IndusInd Bank: IndusInd’s second quarter net profit jumps 57%

Mumbai: Net profit of IndusInd Bank, promoted by Hinduja, increased by 57% on strong growth in interest and fee income, even as provisions fell, reflecting improved asset quality .

Net profit rose to ₹1,805 crore in the quarter ended September from ₹1,147 crore a year ago, driven by loan growth of 18%.

CEO Sumant Kathpalia said the bank disbursed a record ₹10,660 crore in car loans and ₹9,700 crore in micro-finance loans, helping to boost its assets, including a 24% growth of a year on year of corporate advances.

Net interest income (NII), or the difference between interest earned on loans and interest paid on deposits, soared 18% to ₹4,302 crore. Other income increased by 9% to ₹2,011 crore, driven by a 24% growth in commission income.

“We expect our loan growth to be between 18% and 20% this fiscal year,” Kathpalia said. “We will continue to focus on retailing our book even as our stress book continues to decline.”

IndusInd’s net non-performing assets (NPA) fell to 0.61% of loans from 0.80% a year earlier. As a result, the total slippages also decreased. Provisions fell to ₹1,141 crore from ₹1,707 crore in the previous year.

The net interest margin (NIM), or the difference between the return earned on loans and that paid for funds, improved to 4.24% in September 2022 from 4.07% a year ago, the bank having managed to increase its return on assets to 8.65% against 8.44% the previous year.

Kathpalia said the bank will continue to focus on deposit granularization even as it limits its borrowing costs to 120 to 150 basis points of total lending during the year. One basis point is 0.01 percentage point.


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