MUMBAI: The fifth largest private sector lender IndusInd Bank on Thursday reported a 15 percent on-year growth in net profit at Rs 2,349 crore in the March quarter helped by stable margins and other income coupled with more loan sales and better asset quality.
The Hinduja group-promoted bank said the key profitability metric net interest income also grew by 15 percent on-year to Rs 5,376 crore but was almost muted sequentially inching up just about 2 percent. Net interest margin came in at 4.26 percent against 4.28 percent on-year and from 4.29 percent in Q3of FY24, the bank management told reporters.
For the full fiscal, the bank earned Rs 8,977 crore in net income on a consolidated level, up by 21 percent over the previous year when it was Rs 7,443 crore. Helping the bottom line was better yield on assets which improved to 9.85 percent from 9.20 percent while the cost of funds rose to 5.59 percent as against 4.92 percent.
Other income came in at Rs 2,508 crore for the quarter as against Rs 2,154 crore for the corresponding quarter of the previous year, clipping at 16 percent. Core fee grew by 10 percent to Rs 2,293 crore as against Rs 2,087 crore a year ago.
Operating expenses rose 24 percent to Rs 3,803 crore from Rs 3,066 crore a year ago. The managing director & chief executive Sumant Kathpalia explained that they are still in the growth phase and a growing concern has to invest in people (net hired 11,000 last fiscal) and branch expansion which has almost reached the 3000 mark (2987, to be precise) and technology, which on average comes in at 8-10 percent of the cost to income per annum. He also said the bank will add 500 more branches by the end of the next fiscal.
For the full fiscal, loan growth stood at 18 percent and deposit growth at 14 percent. Kathpalia said he is confident of maintaining 18-20 percent loan growth in the current fiscal and deposits accretion of 13-15 percent but admitted that liquidity will be a problem given the inflation pressure.
On the asset quality, Kathpalia said net NPA and gross NPAs were almost flat with the former coming in at 0.57 percent, down 2 bps, and the latter at 1.92 percent, down 6 bps.
The balance sheet has crossed the Rs 5 trillion mark at Rs 5,15,094 crore from Rs 4,57,837 crore in March 2023, marking growth of 13 percent. Of this, deposits rose 14 percent to Rs 3,84,586 crore and advances rose 18 percent to Rs 3,43,298 crore.
The provision coverage ratio was consistent at 71 percent with provisions and contingencies for the quarter at Rs 3,885 crore compared to Rs 4,487 crore, down 13 percent. Total loan related provisions were at Rs 7,210 crore or 2.1 percent of the loan book of the bank which the other week completed 30 years of operations.
