IndusInd Bank returned to profit in the September quarter, reporting 12.42 billion rupees against a loss a year earlier. Deposits and lending expanded, provisions fell and bad-loan ratios improved. Its net interest margin nevertheless narrowed to 3.23 per cent. Management expects a recovery as surplus funds are deployed and the bank reduces its reliance on expensive funding.
Indian lender IndusInd Bank reported net profit of 12.42 billion rupees for the quarter ended September 30, compared with a loss of 4.37 billion rupees a year earlier. Net interest income rose to 45.69 billion rupees. Fee income also increased, while operating expenses declined.[1]
IndusInd’s net interest margin, the spread between its interest income and interest expense relative to earning assets, narrowed to 3.23 per cent from 3.32 per cent a year earlier.[1], [2]
Management expects the margin to recover by the fourth quarter as surplus funds are deployed and expensive funding is reduced. Chief executive Rajiv Anand attributed the September-quarter decline to excess liquidity. The bank said it had reduced high-cost certificates of deposit, a form of bank funding, by 100 billion rupees.[2]
The gross non-performing loan ratio fell to 2.73 per cent from 3.60 per cent a year earlier; the net ratio declined to 0.83 per cent from 1.04 per cent. Credit provisions also declined. Deposits reached 4.29 trillion rupees and lending 3.63 trillion rupees. The capital adequacy ratio was 16.59 per cent and liquidity coverage was 127 per cent.[1]
