IndusInd Bank reported a standalone net profit of ₹1,959 crore in Q3, registering a growth of 69% year-on-year.- Improved asset quality, margins, provision declines contributed to the bottomline growth.
- Its loans outpaced deposit growth even as cost of deposits increased, but the lender remained confident of guarding its net interest margins.
IndusInd Bank’s net interest income (NII) grew 18.5% YoY to ₹4,495 crore in Q3 from ₹3,794 crore a year ago.
Its net interest margin (NIM) improved to 4.27% in Q3, as against 4.1% a year ago. NIM is a measure of how much a bank is earning as interest income from its customers versus how much it is paying on deposits.
Asset quality witnessed an improvement, with gross non-performing assets (NPA) at 2.06% in Q3, significantly down from 2.48% a year ago. Net NPA also moderated to 0.62% as against 0.71% a year ago.
The lender also reported a 36% YoY decline in provisions to ₹1,065 crore in Q3 from ₹1,654 crore a year ago.
Net slippages – which is a measure of fresh additions to net NPA – remained elevated but improved to ₹1,467 crore from ₹1,572 crore in the previous quarter.
Here’s IndusInd Bank’s Q2 in numbers:
Source: Company reports
IndusInd Bank’s loan growth outpaced the growth in deposits during Q3, with total loans increasing 19% YoY to ₹2.73 lakh crore. Deposits, on the other hand, grew 14% to ₹3.25 lakh crore.
The cost of deposits increased 81 basis points YoY to 5.47%, reflecting the increase in interest rates.
IndusInd Bank’s small business loans and vehicle finance drove the growth in its loan book. Its vehicle loans grew 18% YoY to ₹71,665 crore, while disbursements in the segment increased 44% to ₹12,713 crore during this period.
Even as competition for deposits has been intensifying as seen by an increase in interest on deposits, IndusInd Bank’s CEO Sumant Kathpalia remained confident. “We will be able to maintain our NIM even when our cost of deposits goes up,” he said.
IndusInd Bank reported double-digit growth in its payments and digital banking initiatives during Q3.
The total outstanding amount of its credit card users increased to ₹7,714 crore in Q3, registering a 46% growth.
In terms of digital uptake of its services, the lender reported that 95% of its credit cards were sourced digitally, while 98% of savings accounts were opened via digital modes during the quarter.
It also reported that over 80,000 clients were onboarded via video know your customer (VKYC) mode every month in Q3 across its savings account, cards and personal loan segments.
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