IndusInd Bank Q1 results: Net profit rises 32.5% to Rs 2,124 crore

IndusInd Bank on Tuesday reported a 32.5 per cent year-on-year (YoY) growth in net profit at Rs 2,124 crore for the quarter ended June 30, mainly on the back of a fall in provisions.

Provisions for the quarter ending June 30 stood at Rs 992 crore, compared to Rs 1,251 crore during the same period last year.

“Our provisions for the quarter fell below Rs 1,000 crore, for the first time in three years,” Sumant Kathpalia, managing director (MD) and chief executive officer (CEO) at IndusInd Bank said.

Net interest income (NII) grew by 18 per cent YoY to Rs 4,867 crore. Net interest margin (NIM) for Q1 was 4.29 per cent against 4.21 per cent for Q1 of FY23. It was 4.28 per cent for Q4 of FY23.

Other income was Rs 2,210 crore, up 14 per cent YoY. Yield on assets was 9.60 per cent for Q1 against 8.35 per cent for the corresponding quarter of the previous year. Cost of fund was at 5.31 per cent against 4.14 per cent.

At the end of June 30, gross non-performing asset (gross NPA) ratio, as a percentage of gross advances, was 1.94 per cent. It improved marginally from 1.98 per cent in the previous quarter and 2.35 per cent a year ago.

Net NPA ratio was 0.58 per cent compared to 0.59 per cent in the previous quarter and 0.67 per cent a year ago. The provision coverage ratio was 71 per cent at the end of June 30.

“Asset quality trends remained stable. NIM was stable quarter-on-quarter (Q-o-Q) and it has levers for improvement coming through an asset mix, thereby improving return ratio,” Rahul Malani, deputy vice-president (VP) – research, Sharekhan by BNP Paribas said in a note.

As of June 30, total deposits of the bank were Rs 3.47 trillion, up 15 per cent YoY.

The current account savings account (CASA) deposits increased to Rs 1.38 trillion. They accounted for 40 per cent of the total deposits for the quarter.

“Our retail NCR (net customer recurring) is expected to be around 45-50 per cent and the CASA ratio should be around 43-45 per cent by the year-end,” Kathpalia said.

He also said that the lender would consider raising capital when the CET-1 (Common Equity Tier 1) ratio falls below 14 per cent.

At the end of June 30, the CET-1 ratio stood at 16.44 per cent with overall capital adequacy ratio at 18.4 per cent. Total advances stood at Rs 3.01 trillion, growing 22 per cent YoY.