IndusInd Bank Q4 net profit jumps 51% on lower provisioning

MUMBAI:

IndusInd Bank

on Friday reported a 51 per cent jump in consolidated net profit to Rs 1,401 crore in the March 2022 quarter, mainly due to lower provisioning.


The private sector lender's post-tax profit was Rs 4,805 crore for fiscal 2021-22, up from the Rs 2,930 crore.

The core net interest income rose 13 per cent to Rs 3,985 crore on a slight expansion in the net interest margin (NIM) to 4.20 per cent and a 12 per cent jump in advances. The other income grew 7 per cent to Rs 1,905 crore.

The high-profit growth was courtesy of a 22 per cent dip in provisions and contingencies at Rs 1,464 crore for the reporting quarter.

It can be noted that a majority of its peers have also reported handsome profit growth following a dip in money set aside as provisions for bad debts, as the quantum of bad debts go down.

IndusInd's gross non-performing assets ratio declined to 2.27 per cent as of March 31, 2022, against 2.67 per cent at the March-end 2021.

The bank's chief executive and managing director Sumant Kathpalia said it will be entering the mortgage finance lending by July, aiming to more than double the affordable housing finance book to Rs 5,000 crore, and increase focus on the margin accretive merchant acquisition finance and tractor finance segments.

It is witnessing a slowdown in demand from the diamond finance business because of the geopolitical tensions, as Russia is the source for rough diamonds, Kathpalia said, adding that the bank does not see the events impact its loan book from a credit quality perspective.

Kathpalia said that in FY23, the bank will have to grow its loan book at a rate which is faster than the 12 per cent achieved in FY22 to keep up with its broader business growth targets but did not share a number.

It will maintain the NIM in between the 4.15-4.25 per cent range, he added.

The bank, which has completed two of the three years in a business plan, is focusing on increasing its disbursements in the new fiscal to achieve the 16-18 per cent growth target and will also concentrate more on domain expertise businesses like diamond finance, microloans and vehicle finance, Kathpalia said.

He said all the worries with microfinance are behind the bank now and it will be looking at growing the book.

The RBI's new norms for credit cards will hurt the bank in the long-term from a yield on the book perspective and also push up the cost of acquisition.

Kathpalia said there has not been any impact on its mainstay of vehicle finance, but added that two-wheelers is a worry from an asset quality perspective.

Its overall capital adequacy stood at a comfortable 18.06 per cent as of March 31.

The bank scrip closed 0.94 per cent down on the BSE on Friday at Rs 978.210 apiece, against a correction of 0.80 per cent on the benchmark.