IndusInd Bank on Friday reported a lower-than-expected net profit of Rs 2,171 crore for the quarter ended June 2024 on account of lower margin and higher fresh slippages. The net profit was up 2% year-on-year (YoY), but was lower than the Bloomberg consensus estimate of Rs 2,332 crore .
Fresh slippages stood at Rs 1,536 crore and overall gross non-performing assets (GNPA) were at Rs 7,127 crore during Q1FY25. Microfinance loans contributed Rs 1,988 crore to bad loans while the contribution of business loans and loans against property towards gross NPAs was Rs 890 crore. Following higher slippages, provisions and contingencies rose 6% YoY to Rs 1,050 crore.
“There is an uptick in delinquency on credit cards by 20-30 bps in the industry, and at our bank portfolio, we are seeing 30-40-bps stress emerging in credit cards… I think credit cost of the cards business is within our means and the RoA is within the target range for card business,” said MD and CEO Sumant Kathpalia.
The net interest margin (NIM), a key indicator of banks’ profitability, moderated 4 bps YoY to 4.25% for the quarter review. However, it continues to remain in the 4.2%-4.3% guidance given by the management for the fiscal, Kathpalia said. Net interest income rose 11% YoY to Rs 5,408 crore.
IndusInd Bank was able to grow its overall deposits and advances by 15% each YoY. As on June 30, deposits stood at Rs 3.98 trillion and overall advances were at Rs 3.47 trillion. The return on asset, which moderated 20 bps YoY to 1.70%, will likely rise to 1.8%-2% in the current fiscal, the MD said.
According to the bank’s rough estimate, the Reserve Bank of India’s draft circular on banks’ liquidity coverage ratio (LCR) standards will likely have a 4-5% impact on the lender’s average LCR, which stood at 122% as on Q1FY25. Overall capital adequacy ratio was 17.55% at the end of the June quarter.