IndusInd Bank falls over 2% on asset quality worries in Q4 performance

Marco Green
April 20, 2018

After the March 2018 quarter (Q4) result, the IndusInd Bank stock fell over 2 per cent intra-day, mainly because of the divergence of Rs 13.5 billion in non-performing assets (NPA) reported by the bank pertaining to FY17. IndusInd Bank stock was trading 0.69% down at Rs1,832 apiece on BSE in the afternoon trade on Thursday. The figures were in line with ETNow poll of Rs 955 crore.

This had the banks gross bad loans rising to 1.17 per cent of its loan book at Rs 1700 crore, and net NPAs jumping to Rs 750 crore or 0.51 per cent. Its net NPA ratio came in at 0.51 percent, 12 bps higher than at the end of March past year.

Net profit for the fiscal 2017-18 rose by a similar 26 per cent to Rs 3,605.99 crore compared with Rs 2,867.89 crore in 2016-17.

Addressing reporters, Sobti said the bank expects to integrate business with Bharat Financial by July. Total income during the quarter rose to Rs5,858.62 crore, as against Rs5,041.31 crore in the same quarter of 2016-17, the bank said in a regulatory filing. In value terms, gross NPAs were seen at Rs1,704.91 crore in the year ended March 2018 against Rs1,054.87 crore in 2016-17, while net NPAs or bad loans were to the tune of Rs745.67 crore, from Rs438.91 crore.

Meanwhile, Romesh Sobti, MD & CEO, IndusInd Bank, said the new stressed assets resolution framework would increase bad loans for banks, but quickly added that the RBI was justified in asking banks to identify stressed accounts immediately upon default agencies.IndusInd has a '385-crore exposure to six of the 40 stressed accounts identified by the RBI for insolvency proceedings and has made an aggregate provision of 65 per cent against these accounts. Net interest margin was stable at 3.97 per cent. "There is no cash shortage in other places", said Sumant Kathpalia, head, consumer banking, IndusInd Bank.

Other reports by Click Lancashire

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