The Romesh Sobti-led company saw its operating profit increase by 12.5 percent year-on-year to Rs 1,769.39 crore.
IndusInd Bank on Thursday reported a net profit of Rs 953.09 crore for the March quarter, around 27 percent higher than in the same quarter last year, as it made fewer provisions for bad loans.
The bank's net profit was largely in line with market expectations. A Reuters poll had pegged its net profit at Rs 961.5 crore for the quarter under review.
This was the 40th quarter for which the lender was reporting quarterly earnings. Its net profit for the fiscal year ended March stood at Rs 3,605.99 crore, nearly 26 percent higher than its profit figure last fiscal.
The bank’s net interest income, which is the difference between interest earned and interest expended, came in at Rs 2,007.59 crore, 20.4 percent higher than in the corresponding quarter a year ago.
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Net interest margin came in at 3.97 percent, 3 basis points lower than the 4 percent reported last year.
The Romesh Sobti-led company saw its operating profit increase by 12.5 percent year-on-year to Rs 1,769.39 crore.
During the quarter under review, IndusInd Bank's provisions for bad loans fell to Rs 335 crore, as against Rs 430 crore in the same quarter last year. However, this was significantly higher than the Rs 236 crore reported in the December quarter this year.
On the asset quality front, the private sector bank saw its gross non-performing assets, as a percentage of total loans, increased by just 1 basis point sequentially to 1.17 percent. Its net NPA ratio came in at 0.51 percent, 5 bps higher than at the end of December.
At the end of the March quarter last year, the bank's gross NPA ratio and net NPA ratio stood at 0.93 percent and 0.39 percent, respectively.
The lender's exposure to 40 loan accounts currently being reviewed by the National Company Law Tribunal or undergoing insolvency proceedings under the Insolvency and Bankruptcy Code stood at Rs 385 crore. Around 65 percent of this amount was provided for.
The bank also said that it had loans worth Rs 1,350 crore on its books that it had not classified as gross NPAs, despite them being classified as such by the Reserve Bank of India.
"The divergence was on account of a large cement M&A (mergers and acquisitions) bridge loan provided for in March 2017, and fully repaid in June 2017. There was hardly any impact on our bottomline and gross NPAs due to the divergence," said Romesh Sobti, Managing Director and Chief Executive Officer, IndusInd Bank.
The divergence in net NPAs stood at Rs 1,001 crore. The impact of these divergences on the lender's credit costs was a marginal 2 bps, the MD added.
Speaking about RBI's revised framework for resolving stressed assets, Sobti said it enforces some much-needed discipline in repaying loans.
"If you are a well run customer, it will not impact much. The arbitrage of not paying to few banks but other banks has gone. It brings in discipline in repayment, there may be some logistics issues and therefore more work to be done but it is a good stepping stone for Ind-AS accounting standards," Sobti said while speaking at a post-results press conference.
On the current legislation that allows banks to take defaulters to the NCLT for a resolution, Sobti said it was a well-drafted one. He said that there were bound to be a few hiccups here and there and that one cannot expect a Utopian result overnight, adding that banks could at least approach the NCLT now when something like this happens, which was not the case earlier.