Midsize private sector lender IndusInd Bank on Thursday posted a 27 per cent surge in March quarter net at Rs 953.09 crore despite a surge in bad loans as the bank for the first time disclosed a Rs 1,350-crore divergence in its bad loans reporting for fiscal 2017. For the full fiscal 2017-18, the Hinduja Group-run bank reported a 27 per cent growth in its bottomline at Rs 3,605.99 crore.

IndusInd Bank, known for its healthy asset quality despite its overdependence on vehicle financing which constitutes close to a third of its Rs 1.44-trillion loan book, is the latest to join the list of NPA underreporting private sector lenders after HDFC Bank,ICICI Bank Axis Bank, and Yes Bank. Among the large private sector banks only Kotak Mahindra Bank is yet to report to do so.

The maiden under-reporting of bad loans, as found by a Reserve Bank audit, had the bank counter slipping 0.6 per cent at Rs 1,834.10 after rallying over 3 percent in anticipation of the earnings announcement. Against this, the becnchmark Sensex rose 0.3 per cent.

This had the bank’s gross bad loans rising to 1.17 per cent of its loan book at Rs 1,700 crore, and net NPAs jumping to Rs 750 crore or 0.51 per cent. This has led to a 42 per cent spike in provisions sequentially at Rs 335 crore, or a 0.93 per cent rise annually from 0.73 per cent. The core net interest income grew 20 per cent during the reporting quarter to Rs 2,007.59 crore, while a 56 per cent dip in trading income resulted in non-interest income staying flat at Rs 1,208.51 crore.

Managing director and chief executive Romesh Sobti said it did not make any mark-to-market losses on its investments, therefore there was nothing to be ammortised but there was a dip in trading income due to a massive spike in bond yields during the quarter.

IndusInd under-reports Rs 1,350-cr NPAs for FY17