Lender provides ₹255 crore towards IL&FS Group loans

IndusInd Bank on Wednesday posted a 5.21% increase in net profit to ₹985.03 crore for the quarter ended December 31. The slower pace of growth in net profit is mainly due to a provision of ₹255 crore made for its exposure to the troubled IL&FS Group.

Net interest income rose 21% to ₹2,288 crore for the period under review while fee income grew 24% to ₹1,469 crore.

The bank said while the asset classification to the IL&FS Group was standard, as a prudential measure it has made the provision.

“Advances granted to various companies and SPVs belonging to a group in the infrastructure sector against certain identified cash flows and pertaining to specific assets, are ‘standard’ as at December 31, 2018 on the basis of the conduct of the accounts till date… In the interim, as a prudential measure, the bank has made a contingent provision of ₹255 crore on these standard assets during the quarter, in addition to an amount of ₹275 crore made during the quarter ended September 30,” the bank said adding total provisions attributable to this exposure is ₹600 crore.

The gross non-performing assets as at December end was at 1.13% as against 1.16% a year ago.

The overall provisions for the October-December period was ₹607 crore compared with ₹237 crore in the year-earlier period.

Operational profit

Romesh Sobti, MD & CEO, said apart from the IL&FS exposure, it was business as usual at the bank, while highlighting the 27% jump in operational profit to ₹2,117 crore during the quarter.

The lender said it is in line to achieve its credit costs guidance for the fiscal at 0.60%, excluding the provisions for IL&FS exposure.

The bank reported a stable net interest margin of 3.83% and a 35% year-on-year growth in advances to ₹1.73 lakh crore. Deposits rose 20% to 1.76 lakh crore.