Private sector lender IndusInd Bank on Friday reported a 52.67% year-on-year (Y-o-Y) decline in its net profit to Rs 663 crore for the September quarter because of increased provisioning. Pre-provision operating profit (PPOP) grew 9% YoY to Rs 2,852 crore, compared with Rs 2,623 crore in the year-ago period. Provisions increased 166% YoY to Rs 1,964 crore, compared to Rs 737 crore during the same quarter last year. The bank, however, registered a 12.67% Y-o-Y increase in net interest income (NII) to Rs 3,278 crore. Sequentially, the NII remained flat, compared to Rs 3,309 crore at the end of June 2020.
Sumant Kathpalia, chief executive officer, said the bank will continue to provide if there is stress due to Covid-19. “If we see stress coming due to Covid-19, we will continue to make provisions. Third quarter numbers will also have a restructuring provisioning,” he said. The bank also said it is expecting very less demand of restructuring from borrowers.
The provision coverage ratio (PCR) improved to 77% in the September quarter, compared to 67% at the end of June 2020. PCR stood at 50% at the end of September 2019. The asset quality of the bank showed an improvement in the September quarter. The gross non-performing assets (NPA) ratio improved 36 basis points (bps) to 2.21%, compared to 2.53% in the previous quarter. Similarly, the net NPA ratio came down 34 bps to 0.52% from 0.86% in the June quarter.
Advances grew 2% YoY to Rs 2.01 lakh crore during the quarter under review, compared with Rs 1.97 lakh crore a year ago. Advances stood at Rs 1.98 lakh crore as on June 30, 2020. The bank remains cautiously optimistic on loan growth, Kathpalia said.
Deposits grew 10% YoY to Rs 2.27 lakh crore in the September quarter, compared to Rs 2.07 lakh crore in the corresponding quarter last year. The current account savings account (CASA) ratio declined 120 bps YoY to 40.3%, from 41.5% in the comparable quarter last year. The bank’s CASA ratio remained at 40.1% at the end of June quarter.
The net interest margin (NIM) increased 6 bps to 4.16%, compared to 4.1% in the September quarter last year. Net interest margins, however, declined 12 bps on a quarter-on-quarter basis, compared to 4.28% in the June quarter.
The capital adequacy ratio as on September 30, 2020 was 16.55%, compared to 14.27% in the same period last year.
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