MUMBAI: Private lender IndusInd Bank has red ink all over its December quarter balance-sheet with its net profit plunging a whopping 89% on-year to Rs 161 crore. In the corresponding quarter of the last fiscal, the bank had a net profit of Rs 1,402 crore.
Net interest income, the difference between interest earned on advances and interest paid on deposits, fell 13% on-year to Rs 4,562 crore, the bank management told reporters Friday in a conference call.
The bank's asset quality improved marginally with gross NPA and net NPA ratios coming down to 3.56 and 1.04 from 3.60 and 1.04 in the previous quarter.
Fee and other income declined to Rs 1,707 crore from Rs 2,355 crore, core fee came in at Rs 1,575 crore as against Rs 2,123 crore for the corresponding quarter of previous year and the yield on assets stands declined to 8.78% as against 9.63% while cost of fund stands declined to 5.26% from 5.70%.
Total expenditure came down to Rs 10,810 crore from Rs 11,555 crore and operating expenses were Rs 3,999 crore as against Rs 3,982 crore.
Casa deposits stood at Rs 1,19,104 crore with current account deposits at Rs 31,416 crore and savings account deposits at Rs 87,688 crore. Casa deposits comprised 30% of total deposits.
Rajiv Anand, chief executive of the bank, who took over last August, said, "During the reporting quarter, the bank focused on optimisation of its balance-sheet by letting go unprofitable loans and deposits along with being cautious on microfinance disbursements."
He said, “The operating performance was steady with pre-provision operating profit at Rs 2,270 crore, which grew 11% from Q2. Our asset quality trends have been stable in all core businesses except in microfinance wherein industry is now showing early signs of recovery.
Anand said, “Overall, the bank has returned to profitability with a net profit of Rs 128 crore and the balance sheet is robust with a healthy capital adequacy, excess liquidity and reducing stressed asset pool. We are optimistic about resilient domestic economy and aim to participate in the growth recovery in a calibrated manner," adding it has a healthy liquidity position with an liquidity coverage ratio of 122.
He said, "The provision coverage ratio improved to 71.5 and provisions and contingencies for the quarter were Rs 2,096 crore compared to Rs 1,744 crore. Total loan related provisions were at Rs 10,027 crore (3.16% of loan book)."
In the December quarter, its provisions and contingencies fell 20% from the previous quarter to Rs 2,089 crore. In the September quarter, the bank raised provisions for its microloan portfolio, resulting in a loss of Rs 445 crore.
The net interest margin was 3.52% as against 3.32% a quarter ago.
The bank's loan book shrank 13.1% to Rs 3,93,815 crore in Q3 from Rs 3,89,600 crore in Q2, while deposits declined 3.8% to Rs 3,93,815 crore from Rs 3,89,600 crore.
IndusInd took a Rs 2,300-crore hit to its accounts and posted its largest-ever loss in the March 2025 quarter following the accounting scam in its forex trading book. But the bank swung back to profitability in the June quarter.