Dolat Capital: IndusInd Bank’s Profitability Concerns Remain In Q1
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Dolat Capital Report
IndusInd Bank Ltd. reported a healthy net interest income growth at 16% YoY. However, pre-provision operating profit growth at 10% YoY was supported by high treasury gains, excluding which core PPoP de-grew by 10% YoY.
Total Covid-19 related provisions stood at 60 basis points of advances or Rs 12 billion.
Moratorium by value was at 16% (14% excluding micro finance institutions) for the bank, of which 90% is secured. Moratorium levels were at 50% in May-end.
Management’s conservative stance on growth and provisioning along with additional disclosures on ‘banks board bureau and below’ (at over 30%) book provide some comfort.
However, building a more sustainable franchise will have its medium term challenges.
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