IndusInd Bank Q3 net profit rises 17% on core income growth

Mumbai: IndusInd Bank on Thursday reported a 17 per cent growth in its December quarter net profit to Rs 2,301 crore, helped by the higher core income.

The city-based private sector lender had posted a net profit of Rs 1,964 crore for the October-December period last year.

Its core net interest income grew 18 per cent to Rs 5,296 crore on the back of a 20 per cent growth in advances and the net interest margin being stable at 4.29 per cent.

The other income increased 15 per cent to Rs 2,396 crore for the reporting quarter.

At a time when rivals are reporting some stress on the NIMs front, IndusInd has been able to hold on to the NIMs, repricing of loans and the higher proportion of retail loans, its managing director and chief executive Sumant Kathpalia told reporters.

He said the cost of deposits for the bank rose 0.09 per cent during the quarter, while the yield on advances moved up by a higher 0.15 per cent, helping the NIMs. The bank will aim to maintain the number between 3.25-3.30 per cent, he added.

The overall deposit growth came at a slower 13 per cent as the bank shed some bulk deposits, Kathpalia said, adding that it will aim to keep the credit-deposit ratio, which came at 88 per cent for the quarter.

The bank is targeting for an advance growth of 18-22 per cent for FY24 and also in FY25, he added.

On the asset quality front, the gross non-performing assets ratio improved slightly to 1.92 per cent against 1.93 per cent in the quarter-ago period and 2.06 per cent in the year-ago period.

Kathpalia said that there is a scope for further improvement in the number.

The overall provisions came down to Rs 934 crore from Rs 1,064 crore in the year-ago period. The bank aspires to get down the credit cost to under 1.10 per cent in FY24 from 1.20 per cent in FY25, said Kathpalia.

He said the bank has an exposure of only Rs 113 crore to alternate investment funds and added that it is confident of selling off the exposure, due to which it has not set aside any money on the book.

The bank will not be keen to grow the unsecured book to over 5 per cent of the overall book, the chief executive said, adding that there are no concerns about the exposure right now.

He also noted that the investments in marketing, branches and technology have pushed up the cost-to-income ratio to over 47.4 per cent now, and the same will come down to 45-46 per cent in FY25 and will go down further to 41-43 per cent in the year after.

The bank is adequately capitalised at present and will evaluate a need for capital in July or August this year, he said, adding that it is not in the loop on the promoter Hindujas' conversations with the RBI to increase holding in the bank.

The overall capital adequacy stood at 17.86 per cent as of December 31, the chief executive said, adding that there was a 0.30 per cent impact of the changes in risk weights on non-bank lenders and unsecured loan exposures.

The bank scrip closed 1.82 per cent down at Rs 1,613.15 apiece on the BSE on Thursday against a 0.44 per cent correction on the benchmark.