Indusind Bank reported a net profit of ₹301.84 crore for the quarter ended March 31 as compared to ₹360.1 crore reported a year earlier. The profit declined as provisions increased from ₹1,561 crore to ₹2,440 crore.
The rise in provisions is due to a sharp increase in gross non-performing assets from ₹3,947 crore to ₹5,147 crore for the reporting period. Gross NPAs were at 2.45% of gross advances, compared with 2.1% a year earlier. The bank as also made a floating provision of ₹260 crore as a buffer to protect against future losses arising out of the nationwide lockdown that has adversely impacted business activities.
“The extent to which the COVID-19 pandemic will impact the bank’s operations and financial results depends on future developments, which are highly uncertain,” the lender said. The provision coverage ratio rose to 63.34%, higher than 52.53% as of December 31, 2019 and 43.04% as of March 31, 2019. In the post-earnings media interaction, the bank’s newly appointed MD & CEO Sumant Kathpalia said the bank had projected different scenarios as to how the economic lockdown would be lifted.
Mr. Kathpalia also said that March collections were over 95% from retail portfolios despite moratorium offered. The bank reported a net interest income of ₹3,231.19 crore for the quarter, up 44.74% year-on-year while the net interest margin for Q4 FY 2019-20 improved to 4.25% from 4.15% during Q3 FY2019-20 and 3.59% during Q4 FY 2018-19.
