Private sector lender IndusInd Bank on Friday reported 39 per cent year-on-year (y-o-y) fall in consolidated net profit for the quarter ended December at ₹1,402 crore, led by higher provisions and operating expenses.
Fresh slippages or bad loans rose to ₹2,200 crore in Q3 from ₹1,798 crore last quarter.A total of ₹695 crore of fresh slippages emanated from microfinance loans, MD & CEO Sumant Kathpalia told reporters. Overall, gross and net non-performing asset ratio (GNPA, NNPA) rose to 2.25 per cent and 0.68 per cent from 1.92 per cent and 0.57 per cent last year, respectively.Accordingly, provisions rose 80 per cent y-o-y to ₹1,743 crore in Q3.
“We remain cautious on the microfinance segment. While the slippages (in the microfinance segment) may get elevated for another quarter, our customer base is showing early sign of stability which should start reflecting from Q1FY26 onwards,” the MD said.
Operating expense, meanwhile, rose 9 per cent y-o-y to ₹3,982 crore.
Business growth
IndusInd Bank’s overall advances rose 12 per cent y-o-y to ₹3.66 lakh crore, while overall deposits were up 11 per cent y-o-y at ₹4.09 lakh crore. Micro loans accounted for ₹32,564 crore of overall advances.
Net interest income (NII) or the difference between interest earned and expended was down 1 per cent y-o-y at ₹5,228 crore.Other income, too, moderated 2 per cent y-o-y at ₹2,355 crore.
“On the (loan) growth side, I think once the stability on the microfinance (book) happens, we should start seeing our businesses coming back to where we belong, which is 15-16 per cent,” the MD said.
Net interest margin (NIM) of the bank was down 36 basis points (bps) y-o-y at 3.93 per cent. “We have to wait for the microfinance (segment) to play out; I think it should play out in Q4(FY25). I think we should be back to 4 per cent and above NIMs starting first quarter of next year,” Kathpalia said.
Capital adequacy ratio of the bank was at 16.46 per cent as on December, with tier-I capital at 15.18 per cent.
