IndusInd Bank Q4 net profit falls 16% YoY to Rs 302 crore: Key takeaways

IndusInd Bank missed Street expectations as the provisions for bad loans and upcoming contingencies spiked, while asset quality deteriorated.

The private lender posted a 16.18 per cent year-on-year (YoY) fall in profit at Rs 301.84 crore for the quarter ended March 31. The net interest income (NII) increased 44.62 per cent on a yearly basis to Rs 3,211.19 crore.

Here are key takeaways:


Asset quality down
Asset quality of the lender deteriorated sequentially. Percentage of gross non-performing assets (NPA) stood at 2.45 per cent in the March quarter against 2.18 per cent as of December 31, 2019. The figure stood at 2.10 per cent in the same period last year. IndusInd Bank said it recognised a few weak non-performing accounts in the Jan-March period. It made a floating provision of Rs 260 crore during the quarter, the lender said. Credit card GNPA is seen at 1.97 per cent.

Deposits up 4%
The bank said deposits grew 4 per cent overall, despite some large government deposit withdrawals during the quarter, especially after YES Bank collapsed.

Provided against Covid impact
The bank has made higher provisions to protect the book against Covid-19's impact. Provisions and contingencies increased 56.36 per cent YoY and 134 per cent QoQ to Rs 2,440.32 crore. It has now fully provided against IL&FS account.

“Rural economy seen recovering first after lockdown lifts,” the private sector lender said.

Recoveries remain healthy
The bank said it saw a collection of more than 95 per cent in March despite disruptions. Even in the month of April, healthy recoveries were seen, said Sumanth Kathpalia, MD and CEO of the bank.

Few takers for moratorium
The bank in a concall said there are very few clients coming for moratorium. Nevertheless, 15 bps of overall portfolio has been set aside due to moratorium, which includes Rs 23 crore in Q4.