Lower base, core income boost Indusind net 52% to Rs 1,401 cr

Private sector lender Indusind Bank on Thursday reported a 52 percent growth in September quarter net income at Rs 1,401 crore on steady performance on core income and lower base in the year-ago period. The city-based bank had to set aside Rs 275 crore as contingency provisions for its exposure to the troubled infra lender IL&FS, which had crimped its net profit to Rs 920 crore in Q2 of FY19.

For the reporting quarter, net interest income grew 32 percent to Rs 2,909 crore on the back of a wide expansion in margin to 4.10 percent from 3.84 percent year ago and a 21 percent credit growth. The other income grew at a healthier 31 percent to Rs 1,727 crore, boosting the bottomline.

Total provisions for the quarter came in at Rs 737 crore as against Rs 590 crore a year ago, while the gross non-performing assets ratio came in at 2.19 as against 1.09. Stating that the company stock is correcting due to a complete misinformation campaign on its exposures to stressed accounts, managing director Romesh Sobti said its exposure to a stressed home financier has fallen to 0.27 percent from 0.36 percent earlier.

The overall exposure to shadow banks, excluding home finance players was at 3.68 percent of total loans as of September, he said. The bank also expects its exposure to a diversified media company to fall to 0.8 percent in a fortnight from 1.1 percent now.

The bank's net slippages came down to 0.35 percent for the reporting quarter from 0.54 percent in the preceding quarter, he said. It has accelerated provisions across various accounts and has improved its provision coverage ratio to 50.

Most of its retail book is on fixed rate, he said, adding it has decided to link floating rate loans to six-month certificate of deposit rates. He said loans of only up to Rs 10,000 crore are under floating rate as of now and that it is difficult to link EMI- based loans to floating rates.

On reports of its consumer banking head Sumant Kathpalia being chosen to succeed him, Sobti did not divulge any name but said the board will decide a name at the next meeting. He also said shortlisted candidates are being groomed for the leadership role. The company scrip tanked 6.15 percent to Rs 1,228.95 on the BSE as against a correction of 0.78 percent on the benchmark..