Other income including fees and commissions increased 18 per cent to Rs 1,788 crores in the quarter ended June 30 from Rs 1,520 crore a year ago.
Net interest income (NII), or the difference the interest a bank earns on loans and that it pays for deposits, increased 8 per cent to Rs 3564 crore in the quarter ended June 2021. CEO Sumant Kathpalia has set the bank an ambitious target of 16 per cent to 18 per cent credit growth this fiscal expecting a recovery in the bank‘s core areas namely, vehicle finance, microfinance and diamond financing business despite a slow 6 per cent year on year growth in the first quarter.
“49 per cent of our book is where we have domain specialisation. We are expecting medium and heavy commercial vehicles to take off from September. Microfinance collections are on the path to recovery and our diamond book is still very pristine. These are the businesses where we have domain expertise and hence can in terms of pricing, collections, and customer loyalty,” Kathpalia said.
IndusInd’s NPAs rose during the quarter with gross NPAs at 2.88 per cent of loans up from 2.67 per cent in March 2021 and 2.53 per cent a year earlier. Total slippages of Rs 2762 crore included Rs 1060 crore from the vehicle finance and Rs 675 crore from microfinance which was both hit due to the impact of localised lockdowns in the quarter.
The net additions in NPAs after recovery and upgrades of Rs 2372 crore were Rs 390 crore. Total provisions for NPAs and credit and losses at Rs.1,844 crores included Rs 1072 crore to cover for NPAs and Rs 510 crore linked to the Covid pandemic. It was lower than the Rs 2259 crore the bank had set aside a year earlier.
The bank holds a surplus provision of Rs 2050 crore or 3.6 per cent of its loan book, Kathpalia said.
“We will be relentless in our focus on loan recovery. Our restructuring book at 2.7 per cent of loans with an incremental 0.4 per cent added during the quarter. We do not expect any large delinquencies from this book,” he said.
The bank continues to be cautious and holds Rs 52,000 crore of surplus liquidity adding Rs 12,000 crore during the quarter which impacted its profits as net interest margin dropped to 4.06 per cent from 4.28 per cent a year ago.