IndusInd Bank corrects over 9% in three days

IndusInd Bank fell 0.82% to Rs 1389.05, extending losses for third consecutive session as spike in provisions, worsening in asset quality and fresh slippages worried investors.

IndusInd Bank's net profit rose 32% Rs 1300.20 crore in Q3 December 2019 from Rs 985.03 crore in Q3 December 2018. Net interest income jumped 34.35% year-on-year (YoY) to Rs 3074 crore in Q3 December 2019.

The bank's provisions and contingencies (excluding tax provisions) jumped 72% to Rs 1043.45 crore in Q3 December 2019 over Q3 December 2018. The figure rose 41.44% in Q3 December 2019 compared with Rs 737.71 in Q2 September 2019.

In a conference call on 14 January 2020, the bank classified exposure to couple of account from housing financing company (HFC) and a travel segment as fraud in Q3 December 2019. The travel sector account was recognized as non-performing assets (NPA), while HFC sector account had exposure through investment book. The bank has provided 25% or Rs 240 crore for fraud through profit and loss (P&L) and 75% or Rs 720 crore was drawn down from the reserves. The drawn down amount shall be debited to P&L equally over the next 3 quarters.

The fresh slippages of loans increased to Rs 1945 crore in Q3, of which Rs 1237 crore came from the corporate book with slippages above Rs 100 crore included a travel company (Rs 282 crore), a diversified group from 3 stressed groups (Rs 250 crore; fully recovered), a paper company (Rs 177 crore).

In the third quarter, the bank's gross non-performing assets (NPAs) stood at Rs 4578.43 crore as on 31 December 2019 as against Rs 4370.2 crore as on 30 September 2019 and Rs 1968.15 crore as on 31 December 2018.

The ratio of gross NPAs to gross advances stood at 2.18% as on 31 December 2019 as against 2.19% as on 30 September 2019 and 1.13% as on 31 December 2018.

The ratio of net NPAs to net advances stood at 1.05% as on 31 December 2019 as against 1.12% as on 30 September 2019 and 0.59% as on 31 December 2018.

The result was announced during market hours on Tuesday, 14 January 2020. Following the result announcement, the stock fell 3.85% to end at Rs 1,481.10 on Tuesday. The stock has fallen 9.83% in three sessions from its closing high of Rs 1540.45 on 13 January 2020.

As on 31 December 2019, Induslnd Bank has 1851 branches/ banking outlet and 2721 ATMs spread across 745 geographical locations of the country.

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