IndusInd Bank shares drop 4% despite healthy July-September 22, check key highlights

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IndusInd Bank Q2 earnings

IndusInd Bank shares declined 4% to Rs 1,178 apiece on Thursday morning,  despite healthy results from the bank. The bank has reported a 57% rise in net profit to Rs 1,805 crore, Here are the key highlights: 

IndusInd Bank Q2FY22 results: Highlights

The bank reported its Q2FY23 earnings on Wednesday evening. Let us look at the details.

Profit beat estimates: The net profit rose 57% on a yearly basis to Rs 1,805 crore as against Rs 1,116 crore in the year-ago period. The profit is higher than the Street estimate of Rs 1,730 crore.

Net interest income rises: A bank’s main business is to borrow money and lend the borrowed amount at a rate higher than the rate at which they borrowed. The income generated from this differential is known as net interest income. Net interest income for the Bank grew 18% on a yearly basis to Rs 4,302 crore. Sequentially, NII increased by 4.3%. Net Interest Margin for Q2FY23 stood at 4.24% against 4.21% for Q1FY23.

IndusInd Bank Jul-Sep 22 earnings: Highlights

Other Income increases: Other income at Rs 2,011 crore for the quarter that ended September 30, 2022, as against Rs 1,841 crore for the corresponding quarter of the previous year, grew by 9% year on year. Core Fee grew by 24% to Rs 1,872 crore as against Rs 1,506 crore for the corresponding quarter of the previous year. 

Deposits: Deposits for the quarter ending September stood at Rs 3.15 lakh crore, as against Rs 2.74 lakh crore, an increase of 15% over September 30, 2021. Sequentially, deposits increased by 4%. CASA deposits increased to Rs 1.33 lakh crore with Current Account deposits at Rs 44,157 crore and Savings Account deposits at Rs 89,368 crore. CASA deposits comprised 42% of total deposits as of September 30, 2022.

Advances for Q2FY23 were Rs 2.60 lakh crore as against Rs 2.21 lakh crore, an increase of 18% over September 30, 2021. 

Asset quality improves: The Gross NPA was at 2.11% of gross advances as of September 30, 2022, against 2.35% as of June 30, 2022. Net Non-Performing Assets were 0.61% of net advances as of September 30, 2022, as compared to 0.67% in the year-ago period.

Provisions: Provisions and contingencies for Q2FY23 were Rs 1,141 crore as compared to Rs 1,707 crore for the corresponding quarter of the previous year, reduced by 33% YoY. Total loan-related provisions as of September 30, 2022, were at Rs 7,791 crores (3% of loan book). 

Capital Adequacy Ratio: The capital adequacy ratio (CAR) is a measurement of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. The Bank's Total Capital Adequacy Ratio as per Basel III guidelines reduced to 18.01% in the September quarter, as compared to 18.14% in the previous quarter. Tier I CRAR was at 16.44% as of September 30, 2022, compared to 16.55% as of June 30, 2022.