IndusInd Bank net profit dives 62% in Q4 on IL&FS provisioning

IndusInd Bank's reported a 62% drop in its fourth quarter net profit to Rs 360 crore after it set aside provisions of Rs 1,274 crore for its exposure to IL&FS.

During the quarter ended 31st March 2019, IndusInd Bank classified Rs 3,004 crore infra assets of IL&FS group as non-performing assets (NPAs). The bank also wrote off loans of Rs 1,000 crore to IL&FS. Net profit in the corresponding quarter of the financial year 2017-18 stood at Rs 953.09 crore.

The bank's Board has recommended a dividend of Rs 7.50 per equity share for 2018-19.

IndusInd, which has an exposure of Rs 3,004 crore to IL&FS Group, made additional provisions during the quarter which ate into its profits. The bank had an exposure of Rs 2,000 crore to the holding company and Rs 1,004 crore to the operating companies which were classified as non-performing sub-standard assets which needed additional provisioning.

Romesh Sobti, managing director and chief executive officer, IndusInd Bank, said, "Both in FY19, as well as Q4 March 2019, while the bank has witnessed robust growth in its topline as well as in operating profits, aggressive one time provisioning for a group exposure in the infrastructure sector depressed the bottomline."

The private sector lender said it has provided for, in excess of prudential norms on income recognition, asset classification and provisioning to the advances under this account. Sobti said, "2019 is a milestone year for the bank as it completes 25 years of operation."

The bank's gross non-performing assets (NPA) rose to 2.10% of its gross advances as at March-end 2019 as against 1.17% by the end of the previous fiscal. Net NPAs or bad loans were 1.21%, higher than 0.51% at the end of March 2018. The gross NPAs of the bank stood at Rs 3,947.41 crore by the end of 2018-19 as against Rs 1,704.91 crore by March-end 2018. Net NPAs were at Rs 2,248.28 crore, up from Rs 745.67 crore a year ago.

The net interest margin (NIM) for the current quarter was 3.59% as against 3.97% in the year-ago period. Core fee income during the quarter was up 27% to Rs 1,419 crore as against Rs 1,113 crore in the year-ago period. Total advances as on March 31, 2019, were up 29% over the previous year to Rs 1,86,394 crore. Total deposits of the bank were also up by 29% to Rs 1,94,868 crore.

The shares of the bank closed 4.84% higher at Rs 1,517.55 on the BSE.