India's IndusInd Bank reports 22% jump in Q2 profit on strong loan, interest income growth
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Indian private lender IndusInd Bank reported a 22.1% rise in second-quarter profit on Wednesday, helped by strong growth in loans and core lending income.
Net profit rose to 21.81 billion rupees ($262.00 million) in the three months ended Sept. 30 from 17.87 billion rupees a year earlier.
Net advances in the quarter jumped 21% year-on-year, the bank said in an exchange filing. CEO Sumant Kathpalia attributed this to the retail sector, with retail loans growing by 25%. Deposits grew 14%.
Indian lenders have been reporting double-digit loan growth consistently over the past few months, despite the Reserve Bank of India having hiked interest rates by 250 basis points since May 2022.
Banks have also shored up their deposit base to keep up with healthy loan demand and tightened liquidity conditions.
"The economic activity is expected to pick up pace with upcoming festive demand and robust consumption," Kathpalia added.
IndusInd's net interest income - the difference between interest earned and paid - rose 18% to 50.77 billion rupees while provisions and contingencies, or funds set aside to cover loan losses were down 14.7% to 9.74 billion rupees.
Net interest margin (NIM), an indicator of a bank's profitability, rose to 4.29% from 4.24% a year earlier.
Gross bad loans as a percentage of total loans - a measure of asset quality - eased to 1.93% at the end of September, from 1.94% at the end of June.
Shares of IndusInd Bank closed lower 1.1% ahead of the results. The stock has gained 16.5% so far this year compared to a 2.1% rise in the Nifty Bank Index.
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