IndusInd Bank Q3 profit rises 17%, NII up 18%

In line with estimates, IndusInd Bank reported a 17% year-on-year rise in its net profit for the quarter that ended December 31, 2023, at ₹2,301 crores as compared to ₹1,964 crore during the corresponding quarter of the previous year.

The private bank's net interest income (NII) for the said quarter saw a slight surge (4%) quarter-on-quarter at ₹5,296 crore, though the NII rose 18% year-on-year.

The bank's net interest margin (NIM) for Q3 of FY24 at 4.29% saw almost no change from the year-ago quarter and the previous quarter when it stood at 4.27% and 4.29%, respectively.

IndusInd Bank CEO says the bank remains on track in executing its strategy. "The Bank’s loan book grew by 20% YoY driven by robust retail segment growing 24% YoY. The asset quality metrics remained stable with GNPA at 1.92% and NNPA at 0.57%. IndusInd Bank continues to participate in the healthy economic outlook (of the country)."

The bank's "operating expenses" were ₹3,650 crore in Q3 FY24 against ₹2,885 crore in the year-ago period, thus recording a surge of 27%.

For the fiscal year so far till December 31, 2o23, IndusInd Bank's net profit came in at ₹6,628 crore vs ₹5,400 crore during the nine months of FY23. The bank's NII increased 18% to ₹15,239 crore in the said period vs ₹12,923 crore in the same period in the previous year.

As of December 31, 2023, IndusInd Bank's balance sheet increased to ₹4,88,865 crore from ₹4,44,485 crore as of December 31, 2022, showing growth of 10%. The CASA deposits increased to ₹1,41,924 crore, with current account deposits at ₹50,044 crore and savings account deposits at ₹91,880 crore. Advances were ₹3,27,057 crore by December 31, 2023, up 20% over December 31, 2022.

In terms of asset quality, IndusInd Bank says its loan book quality remains “stable”, with the gross NPA at 1.92% of gross advances as of December 31, 2023, vs 1.93% as of September 30, 2023. The net non-performing assets were 0.57% of net advances as of December 31, 2023, vs 0.57% as of September 30, 2023.

Provisions and contingencies came in at ₹969 crore vs ₹1,065 crore in the year-ago period, a downfall of 9%. The bank says it total capital adequacy ratio as per Basel III guidelines stood at 17.86% in the said quarter vs 18.01% in the year-ago period.

As of December 31, 2023, the bank’s distribution network increased to 2,728 branches or banking outlets, and its client base surged to 38 million.

Brokerage major Motilal Oswal in its recent report had said IndusInd's growth outlook remains "steady". IIB has been delivering consistent performance with both asset quality and return ratios improving steadily, the brokerage's January 15, 2023, research note said, adding the bank its preferred "BUY" in the sector. "We reiterate our BUY rating with a TP of INR1,900 (premised on 1.9x Sep’25E ABV)."

IndusInd Bank closed 1.82% down at ₹1,613.15 on the BSE today.