IndusInd Bank Q2 profit falls 3.4% QoQ, NII up 2.3%, slippages spike


Private sector lender IndusInd Bank reported a 3.4 percent sequential decline in September quarter profit, dented by higher provisions and slow net interest income growth.

The profit during the quarter declined to Rs 1,383.37 crore compared to Rs 1,432.5 crore reported in June quarter while the year-on-year (YoY) rise was 50 percent.

Net interest income, the difference between interest earned and interest expended, grew by 2.3 percent quarter-on-quarter (QoQ) (32 percent YoY) to Rs 2,909.5 crore in Q2 with 5bps improvement in net interest margin at 4.10 percent QoQ.

The stock slipped 5 percent to Rs 1,245 at the time of publishing this copy due to higher slippages and weak management commentary.

The loan growth for the September quarter stood at 20.8 percent YoY and 1.9 percent QoQ.

“The loan growth is at multi-year low. We expect slowdown to play out over next couple of quarters,” CEO Romesh Sobti said while addressing a press conference.

Numbers were largely stable as the profit was expected at Rs 1,379.8 crore and the net interest income at Rs 2,987.3 crore for the quarter, according to a poll of analysts conducted by CNBC-TV18,

On the asset quality front, the gross non-performing assets (NPA) increased to 2.19 percent in Q2 against 2.15 percent in previous quarter, but the net NPA declined to 1.12 percent against 1.23 percent on sequential basis.

IndusInd Bank reported slippages at Rs 1,102 crore in the quarter ended in September, which was quite higher compared to Rs 725 crore in the June quarter due to 174 percent increase in corporate slippages (at Rs 479 crore) and 13 percent in consumer slippages (at Rs 623 crore).

Provisions during the quarter remained elevated at Rs 737.7 crore, rising 71.3 percent compared to Q1FY20 and the YoY increase was 25 percent.

The provision coverage ratio improved to 50 percent in the September quarter against 43 percent reported in the June period.

Note: The year-on-year profit jump of 69 percent mentioned earlier corrected to 50 percent.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.