Private sector lender IndusInd Bank’s net profit for the quarter ending December 2022 jumped to Rs 1,959 crore, a 69% year-on-year rise that beat the Bloomberg estimate of Rs 1,885 crore.
The increase in the bottomline was on account of significant reduction in provisions, which slid 36% y-o-y to Rs 1,065 crore in Q3FY23. The bank also saw a rise in its advances and deposits.
The lender saw 15% increase in its pre-provisioning operating profit to Rs 3,680 crore, led by a rise in its non-interest income and net interest margin (NIM).
The bank’s non-interest income improved 11% y-o-y to Rs 2,076 crore in Q3FY23.
The bank’s NIM stood at 4.27% as of December 31, higher by 17 basis points (bps). The bank was able to maintain the margin in its guidance range of 4.15-4.25% as it was able to pass on the increase in cost of deposits to its borrowers, Sumant Kathpalia, MD & CEO, said.
Net interest income (NII) improved 18% y-o-y to Rs 4,495 crore on robust improvement in advances.
The lender saw 19% increase in its advances to Rs 2.7 trillion in Q3FY23. The bank’s deposits grew by 14% y-o-y to Rs 3.3 trillion with current account, savings account (CASA) ratio at 42%, unchanged from a year ago.
The bank’s gross non-performing asset (NPA) ratio stood at 2.06% as on December 31, lower by 42 bps y-o-y and 5 bps sequentially while net NPA was at 0.62% as compared to 0.61% a quarter ago and 0.71% a year ago.
The bank saw fresh additions to NPAs from microfinance loans and commercial vehicle finance loans, which are expected to normalise in a couple of quarters, Kathpalia said.
The bank’s capital adequacy ratio as per Basel III guidelines stood at 18.01% as on December 31, 2022 as compared to 18.06% a year ago.