IndusInd Bank posts highest ever quarterly consolidated PAT of ₹2,043 crore

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IndusInd Bank’s Quarterly net profit crossed the ₹2,000 crore mark for the first time in the fourth quarter, with the private lender reporting after-tax profit of ₹2,043 crore, up 46 per cent yoy and 4 per cent higher qoq. The consolidated results include the earnings of the wholly owned subsidiary Bharat Finance.

Net Interest Income (NII) grew by 17 per cent year-on-year to INR 4,669 crore. The NIM index for the quarter was 4.3 percent, flat from the previous quarter and slightly up from 4.2 percent a year ago. NII for the financial year was at Rs.2,317,592 crore, up by 17% over the previous year. Net profit for FY23 was Rs.7,443 crore, up by 55 per cent year-on-year.

Advances as of 31st March 2023 amounted to INR 2.9 crore, an increase of 21 per cent year-on-year.

In the earnings meeting, Managing Director and CEO Sumant Kathpalya said the bank’s three business segments are showing strong growth, but payments in auto finance were slightly lower compared to the previous quarter due to the strong base in the previous quarter led by festival-led consumption.

While unsecured retail loans have been a strong growth segment for the banking sector, Kathpalya said the bank has been “optimistically cautious” and is going slower because it also has a large microfinance portfolio.

He said that unsecured consumer loans currently constitute 4.8 percent of the bank’s portfolio and will remain below 5 percent, adding that the book of microfinance institutions constitutes 12 to 13 percent. Loan growth for FY24 has been pegged at 18-23 percent.

Deposits grew by 15 per cent year-on-year to Rs. 3.4 crore, driven by a 19 per cent growth in retail deposits. Current and savings account deposits increased to ₹ 1.3 crore, accounting for 40 per cent. Kathpalia pegged retail deposit growth of 22-23 percent for FY24.

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He said the focus will remain on chopping deposits and not the huge deposits which constitute 28 percent of total deposits, adding that the bank wants to increase the share of retail liabilities in deposit growth to 85 percent from the current 73 percent.

Total NPA

The overall NPA rate improved to 2.0 percent from 2.1 percent in the prior quarter and 2.3 percent a year ago, while net NPA was unchanged at 0.6 percent, quarterly and annually.

A significant part of the slips of MFIs is due to restructuring writers or from the eastern part of the country, which has turned to the NPA. However, the 30-day maturity book has fallen to 1.2 percent of the portfolio, and with the bank acknowledging all its NPAs, the MFI’s book is expected to be “cleaned up” in the future, he said, adding that net slippages would result in It stays in the range of 90-120 bps.

Going forward, IndusInd Bank will look to transform its microfinance book into a micro banking unit and increase its penetration of affordable housing and home improvement loans, including mortgage portfolio building as a core competency. The bank also plans to grow the register of micro, small and medium enterprises to account for more than 25 percent of loans from 10 percent at present.