IndusInd Bank Q1 profit tanks 68% to Rs 461 crore as provisions spike 5-fold

Private sector lender IndusInd Bank registered a 67.8 percent (year-on-year) decline in Q1FY21 net profit on the back of a five-fold increase in provisions for bad loans.

Standalone profit during the quarter declined to Rs 460.64 crore, compared to Rs 1,432.5 crore in corresponding period last fiscal.

Net interest income grew by 16.4 percent year-on-year to Rs 3,309.2 crore in quarter ended June 2020.

Asset quality has seen marginal weakening during the quarter with gross non-performing assets (NPAs) as a percentage of gross advances rising 8 bps sequentially to 2.53 percent, while net NPAs fell 5 bps QoQ to 0.86 percent in Q1FY21.

Provisions and contingencies shot up significantly to Rs 2,258.9 crore in quarter ended June 2020 largely due to COVID-19 related provisions, rising five-fold over Rs 430.6 crore reported in year-ago period. However, the same declined 7.4 percent quarter-on-quarter.

"During the quarter ended June 30, 2020, the Group made an internal assessment of the impact of the pandemic basis the current level of economic activities and the projected trajectory for the near future and made a countercyclical buffer / floating provision of Rs 500 crore, over and above Rs 260 crore made during the quarter ended March 2020," IndusInd Bank said in its BSE filing.

Non-interest income fell 8.7 percent year-on-year to Rs 1,519.2 crore impacted by lockdown, while pre-provision operating profit grew by 10 percent to Rs 2,861.33 crore in Q1 YoY.

Meanwhile, the bank approved issuance of over 4.76 crore equity shares on preferential basis at issue price of Rs 524 per share to Route One Offshore Master Fund LP Route One Fund I LP, ICICI Prudential Life Insurance Company, Tata Investment Corporation and AIA Company; and raised Rs 2,495.8 crore.