 "Indusind Bank")
Private lender IndusInd Bank’s net profit rose by 15 per cent year-on-year (Y-o-Y) to Rs 2,349 crore in the quarter ended March 2024, supported by growth in advances and improved yield on assets.
The net interest income (NII) of the bank rose by 15 per cent in the reporting quarter to Rs 5,376 crore from Rs 4,669 crore. Sequentially, NII rose by 2 per cent from Rs 5,296 crore in the third quarter of 2023-24 (FY24).
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Net interest margin slipped to 4.26 per cent for the fourth quarter (Q4) of FY24 from 4.28 per cent a year ago and from 4.29 per cent in December 2023.
The other income of the bank recorded a 16 per cent Y-o-Y rise to Rs 2,508 crore from Rs 2,154 crore. Total core fee income rose 10 per cent to Rs 2,293 crore in March 2024 from Rs 2,087 crore a year ago.
Sumant Kathpalia, managing director and chief executive officer of the bank, said the increase in profit has come from several factors, including growth in asset group and improvement in yield, which took care of the increase in deposit cost.
The yield on assets of the bank for Q4FY24 stood at 9.85 per cent as against 9.2 per cent in Q4 of 2022-23 (FY23). Meanwhile, the cost of funds rose to 5.59 per cent as against 4.92 per cent in the year-ago period.
The advances of the bank rose 18 per cent in the quarter under review to Rs 3.43 trillion from Rs 2.89 trillion in the year-ago period. Deposits increased 14 per cent Y-o-Y to Rs 3.84 trillion.
In total deposits, the share of current account savings account deposits dropped to 38 per cent from 42 per cent in the last quarter of FY24.
Kathpalia said that it was a ‘struggle’ to secure current account deposits.
“We plan to increase branches from 2,987 currently to 3,500 branches in the next two years,” Kathpalia said.
The provisions and contingencies of the bank dropped by 8 per cent to Rs 950 crore in Q4FY24 from Rs 1,030 crore in the corresponding quarter of FY23.
Sequentially, it slipped by 2 per cent from Rs 969 crore. However, the provision coverage ratio is flat at 71 per cent during the period.
Its gross non-performing asset (NPA) ratio stood at 1.92 per cent on March 31, 2024, as against 1.98 per cent as of December 31, 2023. The net NPA ratio moved down to 0.57 per cent on March 31, 2024, from 0.58 per cent at the end of the previous quarter.
According to Kathpalia, the bank added 11,000 employees last year and continues to invest in its employees.
“Our technology infrastructure is very robust, and we have invested a lot in creating a new data centre, new data systems, and client-facing technologies. We have also created disaster recovery capabilities which are real-time online applications. I think that is an investment we have made because we believe we have to create online real-time systems.”
The lender spends 8-10 per cent of its cost-to-income on information technology-related expenditures.
