IndusInd Bank Q3 PAT up 69% to ₹1,959 cr; gross NPA, provisions decline
3 min read 18 Jan 2023, 03:58 PM ISTThe bank beats estimates in terms of profitability during Q3FY23 by garnering a PAT of ₹1,959.20 crore rising by 68.71% YoY.
PremiumIndusInd Bank has announced its third quarter results for the financial year FY23. The bank beats estimates in terms of profitability during Q3FY23 by garnering a PAT of ₹1,959.20 crore rising by 68.71% YoY from a profit of ₹1,161.27 crore in the same quarter last year. The lender also recorded a significant drop in gross NPA and provisions during the quarter.
However, compared to September 2022 quarter where PAT was ₹1,786.72 crore, IndusInd Bank posted a growth of 9.65% in Q3FY23.
Meanwhile, in Q3FY23, the bank's net interest income (NII) stood at ₹4,495.34 crore increasing by 18.5% from ₹3,793.57 crore in Q3 of FY22. But up by 4.5% from ₹4,302.05 crore in Q2FY23.
Net interest margin (NIM) stood at 4.27% during the quarter under review compared to 4.10% for Q3 of FY22 and 4.24% for Q2 of FY23.
The bank's provisions declined sharply on both year-on-year and quarter-on-quarter basis. The bank's provisions and contingencies stood at ₹1,064.73 crore in Q3FY23 -- down by 35.63% from ₹1,654.20 crore in Q3FY22 -- and also lower by 6.69% from ₹1,141.06 crore in Q2FY23.
Asset quality continued to improve in Q3FY23. In percentage terms, the bank's gross NPA was at 2.06% in Q3FY23 declining significantly from 2.48% in Q3FY22 and 2.11% in Q2FY23. Net NPA stayed below 1% with further moderation in Q3FY23 to 0.62% against 0.71% in Q3FY22 and 0.61% in Q2FY23.
In value terms, gross NPA was at ₹5,710.78 crore in Q3FY23 lower from ₹5,779.27 crore in Q3FY22 but higher from ₹5,567.12 crore in Q2FY23.
Among other key ratios, its provision coverage ratio was at 71%, capital adequacy ratio (CRAR) at 18.01% CASA at 42% and liquidity coverage ratio at 117% underscores the strength of the operating performance of the bank and adequacy of capital.
IndusInd Bank's yield on assets stands at 8.99% for the quarter that ended December 31, 2022, as against 8.36% for the corresponding quarter of the previous year. Cost of Funds stands at 4.72% as against 4.26% for the corresponding quarter of the previous year.
In terms of the balance sheet, the bank's deposits in Q3FY23 were at ₹3,25,278 crores as against ₹2,84,484 crores, an increase of 14% over December 31, 2021. CASA deposits increased to ₹1,36,379 crore with Current Account deposits at ₹50,007 crore and Savings Account deposits at ₹86,372 crore. CASA deposits comprised 42% of total deposits as of December 31, 2022. Meanwhile, in Q3FY23, the lender's advances stood at ₹2,72,754 crores as against ₹2,28,583 crores, an increase of 19% over December 31, 2021.
In the first cut note, Gaurav Jani – Research Analyst, Prabhudas Lilladher said IndusInd Bank's Q3 was a good quarter with core Pre Provision Operating Profit (PPOP) beat by 6% and lower provisions. He said, "NII at Rs44.9bn (PLe Rs44.1 billion) was slightly ahead, +18.5% YoY/4.5% QoQ while credit growth was 19.3% YoY/4.9% QoQ. NIM was a tad higher by ~4bps to PLe at 4.74% (~50% of the book is fixed.). Deposit growth at 14.3% YoY with TD/CASA growing by 15%/14% YoY. CASA ratio was 41.9% (42.3% in Q2FY23). Other income was Rs.20.7 billion (PLe. Rs20.2bn) with core fee income higher at Rs19.4bn. Opex was tad lower at Rs28.9 billion (PLe Rs29.3 billion) due to lower other expenses. PPoP beat at Rs.36.8 billion (PLe. Rs34.9 billion) growing by 14.8% YoY/1.6% QoQ. Core PPoP was Rs35.4 billion.
Highlighting IndusInd's asset quality, Jani said, "GNPA/NNPA reduced by 5bps/flat to 2.1%/0.6% owing to tad lower slippages. Provisions were lower at Rs10.6 billion (PLe Rs12.5 billion). Slippages were Rs14.7bn (PLe Rs18 billion)," adding, "PAT was higher at Rs19.5 billion (PLe. Rs16.8 billion) while core PAT at Rs18.6 billion beat PLe by 7%. The stock trades at standalone P/ABV of 1.7x/1.4x FY24E/FY25E ABV."
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