IndusInd Bank Q1 Results: Net Profit Nearly Doubles On Lower Provisions

IndusInd Bank Ltd.’s quarterly profit almost doubled over a year earlier as provisions fell and other income rose.

The private lender’s net profit jumped 99.2% year-on-year to Rs 1,016 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 802-crore consensus estimate of analysts tracked by Bloomberg. Sequentially, too, profit rose 9.7%.

Net interest income, or core income, increased 7.7% over the year earlier to Rs 3,564 crore, against the estimated Rs 3,569 crore. The bank’s other income rose 17.6% to Rs 1,788 crore.

IndusInd Bank’s asset quality, however, worsened, with gross non-performing asset ratio at 2.88% as on June 30 compared with 2.67% at the end of March 2021. Net NPA ratio rose 15 basis points sequentially to 0.84%.

In the quarter ended June 30, the bank added Rs 2,762 crore worth bad loans, owing to collection issues during the quarter. Of this, Rs 2,342 crore came from the consumer finance book.

  • Write-offs during the quarter were Rs 938 crore.

  • Bad loans amounting to Rs 845 crore were upgraded and Rs 589 crore was recovered.

  • The bank sold a Rs 830-crore bad loan for Rs 400 crore to an asset reconstruction company during the quarter.

According to Sumant Kathpalia, the lender’s managing director and chief executive officer, collection efficiency fell in April and May, but quickly picked up in June to 96%.

“The first few weeks of July are giving us confidence that collection efficiency is returning as clients are paying back in time,” Kathpalia said.

Total provisions fell 18% over the year earlier to Rs 1,844 crore.

Shares of IndusInd Bank closed 1% lower before the results were announced compared with a 0.5% drop in the benchmark Nifty 50.

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