IndusInd Bank Q1 net profit jumps 60.5% YoY to Rs 1,631.1 crore, beats estimate

IndusInd Bank on July 20 reported a 60.5 percent year-on-year rise in net profit at Rs 1,631.1 crore for the quarter ended June, which was above analysts' expectations of Rs 1,423.5 crore.

The net profit rise was helped by a 30 percent year-on-year fall in provisions as well as a 16 percent growth in net interest income. The bank provided Rs 1,250.99 crore towards bad loans during the quarter, far lower than the Rs 1,779.33 crore made in the corresponding quarter a year ago.

The provisioning need came down owing to an improvement in asset quality metrics. IndusInd Bank's gross non-performing assets fell by 4 percent from a year ago to Rs 5,932.90 crore. As a percentage of the lender's total loan book, gross NPAs were 2.35 percent of its loan book for the June quarter, down from 2.88 percent a year ago. On a net basis, NPAs were down to 0.67 percent of the loan book from 0.84 percent a year ago.

That said, the ratios have increased slightly on a sequential basis for the bank. Further, the bank’s fresh slippages have also increased on a sequential basis. Fresh slippages totalled Rs 2,250 crore for the quarter, partly because restructured loans slipped. The restructured pile reduced marginally to 2.1 percent from 2.6 percent in the previous quarter. “You will see the stabilisation of the restructured book,” said Sumant Kathpalia, chief executive officer of the bank said in a media call. What’s more is that the bank’s write-offs remained elevated and upgrades and recoveries dropped sharply. The bank said that it has not sold any bad loans to asset reconstruction companies during the quarter.