Private sector lender IndusInd Bank on Thursday posted a 15% year-on-year (y-o-y) rise to Rs 2,349 crore in its consolidated net profit for the fourth quarter, aided by higher core and other income growth.
This was, however, lower than Bloomberg consensus estimate of Rs 2,402 crore.
The bank’s net interest income (NII) rose 15% y-o-y to Rs 5,376 crore. However, net interest margin (NIM) was down 2 basis points (bps) y-o-y at 4.26%.
The bank aims to maintain its NIM between 4.2-4.3% going ahead, MD & CEO Sumant Kathpalia said at a post earnings conference. The bank has declared a dividend of Rs 16.50 per equity share for FY24, subject to shareholders’ approval.
The lender’s other income rose 16% y-o-y and 5% q-o-q to Rs 2,508 crore, aiding the profit growth.Overall advances rose 18% y-o-y to Rs 3.43 trillion as on March-end. Retail loans accounted for 56% of the overall loan book, while corporate loans accounted for the rest. During FY25, the bank’s advances will grow between 18-22% and the loan mix will broadly remain same as FY24, Kathpalia said.
On liabilities side, overall deposits rose 14% y-o-y and 4% q-o-q to Rs 3.84 trillion. Low-cost current account and saving account (CASA) ratio, however, declined to 38% q-o-q, from 39%, and 42% y-o-y.
The MD said that though the banking industry is facing challenges in CASA accretion, the lender will aim to grow its retail deposit book and expand branches to 3,500 in next two years from 2,984 as on March-end.Further, the lender’s asset quality remained stable, with gross and net-non performing asset (GNPA and NNPA) ratio at 1.92% and 0.57% as on March 2024, lower than 1.98% and 0.59% a year ago, respectively.
The lender’s shares ended 1.5% higher at Rs 1,496 on the BSE. The lender is constantly making investments into building seamless digital channels, with a special focus on ensuring customers do not face service outages, Kathpalia said, adding that the bank spends about 8-10% of its overall cost to income into developing IT infrastructure.
“It (digital and IT expenses) ranges around 8-10% of our overall total cost to income. We invest a lot, for example, we have the best data products and latest technology,” the MD said. He added that every bank must evaluate their IT infrastructure and ensure it keeps pace with rapidly expanding operations.
Enhancing UI/UX, thought management and KYC capacity are the way to go for lenders, he said, adding that lenders must ensure compliance with regulatory norms at all times. Developing IT capability and clients’ data safety is of the paramount interest, he said. His comments come a day after the Reserve Bank of India (RBI) barred Kotak Mahindra Bank from issuing new credit cards and onboarding customers via online website and mobile application due to severe violation of regulatory norms.