IndusInd Bank net jumps 52 per cent as net interest income soars 32 per cent

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Mumbai | Published: October 11, 2019 12:54:45 AM

Following the release of the second quarter numbers, the scrip falls 6.15%.

CEO and managing director Romesh Sobti CEO and managing director Romesh Sobti

Private sector lender IndusInd Bank on Thursday reported a 52% year-on-year increase in its net profit to Rs 1,401 crore for the quarter ended September, led by a 32% rise in its net interest income.

The bank’s net profit at Rs 1,401 crore was, however, marginally lower than the Rs 1,416-crore consensus estimate of analysts tracked by Bloomberg. The earnings are not comparable to those in the previous year as they include results of Bharat Financial.

Following the release of the Q2FY20 results, the IndusInd Bank stock price fell by 6.15%, closing at Rs 1,228.95.

For the September quarter, the bank’s net interest income (NII) — the difference between interest earned and interest expended — saw an increase of 32% year-on-year to Rs 2,909 crore. The loan growth came in at a reasonably good 21% y-o-y. The net interest margin (NIM) stood at 4.1% — higher by 5 basis points compared to the June quarter.

The deposit growth clocked a healthy 23% y-o-y rise during the quarter although the CASA (current accounts savings accounts) ratio declined marginally to 41.43% from 43.62% in the comparable quarter last year.

The provision coverage ratio of the bank increased to 50% from 43% in the June quarter. CEO and managing director Romesh Sobti said accelerated provisions were made to strengthen the balance sheet for future requirements. “The benefits of the tax cuts have been moved to boost up not the profits but the provision coverage ratio,” he said, adding that the provisions would be improved to 60% in coming quarters.

Meanwhile, gross non-performing assets (NPA) of the bank expanded by 4 basis points to 2.19%, while net NPA fell by 11 basis points sequentially to 1.12%. The bank’s capital adequacy ratio (CAR) stood at 15.77%, which increased compared to the Q1CAR of 14.28%.

The bank has expanded its network to 1,753 branches and 2,662 ATMs in the quarter, compared with 1,466 branches and 2,372 ATMs in the previous quarter.

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