Mumbai: Private sector lender IndusInd Bank on Wednesday reported a 22% year-on-year (y-o-y) rise in its September quarter standalone net profit to ₹2,181.5 crore on the back of higher income and lower provisions.
A Bloomberg poll of analysts had estimated a net profit of ₹2,212 crore for Q2 FY24.
The bank's total provisions stood at ₹974 crore in the three months through September, down 15% the year-ago period. Net interest income (NII) – difference between interest earned and expended – of ₹5,077 crore in Q2 FY24 climbed 18% y-o-y. Its net interest margin (NIM), a key measure of profitability, remained unchanged from the previous quarter at 4.29%.
“The net interest margin has been a keenly discussed topic over the last few quarters. We have consistently communicated that our balance sheet construct, and the growth dynamics are able to withstand NIM volatility," said Sumant Kathpalia, chief executive officer, IndusInd Bank.
“While our cost of deposits increased by 23 bps (sequentially), the lower borrowing cost and effective asset side management led to steady NIMs during the quarter. We have always said that our NIMs will be range bound between 4.2-4.3% and that is the target which we set for ourselves."
The bank reported a 21% y-o-y growth in overall advances at ₹3.2 trillion as on 30 September. Its deposit base saw a 14% y-o-y growth to ₹3.6 trillion in the same period.
“We maintained our growth trajectory on the retail deposit mobilisation in spite of the competitive intensity," said Kathpalia.
The bank, he said, also saw strong momentum in retail loan segments. “Retail growth was driven by healthy disbursements in our vehicle and microfinance businesses and maintaining traction in our consumer products. Our corporate book grew by 18% driven by small corporates," said Kathpalia.
The bank witnessed a slight improvement in asset quality as compared to the June quarter. Its gross bad loans stood at 1.93% of its total advances, down 1 basis point sequentially. Its net NPA ratio was at 0.57%, down 1 basis point from the June quarter. At the product level, those like the microfinance portfolio saw an increase in bad loan ratios.
“We do not believe that the MFI (microfinance institution) book should be sold to asset reconstruction companies. I continue to believe there is a dedicated focus on recovery and upgrades which has happened," he said.
The bank’s capital adequacy ratio stood at 18.21%, down 19 basis points (bps) from the June quarter but up 20 bps from the same period last year. Kathpalia said he does not see the need to raise capital, unless and until the bank’s growth goes beyond 25%.
“We do not see the need to raise capital because our internal accruals are enough to take care of the growth right now."
Shares of IndusInd Bank closed at ₹1,420.8 apiece on Wednesday on the BSE, down 0.97% from previous close.
"Exciting news! Mint is now on WhatsApp Channels đ Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
Related Premium Stories
Updated: 18 Oct 2023, 06:32 PM IST
IndusInd Bank posts 22% rise in Q2 profit on higher income, lower provisions | Mint - Mint
Read More
No comments:
Post a Comment