Mumbai :IndusInd Bank on Wednesday reported a 58 per cent jump in its December quarter net profit at Rs 1,964 crore, driven by improvements in asset quality and core income.
The private sector lender's net interest income grew 18 per cent to Rs 4,495 crore, driven by a 19 per cent loan growth and a 0.17 per cent widening in the net interest margin to 4.27 per cent. The other income grew to Rs 2,076 crore during the October-December period from Rs 1,877 crore in the year-ago period. This included an 11 per cent growth in the total fee income to Rs 2,077 crore, the bank said.
The bank was able to post a 14 per cent increase in the overall deposits driven by the retail deposits amid a wide divergence in the credit-deposit growth numbers in the system which has triggered what some bankers call a war for deposits. Its overall provisions came down to Rs 1,065 crore from Rs 1,654 crore in the year-ago period, helping the bottom line.
On the asset quality front, IndusInd Bank's gross non-performing assets ratio improved to 2.06 per cent from 2.11 per cent three months ago and 2.48 per cent in the year-ago period. The fresh additions to slippages stood at Rs 1,467 crore as against Rs 1,572 crore in the preceding September quarter, with the consumer segment showing a bulk of the stress at Rs 1,348 crore for the reporting quarter.
Indusind Bank's Managing Director and Chief Executive Officer Sumant Kathpalia told reporters that the stress is coming primarily from collection issues on the micro loans faced on the eastern coast, and also on the medium and heavy vehicle side. He, however, said the issue on the vehicle loans front will get normalised in a quarter and the same in the microfinance will take up to two quarters. In the medium to long term perspective, the bank is targeting a further decrease in the GNPAs (Gross Non Performing Assets) ratio to 1.80-2 per cent, he added.
The bank is also targeting to maintain the NIMs (Net Interest Margins) between 4.15-4.25 per cent, Kathpalia said, adding that a lot of the detail about long term targets will be clear in a strategy document it will be preparing soon. The new framework will be centred around the retailisation of deposits, upping the digital offerings, accelerating retail loans and increasing employees and distribution presence, he said.
For the quarter under review, the bank added 1,800 people and 8,500 people were added in the first nine months of the fiscal to take its staff strength to 37,870, Kathpalia said. The overall capital adequacy stood at 18.01 per cent as on December 31, 2022, and Kathpalia said the bank does not see any need to raise fresh capital even if the Reserve Bank of India were to implement the expected credit loss-based provisioning framework.
On the loan growth side, he said a bulk of the capital expenditure demand is coming from government-led entities, and corporates are sitting on the fence at present. The bank is more keen to grow its small and mid-corporate offerings. The bank plans to up its focus on the newly introduced mortgage lending side and has disbursed Rs 200 crore in loans as part of the pilot that it has undertaken. Shares of the bank closed 0.67 per cent lower at Rs 1,222 apiece on the BSE. (PTI)
