Q1 Results: IndusInd Bank Profit Meets Estimates, Asset Quality Stable In June Quarter

IndusInd Bank Ltd.’s first quarter profit rose in line with analysts’ estimates and asset quality remained stable.

Net profit rose 23.8 percent year-on-year to Rs 1,035 crore in the April-June period, the private lender said in an exchange filing today. That’s marginally higher than the Rs 1,027 crore estimate of analysts tracked by BloombergQuint.

Net interest income, or the core income from operations, rose 20 percent to Rs 2,122 crore, marginally missing the Rs 2,140-crore estimate.

The private bank’s asset quality remained stable. Gross non-performing assets as a percentage of total loans improved to 1.15 percent compared to 1.17 percent reported at the end of the March quarter. Net bad loan ratio remained flat at 0.51 percent.

Other Highlights

• Provisions for bad loans rose 4 percent to Rs 350 crore from Rs 335 crore in the previous quarter.
• Net interest margin stood at 3.92 percent against 3.97 percent in the last quarter.
• Gross non-performing assets rose 2 percent in absolute terms to Rs 1,741 crore.
• Net NPA rose 2.2 percent to Rs 762 crore.
• Total advances grew 29 percent year-on-year to Rs 1.5 lakh crore.
• Total deposits grew 19 percent over the year-ago period to Rs 1.58 lakh crore.
• Capital adequacy ratio in the June quarter stood at 14.7 percent.
• Current account and saving account ratio improved to 43.42 percent compared with 37.78 percent a year ago.
• Other income rose 11.5 percent year-on-year in the reporting quarter.
• Mark-to-market loss of Rs 86 crore booked during the quarter; the lender has provided for it fully and did not utilise RBI window to amortise these losses.
• Slippages ratio improved to 1.31 percent from 2.68 percent a year ago.

Commercial Vehicle Loans Set To Grow

IndusInd Bank’s loan disbursement for commercial vehicles grew 52 percent in the June quarter. This is just the beginning, Managing Director Ramesh Sobti told reporters after the earnings announcement. “The vehicle finance industry is in a bull run for at least two years if not more.”

The commercial vehicles segment formed 16 percent of IndusInd Bank’s total loan book as of March 2018.

Shares of IndusInd Bank traded flat at Rs 1,961 apiece after the announcement. The stock has gained 7.5 percent between April and June compared to a 5.94-percent advance in the benchmark NSE Nifty 50 Index during the period.