SerpApi.Org
By Nishit Navin and Ashwin Manikandan
July 22 (Reuters) - India's IndusInd Bank posted a 47% jump in first-quarter profit on Wednesday, helped by a smaller amount of funds set aside for potential bad loans, and an interest earned on a tax refund.
The private lender is gradually returning to growth after a $230 million accounting lapse on internal derivative trades in the financial year ending March 2025 caused a leadership shakeup, and the bank tightened its lending standards.
In the June quarter, IndusInd's loans rose 3% from the previous quarter, marking the first sequential increase in six quarters.
Asset quality improved, with gross bad loans as a percentage of total loans falling to 3.25% at the end of June from 3.43% three months earlier. Provisions and contingencies reduced by 23% year-on-year to 13.4 billion Indian rupees ($138.77 million).
The bank reported a standalone net profit of 10.03 billion rupees for the three months ended June 30, up from 6.84 billion rupees a year earlier.
Net interest income, the difference between interest paid for deposits and earned from loans, grew 1% year-on-year and 7% from the previous quarter to 46.85 billion rupees.
"We had 2.84 billion rupees of interest on an income tax refund," CEO Rajiv Anand told reporters in a post-earnings call.
Gross slippages, or fresh loans turning bad, dropped 35% year-on-year, driven by a 78% fall in the microfinance segment.
Its net interest margin stood at 3.57% compared to 3.39% in the March quarter. NIM, excluding one-off tax refund, was 3.35%, it said.
FOREIGN CURRENCY DEPOSITS FROM NON-RESIDENTS
The bank said it was confident of raising foreign currency deposits from non-residents in line with its 3.6% market share of non-resident deposits, helped by the Reserve Bank of India's concessional swap facility.
The RBI introduced the swap facility in June to encourage foreign currency inflows, and banks have raised $17.41 billion through FCNR(B) deposits as of July 17.
"We are looking at all avenues to raise these deposits... The flow till now is reasonably strong," Anand said.
($1 = 96.5650 Indian rupees)
(Reporting by Nishit Navin in Bengaluru and Ashwin Manikandan in Mumbai; Editing by Ronojoy Mazumdar, Harikrishnan Nair and Vijay Kishore)
