IndusInd Bank on Tuesday reported a 30 per cent jump in its consolidated net profit in the April-June quarter at Rs 2,124.50 crore, helped by core income growth and lower bad loan provisions.
Amid a commitment by its promoters Hinduja family to infuse Rs 10,000 crore, the private sector bank’s managing director and chief executive Sumant Kathpalia said the lender has sufficient buffers to take care of growth requirements.
Kathpalia also declined to answer questions on the Hindujas’ acquisition of Reliance Capital and if units of Anil Ambani Group’s bankrupt entity will work with IndusInd Bank in the future.
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In the reporting quarter, the bank’s core net interest income grew 18 per cent to Rs 4,867 crore on a 22 per cent increase in advances and a 0.08 per cent expansion in the net interest margin to 4.29 per cent.
The other income was up 14 per cent to Rs 2,210 crore, while the overall deposits rose 15 per cent.
The overall provisions reduced to Rs 991 crore — the best in three years — as compared to Rs 1,251 crore in the year-ago period.
On the asset quality front, the gross non-performing assets ratio improved to 1.94 per cent, as against 2.35 per cent in the year-ago period and 1.98 per cent in March quarter.
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Kathpalia said IndusInd Bank’s vehicle finance portfolio faced some issues on the asset quality front, with the GNPA being over 2.2 per cent but added that there are some seasonal peculiarities in it as well.
At present, the overall consumer assets’ share is 54 per cent, while the corporate loan accounts for 46 per cent of the book, Kathpalia said, adding that the bank sees good momentum across business segments at present.
The lender will expand its recently launched credit card portfolio –- part of the unsecured lending –- only when the mortgage book, a part of the secured lending, rises, Kathpalia said.
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He said the lender has taken an exposure of over Rs 650 crore on the mortgages front as part of a pilot project at present, and will be observing its performance for the next six months, after which it will increase its exposure on it.
Kathpalia said the bank has decided for unsecured lending to not go beyond 20 per cent and will be appropriately managing the book, including the microfinance loans.
Its overall capital adequacy stood at 18.40 per cent as of June 30, with the core capital at 16.44 per cent.
Kathpalia said there have not been any discussions on capital infusion with its promoters, even as the Hindujas have gone public with their resolve to infuse over Rs 10,000 crore in the bank to hike their stake to 26 per cent.
He also declined to answer queries if it will be needing the fresh capital for acquiring companies in the asset management and insurance space, given the bank’s intent to expand into such allied areas. Discussions with the regulator are on about the foray, and any conversation can be had only after it receives the licence to enter a new industry, Kathpalia said.
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The bank scrip closed 0.17 per cent down at Rs 1,390.30 a piece on the BSE on Tuesday, as against gains of 0.31 per cent on the benchmark.