IndusInd Bank Ltd on Tuesday reported a 23.81% jump in its June quarter net profit on higher net interest income as well as other income. Net profit for the quarter was Rs. 1,035.72 crore, up from Rs. 836.55 crore a year ago. According to Bloomberg analysts’ estimates, IndusInd Bank was expected to post a profit of Rs. 1,030.70 crore.
Net interest income (NII), or the core income a bank earns by providing loans, increased 19.64% to Rs. 2,122.43 crore from Rs. 1,774.06 crore in the same quarter last year. Other income was Rs. 1,301.60 crore, up 11.51%, year on year, from Rs. 1,167.26 crore. Provisions and contingencies were 12.92% higher at Rs. 350.01 crore from Rs. 309.97 crore. They climbed 4.31% sequentially from Rs. 335.55 crore.
The gross non-performing assets (NPAs) of IndusInd Bank increased 36.88% to Rs. 1,740.62 crore at the end of the June quarter from Rs. 1,271.68 crore in the same quarter a year ago.
As a percentage of total loans, IndusInd Bank’s gross NPAs stood at 1.15%, against 1.17% in the previous quarter and 1.09% in the same quarter a year ago. Net NPAs were 0.51% in the June quarter compared to 0.51% in the previous quarter and 0.44% in the same quarter a year ago.
IndusInd Bank’s loan book expanded 29% with its corporate loan book growing 30% and retail book 28%. “The main driver of credit growth is vehicle finance. We feel that the vehicle industry will be in a bull run for another two years,” said Romesh Sobti, managing director and chief executive officer, IndusInd Bank. “Non-vehicle retail loans like personal loans and loans against shares are growing well. The corporate book is more diversified. A lot of credit growth is coming from acquisitions—funding NCLT-linked sales,” he pointed out.
There was also good demand for renewable energy, both solar and wind, Sobti said, adding capacity utilisation in the sector was nudging 75%.
“We are, therefore, in for a secular run on loan growth,” he added.
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