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Private sector lender IndusInd Bank ’s net profit jumped by more than 50 per cent in the second quarter of the fiscal with steady growth in interest income. However, the bank’s asset quality weakened.
IndusInd Bank posted a net profit of ₹1,383.37 crore for the July to September quarter this fiscal, which was a 50.3 per cent increase from ₹920.25 crore in the same period a year ago. The bank’s total income grew by 31.4 per cent to ₹8,877.02 crore in the quarter ended September 30 against ₹6,755.37 crore a year ago.
The net interest income grew by 32 per cent to ₹2,909 crore during the second quarter this fiscal against ₹2,203 crore in the corresponding quarter of the previous year. Net interest margin also improved to 4.1 per cent in the second quarter against 3.84 per cent a year ago. Other income grew by 31 per cent to ₹1,727 crore in the quarter under review from ₹1,317 crore a year ago.
Also read:Why has IndusInd Bank fallen despite stable Q2 earnings?
“During the second quarter, the bank witnessed healthy growth in its topline as well as in operating profits. The benefits of the merger with Bharat Financial Inclusion are perceptibly visible and accretive to earnings,” said Romesh Sobti, Managing Director and CEO, IndusInd Bank, adding that deposit growth has been very strong in the last few quarters and has continued to remain robust in this quarter as well.
The lender’s tax expense was lower at ₹478.86 crore in the second quarter of the fiscal, which also helped improve profits. The bank’s provisions rose by nearly 25 per cent to ₹737.71 crore for the quarter under review from ₹590.27 crore a year ago.
Sobti said the bank has worked towards strengthening the balance sheet by taking up the provision coverage ratio (PCR) to 50 per cent during the quarter from 43 per cent previously.
Gross non-performing assets surged to ₹4,370.20 crore in the second quarter this fiscal from ₹1,781.36 crore. It stood at 2.19 per cent of gross advances as on September 30, 2019, from 1.09 per cent by the same period a year ago.
Net NPAs also jumped to ₹2,202.57 crore in the quarter under review, or 1.12 per cent of net advances, as on September 30 from 0.48 crore a year ago. IndusInd Bank’s scrip closed at a loss of 6.15 per cent to ₹1,228.95 apiece on the BSE.
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