Private sector lender IndusInd Bank on Tuesday posted a net profit of Rs 510.39 crores for the quarter ended June 30 (Q1). The figure was down 64.4% year-on-year(YoY) from Rs 1432.54 crores in the corresponding quarter last year.
The Q1 results beat street expectations, with considerable increases in Net Interest Income (NII). Provisions increased as the entire financial sector braces for the impact of slowdowns created by the pandemic.
|IndusInd Bank||Q1 FY21||Q4 FY20||Q1 FY20||QoQ%||YoY%|
|Total expenditure excluding provisions||5754.43||6302.08||6033.66||-8.69%||-4.63%|
|Provisions and contingencies||2258.88||2440.32||430.62||-7.44%||424.56%|
Some key takeaways from the corporate filing were :
- Deposits rose 5% to Rs 2.11 lakh crore as of June 2020 from against a little over Rs 2 lakh crore as of June 2019.
- Net Interest Income (NII) for the quarter stood at Rs 3,309 crore against Rs 2,844 crore for the corresponding quarter last year, up 16.35% YoY
- Gross Non Performing Assets (GNPA) ratio stood at 2.53% compared to 2.45% YoY. [Gross NPA Ratio=Total NPA/Total Advances]
- Net NPA ratio stood at 0.86% compared to 0.91% YoY [Net NPA Ratio=Net NPA/Total Advances]
- Promoters increasing stake in the bank
One of India’s largest banks, IndusInd Bank has a weightage of 4.55% in the Nifty Bank Index. The results posted by the bank are indeed positive and will be a morale booster for the entire industry. The Reserve Bank of India (RBI) had on Friday projected GNPA ratios to rise up to 15% by March 2021, in a worst-case scenario. IndusInd Bank’s GNPA ratio of 2.53% is far below the projection, and the industry average.
The bank’s board also approved a proposal to raise Rs. 3,288 crore through a preferential issue of equity shares at a price of Rs 524/- per share. The bank’s promoters along with other parties will be participating in the issue. Promoters increasing stake is seen as a positive news, signifying their faith in the bank’s future.