The bank had posted a net profit of Rs 510.39 crore in the corresponding quarter of the previous financial year.

Its total income during April-June 2021 rose to Rs 9,362.76 crore from Rs 8,682.17 crore in the year-ago period, according to a regulatory filing by IndusInd Bank.

Interest income was up at Rs 7,574.70 crore, against Rs 7,161.73 crore a year ago.

Income from retail banking rose nearly 22 per cent to Rs 5,685.53 crore in the June 2021 quarter, from Rs 4,674.06 crore in the year-ago quarter.

The private sector lender said it adopted a cautious stance in its business given the impact of the second COVID-19 wave, but is now feeling more confident to maintain the 16-18 per cent target on growth in loan book.

Like its peers, it did face asset quality issues, with fresh slippages of Rs 2,762 crore during the three-month period, driven by its consumer finance business at Rs 2,342 crore. However, it said that the deductions were also very high through write-offs, recovery and upgrades of assets at Rs 2,372 crore.

This limited the impact on the reported number of gross non-performing assets ratio, which increased to 2.88 per cent as of June 30, as against 2.53 per cent a year ago.

Net NPAs or bad loans, however, came down to 0.84 per cent from 0.86 per cent a year ago.

Its Managing Director and CEO Sumant Kathpalia said it is carrying adequate provisioning for the bad assets and the ones that it has recast, which includes a counter-cyclical provision of Rs 760 crore and a surplus Rs 2,050 crore provision for standard contingent provisions.

The overall provisions are 123 per cent of the GNPAs, Kathpalia added.

Its overall provisioning declined to Rs 1,844 crore from Rs 2,259 crore in the year-ago period, giving a big boost to the bottomline (profit).

It restructured 0.4 per cent of book during the quarter under the May 5 circular of RBI, to take the overall recast book to 2.7 per cent, he said.

Kathpalia added that it is prudent and allows for the dispensation only if it sees hope of a return to normalcy in an account.

Among the fresh slippages, the vehicle finance contributed a bulk Rs 1,060 crore, which was attributed to issues around trucks plying in the intermittent lockdown. The secured retail came at Rs 359 crore, unsecured retail at Rs 249 crore, microlending contributed Rs 674 crore and corporate had Rs 421 crore, including one realty account of Rs 270 crore.

He said vehicle finance is normalising and demand is also returning across the segment, barring medium-to-heavy commercial vehicles which will take time to return back.

On the microfinance side, it opted to add 80 per cent less clients at 2 lakh during the quarter as against the usual run rate of 10 lakh, he said adding that things are improving now, barring West Bengal, Kerala and Karnataka.

Even though it has re-started lending to the segment, the new adds will be restricted to 50-75 per cent of the pre-COVID-19 averages, he said.

Kathpalia said it is maintaining its 16-18 per cent credit growth target for the fiscal, even though it achieved only six per cent growth in the first quarter on a year-on-year basis. It will be focusing on areas of its specialisation including vehicle finance, microlending and diamond finance to achieve the number.

The slower loan growth and a contraction in net interest margin to 4.06 per cent led it to post an eight per cent growth in the core net interest income at Rs 3,564 crore, while the non-interest income for the reporting period saw an 18 per cent growth to Rs 1,788 crore.

The bank, which had witnessed some concerns on the liabilities side last year, witnessed a 26 per cent growth in deposits with the entire contribution coming from retail side, Kathpalia said adding that it could attain this despite reducing its interest rates.

The overall capital ratio stood at 17.57 per cent with the core Tier-I at 15.59 per cent, and the bank has no plans of going for an infusion, he said.

The bank's consolidated financial statement comprises statements of IndusInd Bank, Bharat Financial Inclusion Ltd (fully owned subsidiary), and IndusInd Marketing and Financial Services Pvt Ltd (associate company).

On a standalone basis, the lender's net profit jumped over two times to Rs 974.95 crore in the June 2021 quarter, compared with Rs 460.64 crore in the year-ago period. Income rose to Rs 9,355.77 crore, from Rs 8,680.92 crore a year ago, the bank said.

The RBI's ban on Mastercard will impact new card issuances by 5-6 per cent, Kathpalia said adding that it already has a tie-up with rival card issuer Visa.

The bank scrip closed the session 0.58 per cent down at Rs 975.65 a piece on the BSE, against a correction of 0.52 per cent on the benchmark.