IndusInd Bank faced a tough June quarter as the heatwave and elections across India led to slower loan disbursements. The bank’s asset quality also declined, but it expects improvements in the upcoming quarter.
“It was a challenging quarter,” said Sumant Kathpalia, MD & CEO. “We focused on collections and cautious disbursements due to external disruptions. However, we are committed to achieving 18-23% lending growth as disbursements are already picking up.”
Key points from the June quarter:
- Gross non-performing asset (GNPA) ratio increased to 2.02% from 1.92% in March 2024.
- Net NPA for the quarter was 0.60%.
- Major NPA contributors were microfinance (5.16%), cards (3.07%), loans against property (3.14%), and commercial vehicles (1.07%).
- New bad loans totaled Rs 1,536 crore, with Rs 1,488 crore from the consumer segment.
- Provisions rose to Rs 1,050 crore from Rs 992 crore a year ago.
Loan growth was 15% year-on-year to Rs 3.48 lakh crore, but only 1% sequentially due to a 5% drop in the microfinance book and flat credit card growth. Corporate loans grew by 12.8% year-on-year to Rs 1.57 lakh crore.
Despite a 2% year-on-year rise in net profit to Rs 2,171 crore, business slowed in the seasonally weak quarter. Net interest income increased by 11.1% to Rs 5,408 crore, with a net interest margin of 4.25%.
Total deposits grew by 15% year-on-year to Rs 3.98 lakh crore, with low-cost current account savings accounts making up 37%.
Kathpalia remains optimistic, expecting a better second quarter as rural areas recover from the pandemic’s effects.
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