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IndusInd Bank Q4: Profit falls 77% to Rs 302 cr QoQ as provisions spike 134%

Net interest income for the quarter ended March 2020 grew by 5.1 percent sequentially to Rs 3,231.2 crore, which was better than the CNBC-TV18 poll estimates of Rs 2,917 crore.

April 27, 2020 / 06:20 PM IST
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Private sector lender IndusInd Bank on April 27 reported a March quarter profit at Rs 301.84 crore, which was much lower than the average of estimates of analysts polled by CNBC-TV18 pegged at Rs 537.3 crore.

The profit declined 76.8 percent compared to the previous quarter's net at Rs 1,300.2 crore, impacted by higher provisions and lower other income, but lower tax (down 77 percent QoQ) limited the decline.

Numbers are non-comparable year-on-year as Bharat Financial Inclusion was merged in July last year.

Net interest income for the quarter grew by 5.1 percent sequentially to Rs 3,231.2 crore, which was better than the CNBC-TV18 poll estimates of Rs 2,917 crore.

Net interest margin for Q4FY20 improved to 4.25 percent, from 4.15 percent in the previous quarter and 3.59 percent in the corresponding period last year.


Provisions and contingencies shot up 133.9 percent quarter-on-quarter to Rs 2,440.32 crore on account of COVID-19-led uncertainty but provision coverage ratio improved to 63.34 percent from 52.53 percent QoQ, IndusInd Bank said in its BSE filing.

"There is a high level of uncertainty about the duration of the lockdown due to COVID-19 pandemic and the time required for things to get normal. In this backdrop, during the quarter and year ended March 31, 2020, the bank has made a counter cyclical buffer/ floating provision of Rs 260 crore," it said.

In line with the RBI suggestion, the bank offered a moratorium on loan repayments and interest payable to eligible borrowers.

"In respect of such borrowers to whom the benefit of asset classification was extended consequent to the moratorium, the bank made a general provision of Rs 23 crore during the quarter and year ended March 31, 2020," IndusInd said.

On the asset quality front, gross non-performing assets (NAPs) as a percentage of gross advances rose 27 bps QoQ to 2.45 percent in January-March quarter, but net NPAs declined 14 bps sequentially to 0.91 percent in Q4FY20.

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Other income (non-interest income) during the quarter dropped 1 percent sequentially to Rs 1,772 crore, but pre-provision operating profit registered a 3.3 percent QoQ growth at Rs 2,836.17 crore in Q4FY20.

For the financial year ended March 2020, IndusInd Bank reported a 33.8 percent growth in profit compared to the previous year but the growth was constrained by higher provisions (up 50 percent), while net interest income grew by 36.3 percent to Rs 12,058.74 crore during the year.

Earlier this month, Moody's Investors Service placed domestic and foreign currency issuer ratings of Baa3/P-3 under review for downgrade.

The bank's ba1 baseline credit assessment (BCA) and adjusted BCA have also been placed under review for downgrade by the global rating agency.

The stock price crashed 80.3 percent during the financial year 2019-20 and 77 percent during the January-March quarter due to the COVID-19-led correction, deposits outflow and exposure to telecom sector.

The year-to-date fall was 73.5  percent.
Moneycontrol News
first published: Apr 27, 2020 04:42 pm
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