Private lender IndusInd Bank posted a muted five per cent growth in net profit for the December quarter(Q3FY19) , after making an additional contingent provision of Rs 255 crore against exposure to the Infrastructure Leasing & Financial Services (IL&FS) group.
Net profit for the quarter stood at Rs 985 crore against Rs 936 crore a year ago (Q3FY18). On quarter on quarter basis, net profit rose seven per cent from Rs 920 crore.
Net interest income (NII), or the core income a bank earns by giving loans, was up 21% to Rs 2288 crore versus Rs 1895 crore last year. Other income was at Rs 1469 crore, up 24% from Rs 1187 crore a year ago.
While the bank has stated that its exposure to the IL&FS group is standard, it has made a total provision of Rs 600 crore against it. In addition to the Rs 255 crore provisioning during the December quarter, the bank had made a contingent provision of Rs 275 crore provision and a floating provision of Rs 70 crore in the previous September quarter.
The bank had earlier stated that it had a total exposure of Rs 3,000 crore against the IL&FS group, of which Rs 2,000 crore is against the holding company. The bank said that its exposures to the group range between SMA1 and SMA2.
“This quarter(March) we will make more provisions against the account(IL&FS) to move into a zone of comfort. The amount of more provisions to be made will depend on the realisable value of the assets in the holding company, said Romesh Sobti, MD & CEO, IndusInd Bank.
The bank’s asset quality remained stable. The gross non-performing asset (GNPA) ratio for the quarter was 1.13 per cent, lower than 1.16 per cent a year ago. However, it saw a rise over the previous quarter’s GNPA ratio of 1.09 per cent.
Provisions and contingencies surged more than 1.5 times to Rs 606.68 crore in the quarter from Rs 236.16 crore a year ago. On a quarter-on-quarter basis, it was a marginal rise from Rs 590.27 crore.
Net Interest Margin (NIM) stood at 3.83 per cent on December 2018 as against 3.84 per cent in the corresponding period of the previous year and 3.99 per cent in previous September quarter
CASA (Current Accounts-Savings Accounts) Ratio improved year-on-year to 44 per cent against 43 per cent and current account deposits grew 30 per cent to Rs 26,526 crore as on December 30, 2018.
Advances were up 35 per cent at Rs 1.73 trillion on December 2018, from Rs 1.28 trillion a year ago.
Deposits as on December 30, 2018 were Rs 1.75 trillion as compared to Rs 1.46 trillion in the corresponding period of the previous year, up 20 per cent.
The bank has put a succession plan in motion since four years, said Sobti.
The bank’s stock closed at RS 1600.80 on BSE, up by 1.47 per cent from previous close.