You are here: Home » Finance » News » Banks
Business Standard

IndusInd Bank posts 5% growth for Dec quarter due to IL&FS provisioning

The bank had earlier stated that it had a total exposure of Rs 3,000 crore against the IL&FS group, of which Rs 2,000 crore is aganst the holding company.

Nikhat Hetavkar  |  Mumbai 

IndusInd Bank

has reported five per cent growth in net profit at Rs 985 crore for the December quarter from a year before, after making additional contingent provision of Rs 255 crore against exposure to the defaulting Infrastructure Leasing & Financial Services (IL&FS) group. The rise over the earlier quarter was seven per cent.

Net interest income (NII), the core income a bank earns by giving loans, was up 21 per cent to Rs 2,288 crore. Other income was Rs 1,469 crore, up 24 per cent from a year before.

While the bank has stated it has standard s exposure to the group, it has made a total provision of Rs 600 crore against it. In addition to that done in the December quarter, it made a contingent provision of Rs 275 crore and a floating provision of Rs 70 crore in the previous quarter.

It stated earlier that its total exposure to the group was Rs 3,000 crore, of which Rs 2,000 crore was aganst the holding company.

“This quarter (March), we will make more provisions against the account (IL&FS), to move into a zone of comfort. The amount will depend on the realisable value of the assets in the holding company," said Romesh Sobti, managing director.

Asset quality remained stable. The gross non-performing asset (GNPA) ratio for the quarter was 1.13 per cent, lower than 1.16 per cent a year before but a rise over the September quarter’s 1.09 per cent.

ALSO READ: IndusInd Bank Q3 profit rises 5% from Rs 936 crore to Rs 985 crore

Provisions and contingencies surged a little more than 1.5 times to Rs 607 crore, from Rs 236 crore a year before. It was Rs 590 crore at end-September.

Net interest margin was 3.83 per cent, from 3.84 per cent a year before and 3.99 per cent the previous September quarter. The current and savings account ratio improved to 44 per cent, from 43 per cent; current account deposits grew 30 per cent to Rs 26,526 crore.

Advances were up 35 per cent at Rs 1.73 trillion. Deposits were Rs 1.75 trillion, up 20 per cent over a year.

The bank has put a succession plan in motion since four years, said Sobti.

The share price closed at Rs 1,600.80 on the BSE, up nearly 1.5 per cent from Tuesday’s close.

First Published: Wed, January 09 2019. 17:45 IST