IndusInd Bank Q4 Results: Net Profit Rises Three-Fold As Provisions Fall
IndusInd Bank Ltd.’s quarterly profit rose three-fold as it reported higher interest income and lower provisions.
The private lender’s net profit stood at Rs 876 crore in the quarter ended March compared with a net profit of Rs 301.8 crore a year ago, according to its exchange filing. Analysts polled by Bloomberg had pegged the bottom line at Rs 904 crore.
That came as its net interest income rose 9.4% year-on-year to Rs 3,535 crore, against the Rs 3,334-crore forecast. Total expenses fell 3% year-on-year to Rs 6,138 crore.
According to MD & CEO, Sumant Kathpalia, IndusInd Bank has come out stronger in FY21, despite the impact of the Covid-19 pandemic. “We will continue to reduce our corporate book to increase granularity. We are scaling up loans to the affluent, NRI customers and SMEs,” Kathpalia said in a media call after announcing the quarterly results.
Kathpalia has completed a year as the bank’s chief executive after taking over from Romesh Sobti.
- The bank’s gross non-performing assets ratio stood at 2.67% as compared with a pro forma gross NPA ratio of 2.93% as on Dec. 31, 2020.
- The net NPA ratio was at 0.69% compared to 0.70% last quarter.
- Total provisions fell 23.5% year-on-year to Rs 1,866 crore.
- Write-offs during the quarter were at Rs 1,350 crore
- Upgrades were at Rs 1,875 crore, while recoveries during the quarter stood at Rs 138 crore
The bank had restructured 2% of its outstanding book as of March 31 or Rs 3,700 crore in loans. Of this, 1.8% in restructured loans were due to the Covid-19 pandemic. The restructuring has moved away from corporate accounts and is now more prominent in secured lending segments such as vehicle finance, Kathpalia said. During the fourth quarter, Rs 2,400 crore of the restructured loans came from the bank’s vehicle finance book.
IndusInd Bank’s collection efficiency improved to 98% as of March 31 from 97% in the October-December quarter. The bank’s collections from the microfinance and vehicle finance portfolios improved. “We will continue to focus on collections amid the second Covid wave in FY22,” Kathpalia said.
Advances & Deposits
- Advances rose 3% year-on-year to Rs 2.13 lakh crore.
- Consumer loans stood at Rs 1.22 lakh crore, accounting for 57% of the loan book.
- Deposits rose 27% from a year ago to Rs 2.56 lakh crore.
- Current account and savings account deposits rose to Rs 1.07 lakh crore, up 31% year-on-year.
Kathpalia declined to give guidance for the current quarter on account of the uncertainty due to the second wave of Covid infections. However, the bank’s key focus areas of vehicle finance and microfinance are expected to see good growth, he said. The bank will continue to go slow on unsecured lending, a conscious call in light of the pandemic, Kathpalia added.