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Last Updated : Jul 12, 2019 03:10 PM IST | Source: Moneycontrol.com

IndusInd Bank Q1 profit jumps 38% post Bharat Financial merger, asset quality stumbles

Net profit of the merged entity stood at Rs 1,432.5 crore for the quarter ended June 2019, rising 38.3 percent compared to Rs 1,036 crore in the corresponding period last year.

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Private sector lender IndusInd Bank reported healthy growth in June quarter earnings following merger with Bharat Financial Inclusion. Hence, year-on-year comparison will provide a skewed picture.

Net profit of the merged entity stood at Rs 1,432.5 crore for the quarter ended June 2019, rising 38.3 percent compared to Rs 1,036 crore in the corresponding period last year.

Net interest income, the difference between interest earned and interest expended, grew by 34 percent to Rs 2,844 crore YoY, with loan growth at 28 percent.

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Net interest margin also improved to 4.05 percent in Q1FY20, from 3.59 percent in March quarter and 3.92 percent in Q1FY19.

The bank said total deposit as on June 2019 was at Rs 2,00,586 crore, higher by 26 percent compared to Rs 1,58,862 crore in June quarter 2018.

Asset quality weakened slightly on a sequential basis. Gross non-performing assets as a percentage of gross advances came in higher at 2.15 percent against 2.1 percent in the previous quarter.

Net NPA, too, increased to 1.23 percent in Q1FY20 against 1.2 percent reported in the fourth quarter of FY19.

While addressing a press conference, MD & CEO, Romesh Sobti said stressed assets at the end of June quarter stood at 1.67 percent against 1.9 percent in the previous quarter. "We see recoveries from special purpose vehicles of IL&FS and should see the outcome of IL&FS recovery efforts in a few months."

He added that the bank has been seeing a sharp decline in the cost of deposits. "Net interest margin should benefit by 10-15 bps over next 2-3 quarters with falling deposit costs.

IndusInd Bank reported provisions for bad loans for the quarter at Rs 430.6 crore, rising 23 percent YoY but declining 72 percent compared to the previous quarter.

Operating profit showed a 35.6 percent year-on-year growth at Rs 2,591 crore in June quarter. Other income (non-interest income) grew by 28 percent year-on-year to Rs 1,663 crore in Q1.

The stock was quoting at Rs 1,510, down 2 percent on the BSE at 1500 hours.
First Published on Jul 12, 2019 02:46 pm
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