IndusInd Bank Q4 Profit Falls To ₹302 Crore

Private sector lender IndusInd Bank registered a 16.17 per cent drop in net profit in the fourth quarter of last fiscal at ₹301.84 crore against ₹360.10 crore a year ago. For 2019-20, the bank’s standalone net profit surged by 33.8 per cent to ₹4,417.91 crore against ₹3,301 crore in 2018-19.

“There is a high level of uncertainty about the duration of the lockdown and the time required for things to get normal. The extent to which Covid-19 pandemic will impact the bank’s operations and financial results is dependent on the future developments, which are highly uncertain. In this backdrop, during the quarter and year ended March 31 2020, the bank has made a counter cyclical buffer/ floating provision of ₹ 260 crore,” the bank said.

“Based on stress tests, we are expecting moderate to medium to stress in a scenario where 50 per cent of the economy opens up on May 3, balance 25 per cent by the first week of June, and the remaining 25 per cent by the first week of July. Nobody can predict exactly what will happen,” said IndusInd Bank Managing Director and CEO Sumant Kathpalia in a media call, adding that he expects rural economy to recover faster after the lockdown.

The bank has slowed down on unsecured business, he further said, adding that the objective is to protect the portfolio.

On the corporate side, it will look to granularise the book and will moderate group exposures as well as exposure to sectors such as commercial real estate and NBFCs. It expects corporate loan growth of six per cent to eight per cent and is hopeful that its deposits will bounce back, said Kathpalia.

For the quarter ended March 31, 2020, IndusInd Bank reported a 21.3 per cent increase in total income to ₹ 9,158.57 crore against ₹7,550.43 crore in the same period a year ago.

Net interest income during the fourth quarter increased 44.74 per cent to ₹3,231.19 crore, from ₹ 2,232.38 crore a year ago. Net Interest Margin for the fourth quarter improved to 4.25 per cent from 4.15 per cent during the third quarter and 3.59 per cent during fourth quarter of 2018-19.

Total provisions surged by 56.4 per cent to ₹ 2,440.32 crore for the fourth quarter last fiscal compared to ₹ 1,560.69 crore in the same period a year ago. It made a general provision of ₹23 crore during the quarter and year ended March 31, 2020, for borrowers to whom the benefit of asset classification was extended due to the moratorium.

Gross non-performing assets rose to ₹ 5,146.74 crore or 2.45 per cent of gross advances as on March 31, 2020, from 2.1 per cent a year ago. Net NPAs were lower at 0.91 per cent of net advances as on March 31, 2020, from 1.21 per cent a year ago.