Indusind Bank Q1 Results: Net profit inches up 2%; reports uptick in stress in credit card segment

Indusind Bank Q1 Results: Private sector lender Indusind Bank on Friday reported a 2 per cent jump in consolidated net profit at Rs 2,171 crore for the June quarter. The lender, however, witnessed higher stress on the credit cards front during the quarter, its Chief Executive and Managing Director Sumant Kathpalia told reporters.

For the quarter under review, its core net interest income rose 11 per cent to Rs 5,408 crore on the back of a 15 per cent growth in advances and the net interest margin remaining flat at 4.25 per cent. The other income rose 10 per cent to Rs 2,441 crore.

It managed a deposit growth of 15 per cent, and Kathpalia made it clear that asset growth will be in line with liability growth. The bank continues to aspire for the 18-23 per cent growth in assets as listed down in a medium term plan, he said.

On the asset quality front, a bulk Rs 1,488 crore of the overall Rs 1,536 crore of fresh slippages came from the retail side, which were spread across lending lines, including microloans and vehicles.

The gross non-performing assets ratio increased to 2.02 per cent from the 1.92 per cent at the end of March.

The bank's overall provisions grew to Rs 1,050 crore during the reporting quarter, up from Rs 992 crore in the year-ago period, but Kathpalia made it clear that it has not dipped into any of the contingency provisions.

"There is an uptick on the delinquency on the credit card by 0.20-0.30 per cent in the industry and in our portfolio we are seeing about 0.30-0.40 per cent stress which is emerging in the credit card," he said, adding that the credit costs are well within its limits.

He said the credit costs on an annualised basis came at 1.21 per cent, and exuded confidence of it remaining within the targeted range of 1.10-1.30 per cent for FY25.

The bank has been cautious on certain segments, including personal loans and also micro loans, Kathpalia said, specifying that it reduced its portfolio by Rs 2,000 crore in the latter.

He, however, said on the personal loans front, it will continue to grow going ahead as well.

The disbursements were lower in the MFI and the vehicle finance side due to the impact of the heatwave and also the general elections, he said.

The bank's overall capital adequacy stood at 17.55 per cent as of June-end with the core buffer at 16.15 per cent.

The Indusind Bank scrip closed 1.68 per cent up at Rs 1,403.40 apiece on the BSE on Friday, as against gains of 1.62 per cent on the benchmark.