Mumbai: IndusInd Bank shares on Thursday surged nearly 7 per cent to Rs 940 apiece a day after the private sector lender reported a 60 per cent rise in its first quarter consolidated net profit to Rs 1,631 crore on lower provisioning for bad assets.

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The Hindujas-promoted lender had reported a net profit of Rs 1,016 crore for the April-June period in the preceding fiscal.

Its core net interest income rose 16 per cent to Rs 4,125 crore on the back of an 18 per cent credit growth and an expansion in net interest margin to 4.21 per cent from 4.06 per cent.

The other income rose 12 per cent to Rs 1,932 crore, despite a 71 per cent decline in treasury operations at Rs 146 crore, which can be attributed to the hardening of yields-induced mark to market losses.

Its overall provisions declined 30 per cent to Rs 1,251 crore against Rs 1,780 crore in the year-ago period, as the gross non-performing assets ratio narrowed to 2.35 per cent from 2.88 per cent in the year-ago period.

The bank's fresh slippages stood at Rs 2,250 crore compared to Rs 2,088 crore in the preceding March quarter and were driven by reverses on the consumer banking front at Rs 1,647 crore.

Its managing director and chief executive Sumant Kathpalia told reporters that the slippages were higher on a Rs 1,058 crore of standard advances in the consumer segment slipping into NPAs, and added that the setbacks from restructured advances at Rs 921 crore are on expected lines.

The recoveries came at Rs 241 crore in the reporting quarter against Rs 716 crore in the preceding March quarter, but Kathpalia said that generally, the first quarter is slower on this front and activity will pick up in Q2 and Q3.

Overall write-offs stood at Rs 1,230 crore, which included a media and realty company, he said.

The bank is targeting a 20 per cent credit growth in FY23 and maintaining the NIM in the 4.15-4.25 per cent band, Kathpalia said, adding that the asset growth will include a 25-30 per cent growth in micro-lending and a 12-14 per cent expansion in its diamond industry portfolio, which has been off to a tepid start due to the impact of the Russian war and also the problems in Hong Kong.

It is all set to launch the mortgage loans product this quarter itself and also looking for more launches on the digital banking front, which will include having a super-app by December, Kathpalia said.

Its overall capital adequacy stood at 18.14 per cent, down from 18.42 per cent at the end of March.

Kathpalia declined to share any more details regarding the Enforcement Directorate probe against its employees regarding some remittances transactions carried out between 2011-2014.

With PTI Inputs