IndusInd Bank PAT drops 64% to ₹510 cr.

IndusInd Bank’s reported consolidated first quarter net profit declined 64% to ₹510 crore following a steep rise in provisions and contingencies to ₹2,259 crore from ₹430 crore in the year-earlier period. Total income marginally rose to ₹8,682 crore (₹8,625 crore). The board approved a proposal to raise ₹3,288 crore through a preferential issue of equity shares at ₹524 apiece to marquee investors and promoter, the Hindujas

“The bank will use this capital to continue to invest in liabilities and asset franchise, technology and infrastructure platforms, to expand reach, product offerings and to improve customer experience whilst ensuring sustainable financial parameters,”IndusInd Bank said in a filing with the stock exchanges,” the lender said.

Sumant Kathpalia, managing director and CEO, IndusInd Bank Ltd., said. “This capital raise from long term, foreign as well as domestic investors, is strategic for us as this helps us bolster the bank’s balance sheet and position the bank well as the economy gradually navigates out of the COVID-19 pandemic.”

For Covid-19 related impact the bank has made a countercyclical buffer / floating provision of ₹500 crore, over and above ₹260 crore made during the quarter and year ended March 31, 2020.

“This counter cyclical buffer / floating provision has been made in addition to the provision required under the RBI Master Circular on Income Recognition and Asset Classification and the RBI Circulars on COVID 19 Regulatory Package on Asset Classification and Provisioning,” the bank said in the filing.