IndusInd Bank sheds 3% as MD admits to procedural lapses in MFI lending - Economic Times

NEW DELHI – Shares of IndusInd Bank lost 3 per cent in early trade despite the private lender reporting a 49 per cent jump in December quarter net profit to Rs 1,241.55 crore as the bank admitted to procedural lapses in microlending earlier in the year.

The scrip fell to Rs 876.55 against Rs 903.55 at the previous close on the National Stock Exchange.

Earlier in the quarter, the bank faced allegations of loan ever-greening in the microfinance business it carries out through Bharat Financial Inclusion, a wholly-owned subsidiary.

An internal committee has already submitted its report on the same. An external consultant will likely submit the final report in two weeks.

The internal report is as per management guidance, but there may be procedural lapses for any particular transaction related to MFIs, Sumant Kathpalia, Managing Director and Chief Executive Officer, IndusInd Bank was quoted by ET as saying.

While the bank increased loans to small and mid-sized corporates, it slowed disbursements to the microfinance sector.

The bank expanded loans 10 per cent to Rs 2.29 lakh crore in the quarter under review as it extended credit to companies and individuals in tandem with the reopening of the economy.

Other income was at Rs 1,877 crore, an increase of 14% year-on-year. Core Fee income grew by 9% to Rs 1,519 crores.

Deposits increased 19 per cent y-o-y to Rs 2.84 lakh crore during the three months. The share of low-cost current and savings account deposits formed 42 per cent of total deposits.

Asset quality showed signs of improvements, with the bad loan ratios contracting by 9-29 basis points from the preceding quarter.

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IndusInd Bank sheds 3% as MD admits to procedural lapses in MFI lending - Economic Times
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