IndusInd Bank Q3FY19 profit surpasses estimates: Net profit at Rs 985 crore; gross NPA stable at 1.13%

Private lender IndusInd Bank surpassed analysts' estimates during December 2018 quarter (Q3FY19), by posting 5% growth in net profit to Rs 985 crore compared to Rs 936 crore witnessed in corresponding period of previous year. The bank's quarterly growth stood at 7% as against Rs 920 crore recorded in Q2FY19. A Bloomberg poll of analysts have predicted the bank's net profit to come in at Rs 825 crore in Q3FY19. The bank's Net Interest Income (NII) for the quarter was at Rs 2,288 crores against Rs. 1,895 crores in the corresponding quarter of the previous year, a growth of 21%. On quarter-on-quarter (QoQ) basis, NII rose sequentially by 4% from Rs 2,203 crores in Q2FY19. 

On December 2018, Gross NPA  was at 1.13% as against 1.16% as at December 31, 2017. However, current quarter's GNPA has increased from 1.09% registered in Q2FY19. In terms of value, GNPA was at Rs 1,968.15 crore in Q3FY19 vs Rs 1,498.70 crore in Q3FY18 vs Rs 1,781.36 crore in Q2FY19. 

Following which, IndusInd more than doubled its provision for GNPA in Q3FY19 to Rs 606.68 crore as against Rs 236.16 crore in Q3FY18. Provisions stood at Rs 590.27 crore in Q2FY19. 

In its financial audit report, IndusInd highlighted that advances granted to various companies and SPVs belonging to a Group in the infrastructure sector against certain identified cash flows and pertaining to specific assets, are ‘Standard’ as at December 31, 2018 on the basis of the conduct of the accounts till date.

It mentioned that since October 01, 2018, certain governance and management changes have taken place in the Group and measures to turn it around through a Resolution Plan are underway. Bank’s management is monitoring the developments and implications of the Resolution Plan. 

Thereby, in the interim, as a prudential measure, the Bank has made a contingent provision of Rs. 255 crores on these 'Standard' assets during the quarter ended December 31, 2018, in addition to an amount of Rs. 275 crores made during the quarter ended September 30, 2018.

Moreover, the net interest margin (NIM) of IndusInd came in at 3.89% in Q3FY19 vs 3.99% in Q3FY18 vs 3.84% in Q2FY19. 

Talking about the Q3FY19 result,  Romesh Sobti, MD & CEO, IndusInd Bank said,"The quarter witnessed a robust growth in its topline and core Operating Profit. During the quarter, we introduced ‘Nexxt’ credit card - India’s first interactive card that enables customers to switch between multiple payment options, thereby offering them with absolute flexibility."

Going  forward, Sobti adds, "the Bank will continue to delve deep into creating more such innovative offerings to provide customers with a rewarding banking experience.”

For nine month ended December 2018 period, IndusInd Bank's NII was at Rs 6,614 crores as against Rs. 5,490 crores in the corresponding period of the previous year, registering a robust growth of 20%.

Net Profit for the nine month ended December 31, 2018 was Rs. 2,941 crores (after considering prudential contingency provision of Rs. 530 crores) as against Rs. 2,653 crores in the corresponding period of the previous year, showing a growth of 11%. 

CASA (Current Account - Savings Account) Ratio improved to 44% against 43% and Current account deposit grew by 30% Y-o-Y from Rs. 20,370 crores as on December 31, 2017 to Rs. 26,526 crores as on December 31, 2018.

Advances as on December 31, 2018 were at Rs. 1,73,169 crores as compared to Rs. 1,28,542 crores in the corresponding period of the previous year, recording a growth of 35%.

Deposits as on December 31, 2018 were at Rs. 1,75,701 crores as compared to Rs. 1,46,086 crores in the corresponding period of the previous year, up by 20%. Total Business at Rs. 3,48,870 crores.

Increase in network to 1558 Branches/Banking outlets and 2453 ATMs as on December 31, 2018 as against 1320 Branches and 2162 ATMs as on December 31, 2017.

On Sensex, the IndusInd Bank is trading slightly lower by 0.24% at Rs 1,573.80 per piece at around 1507 hours.