IndusInd Bank net profit increased 47% y-o-y to Rs 1,003 crore for the quarter ended June, on the back of falling provisions and an improvement in asset quality. On a sequential basis, the bottom line was up 88.2%. According to Bloomberg estimates, analysts had pegged the net profit for the private sector bank at Rs 672 crore.
Asset Quality
Asset quality improved with gross non-performing asset (NPA) ratio at 3.25% as against 3.43% a quarter ago. Net NPA ratio stood at 0.95% lower as compared to 1% a quarter ago. Provisions declined by 23% on year to Rs 1,340 crore.
“Having substantially completed the balance sheet and earnings recalibration over the past year, the June quarter marked a “clear inflection point for the bank,” MD and CEO Rajiv Anand said in the post earnings call.
Revenue Performance
The net interest income was up merely 1% on year and 7.2% on quarter to Rs 4,685 crore. The net interest margin inched up to 3.57% from 3.39% a quarter ago. Other income declined 17.2% on year and the operating expenses were down by 8.6%.
The overall loan book declined by 2% on year to Rs 3.26 lakh crore, with the retail book down 4%, SME book down 5% and the wholesale book up just 1%. “On the retail side, seasonality is playing out, and disbursements are growing. I do expect those businesses, including SME, to start to show growth from Q2 onwards,” Anand said. Deposits grew 4% on year to Rs 4.14 lakh crore.
On FCNR(B) deposits, Anand said the bank, which has a 3.6% market share in the NRI segment, expects to garner at least a similar share of inflows under the FCNR(B) scheme through a mix of unleveraged funds, GIFT City leverage, and partner bank tie-ups.
On Wednesday, the shares of IndusInd Bank touched a fresh 52-week high of Rs 1,077.8 and closed 0.8% higher at Rs 1,072 on NSE.