was flat on a sequential basis. The net NPA ratio of 0.6 per cent was also unchanged from the previous quarter but slightly better than the 0.7 per cent recorded in the previous year.
IndusInd Bank’s deposits grew 14 per cent on year to ₹3.3 lakh crore as of December 31, on the back of 14 per cent growth in low-cost CASA deposits, which accounted for 42 per cent of total deposits at the end of December.
On increasing cost of funds for banks, Kathpalia said that the bank has the ability to pass on the higher interest on deposits to customers, owing to which the bank has been able to maintain its NIM around 4.15-4.25 per cent over the last six quarters.
The capital adequacy ratio of the bank was 18.01 per cent, slightly lower than 18.06 per cent a year ago. Of this, tier-1 capital accounted for 16.47 per cent.