Shares of
IndusInd Bank trading higher and remained in the top performer in the Nifty 50 index. The stock climbed in today’s trade after the bank posted a strong number for Q1FY22.
Profit after tax (PAT) for the Jun-21 quarter was up 99% at Rs1,016cr due to lower provisions for loan losses. The provisions for loan losses were down 18.4% on a yoy basis and that contributed to profit growth. The cost to income ratio was slightly higher at 40.38%, while the liquidity coverage ratio was healthy at 146%.
Commenting on the performance, Mr. Sumant Kathpalia, Managing Director & CEO, IndusInd Bank said: “The first quarter of this financial year witnessed spread and subsequent containment of Covid second wave across the country. The economy once again showed resilience with higher activity levels compared to the first wave, supported by effective fiscal and monetary support. IndusInd Bank also responded well to the changing situation with smooth client servicing. The Bank conducted nationwide vaccination drives to inoculate our employee base.”
“The Bank witnessed strong growth in its deposit base (up 26% YoY) driven by CASA (up 33% YoY). The Bank was cautious in the loan growth (up 6%) given the challenging operating environment. Our Pre-Provision Operating Profits was strong at Rs3,185cr. The Bank has followed conservative provisioning approach with Net NPA of 0.84% and a surplus provision of Rs2,050 crores outside this for contingencies if any. We expect the economic recovery to gain traction as the second wave recedes coupled with the ongoing vaccination drive. The Bank is well positioned to cautiously participate in the economic recovery,” Sumant Kathpalia added.
IndusInd Bank Ltd is currently trading at Rs987.20 up by Rs11.55 or 1.18% from its previous closing of Rs975.65 on the BSE. The scrip opened at Rs995 and has touched a high and low of Rs1,008.80 and Rs985.65 respectively.
NIM at 4.06%, Net NPAs at 0.84%, Provision Coverage ratio at 72%, Capital adequacy ratio (CRAR) at 17.57% and Liquidity Coverage Ratio at 146% underscore the strength of operating performance, resilient liquidity buffers and adequacy of capital.
During the quarter, the country was hit by a “second wave” of COVID-19, with a significant surge in cases following the spread of mutant coronavirus strains leading to business activities remaining curtailed for the months of April and May. The second wave started to subside from June 2021 onwards following which there has been a gradual lifting of lockdowns, resulting in an increase in economic activity.
Pre Provision Operating Profit (PPOP) at Rs3,185cr for the quarter ended June 30, 2021 grew by 9% over the corresponding quarter of previous year at Rs2,928cr. PPOP/Assets ratio for the quarter ended June 30, 2021 stood at 3.67% compared to 3.68% a quarter ago.
Net Interest Income for the quarter ended June 30,2021 at Rs3,564cr, up by 8% from Rs3,309cr for the quarter ended June 30, 2020.Net Interest Margin for Q1 FY22 stood at 4.06% from 4.28 % for Q1 FY21 due to lower credit offtake and surplus liquidity placed under repo with RBI.