IndusInd Bank Q4 Net Profit Rises 46% On Lower Provisions, Strong Core Income

Private sector lender Indusind Bank on Monday reported a 46 per cent jump in its March quarter net profit at Rs 2,043 crore on a dip in provisions and stronger core income.

The Hindujas-promoted bank's core net interest income rose 17 per cent to Rs 4,669 crore on a 21 per cent loan growth and a 0.08 per cent expansion in the net interest margin to 4.28 per cent.

Its other income came at Rs 2,154 crore, up by 13 per cent when compared to the year-ago period.

A 30 per cent dip in provisions and contingencies at Rs 1,030 crore during the quarter led to the handsome profit growth during the quarter.

On the asset quality front, the gross non-performing assets ratio improved to 1.98 per cent as against 2.27 per cent in the year-ago period.

Its managing director and chief executive Sumant Kathpalia told reporters that the bank aspires to contain the credit costs between 1.10-1.30 per cent going forward.

The NIMs will be between 4.15-4.25 per cent, he said. The bank will continue to keep the unsecured book under 5 per cent of the overall book and will be cautious in the segment, Kathpalia said.

At present, corporate banking advances from 46 per cent of the book, while the consumer bank which includes the legacy vehicle finance portfolio, contributes the remaining 54 per cent.

The bank's promoters have initiated the process of upping the stake in the bank to 26 per cent from the present 15 per cent two weeks ago and a due diligence process will take up to 120 days after which the process will move ahead.

When asked about the RBI reducing his reappointment term for two years as against the board recommended three years, Kathpalia said there are no integrity or governance-related issues at the lender which will hamper its growth in the future.

If there were "severe" issues, the RBI would not have given the go-ahead at all for two years, he said, adding that the regulator would have curtailed the term much more or not given an extension at all otherwise.

The bank announced a new phase of a strategic growth programme under which it aims to improve on its governance, growth and granularity, Kathpalia said.

The bank will continue with its branch opening strategy moving ahead as well, and plans to launch a new digital bank offering in the next two months.

Through the new offering christened as 'Indie', it is targeting to generate a balance sheet of Rs 50,000 crore and 8 million customers in the next three years, he said.

Kathpalia said it is also aiming to strengthen its recently launched mortgage lending vertical, he said.

Its board on Monday recommended a dividend of 14 per equity share.

The bank scrip closed 1.24 per cent down at Rs 1,102.05 a piece on the BSE on Monday, as against gains of 0.67 per cent on the benchmark.