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Private sector lender IndusInd Bank on Wednesday reported a 60% year-on-year jump in its net profit for the second quarter of the current financial year to Rs 1,787 crore on account of lower provisions, which declined 33% year-on-year to Rs 1,141 crore as the asset quality improved.
The bank’s pre-provisioning operating profit (PPOP) improved 11% to Rs 3,520 crore, aided by a 9% increase in other income, which stood at Rs 2,011 crore.
The lender saw its net interest margin expand by 17 bps YoY to 4.24% during the reviewed quarter, helped by an improvement in yield on assets. Net interest income rose 18% to Rs 4,302 crore because of a strong growth in advances. The bank posted an 18% growth in advances to Rs 2.60 trillion, led by vehicle finance and microfinance segments in retail as well as corporate lending. The vehicle finance segment improved 26% while the micro loan business grew 11%. The corporate book grew 23% to Rs 1.2 trillion, as the bank continues to focus on granular and higher rated customers. The top three sectors the lender has exposure to are real estate, NBFC and gems and jewellery.
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Despite the overall slowdown in deposit growth in the banking sector, IndusInd Bank managed to post a healthy 15% rise in deposits. The bank raised granular, retail and low-cost deposit book and plans to focus on expanding branch network, acquiring new retail customers, raising deposits from high net worth and non-resident Indians, increasing rural customer base, building merchant acquiring business and digital partnerships.
“The bank continues to invest in its physical and digital distribution to maintain the growth trajectory as per our strategic ambitions,” Sumant Kathpalia, managing director & CEO, said.
Gross non-performing assets (NPA) fell 66 bps YoY and 24 bps sequentially to 2.11% as of September 30 while net NPAs declined 19 bps YoY and 6 bps sequentially to 0.61%. The provision coverage ratio remained consistent at 72%. Fresh slippages fell to Rs 1,572 crore in from Rs 2,250 crore in the June quarter. Of fresh additions, Rs 992 crore came from standard assets while Rs 580 crore was from restructured accounts.
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