IndusInd Bank Q4 profit plunges 62 pc; IL&FS exposure takes toll

IndusInd Bank Wednesday reported 62 per cent fall in net profit at Rs 360 crore for the March quarter 2018-19 due to higher provisioning for loans extended to IL&FS.

Its profit in the year-ago period stood at Rs 953 crore.

The private sector lender has a total exposure of Rs 3,004 crore to IL&FS Group, of which Rs 2,000 crore is to the holding company and Rs 1,004 crore to operating companies/ special purpose vehicles.

The entire exposure to IL&FS was classified as non performing asset (NPA) in the fourth quarter.

"While the bank witnessed robust growth in its topline as well as in operating profits, aggressive one time provisioning for IL&FS depressed the bottom line," the bank's MD and CEO Romesh Sobti told reporters.

During the quarter, it made a provisioning of Rs 1,253 crore towards IL&FS Group. For the full year, provisions stood at Rs 1,803 crore.

It has a 70 per cent provisioning for exposure to the holding company and a 25 per cent to the SPVs.

Sobti said the bank has made a sufficient amount of provisioning for the exposure to the IL&FS Group.

"We have good reason to believe and there are indications in the market that there could be 90-100 per cent recovery on this particular exposure," he said.

Net interest margin (NIM) stood at 3.59 per cent as against 3.97 per cent in the year-ago period.

Net interest income (NII) grew 11 per cent to Rs 2,232 crore as against Rs 2,008 crore.

Core fee income rose 27 per cent to Rs 1,419 crore from Rs 1,113 crore in the same quarter last year.

Gross NPAs stood at 2.10 per cent as against 1.17 per cent, while net NPAs were 1.21 per cent compared to 0.51 per cent.

The bank's special mention accounts-2 (SMA2) exposure was Rs 641 crore as at March-end 2019.

Its advances and deposits grew 29 per cent each to Rs 1,86,394 crore and Rs 1,94,868 crore as on March 31, 2019.

It is looking at a loan growth of over 25 per cent in the current financial year.

The announcement of results was delayed as the bank was waiting for a final approval from National Company Law Tribunal (NCLT) for its merger with microfinance company Bharat Financial, Sobti said.

The proposal has been approved by the RBI, CCI and Sebi.

"We have got approval of RBI, CCI, Sebi and we had, therefore, reason to believe that it would be administratively convenient if we declare the joint results as it (final NCLT approval) was around the corner," Sobti said.

He said NCLT hearing is in the final stages and the orders have been reserved, but the court is on vacation.

He expects the final orders to come once the tribunal resumes.

The bank's scrip settled at Rs 1,517.55 apiece, up 4.84 per cent, on the BSE.