IndusInd net soars 190% on healthy interest income, lower provisioning

The capital adequacy ratio (CAR) stood at 17.38% with CET1 ratio of 16.83% at the end of March 2021.

Private lender IndusInd Bank on Friday reported a 190% year-on-year (y-o-y) jump in its net profit to Rs 876 crore for the quarter ended March 2021 because of healthy interest income and reduced provisioning. Provisions declined 24% y-o-y to Rs 1,866 crore.

The lender’s operating profit increased 8% y-o-y to Rs 3,062 crore as the net interest income (NII) grew 9.4% y-o-y to Rs 3,535 crore.

Sumant Kathpalia, MD and CEO, IndusInd Bank, said: “There is a little bit of slowdown right now because of Covid-19. We will re-asses the situation in May.” The bank will continue to focus on collections, Kathpalia said. The collection efficiency during the March quarter remained at 98%.

The net interest margins (NIM) of the lender declined 12 basis point (bps) y-o-y to 4.13%, but showed a growth of 1 bps on a sequential basis.

The asset quality deteriorated a bit during the March quarter, after the standstill on declaring non-performing assets was lifted by the apex court. Gross non-performing assets (NPAs) ratio increased 93 bps to 2.67%, compared to 1.74% in the previous quarter. Similarly, net NPAs ratio increased 47 bps to 0.69% from 0.22% in the December quarter. The provisioning coverage ratio (PCR) remained at 75% in the fourth quarter.

The lender claimed that fee income was back to pre-covid levels. The core fee increased 8% y-o-y and 8% q-o-q to Rs 1,508 crore. Operating expenses for the quarter ended March 31, 2021 grew marginally to Rs 2,186 crore, as against Rs 2,148 crore for the corresponding quarter of the previous year. Tax expenses for the period increased 240% to Rs 319.89 crore.

Advances grew 3% y-o-y to Rs 2.12 lakh crore. Deposits grew 27% y-o-y to Rs 2.55 lakh crore. Current account savings account (CASA) deposits stood at Rs 1,06,791 crore with current account deposits at Rs 35,726 crore and saving account deposits at Rs 71,065 crore. CASA deposits comprised 42% of total deposits as of March 31, 2021.

The capital adequacy ratio (CAR) stood at 17.38% with CET1 ratio of 16.83% at the end of March 2021.