4 weeks ago
Mumbai-based private lender IndusInd Bank Ltd. is set to report its March quarter results on Wednesday, May 21. The lender may report a net loss during the quarter as various accounting issues and stress in the MFI portfolio will weigh on the bottomline.
A CNBC-TV18 poll expects the lender to report a net loss of ₹514 crore during the quarter, compared to a net profit of ₹2,349.1 crore, which it had reported during the same quarter last year.
IndusInd's Net Interest Income (NII) or core income is likely to decline by 11.4% from the same quarter last year to ₹4,762.4 crore, according to the CNBC-TV18 poll.
In its business update shared earlier, IndusInd Bank reported its weakest business momentum in at least five years.
IndusInd Bank's advances grew by 1.3% during the January-March period on a year-on-year basis, which was the weakest growth in 17 quarters. On the sequential basis, loan growth declined by 5.2%, which was the biggest decline in 37 quarters or more.
Deposits grew by 6.8% during the March quarter, in comparison to the year-ago period to ₹4.11 lakh crore. This was the weakest deposit growth reported by the lender in the last 19 quarters.
Among the key factors to watch from IndusInd's quarterly results, include pressure on the bank's Net Interest Margins (NIMs), both sequentially, as well as year-on-year.
Decline in operating profits, both sequentially and year-on-year, potentially elevated credit costs, higher slippages led by the microfinance sector, stable asset quality are some of the other key factors to watch during IndusInd's earnings.
Commentary on the new management team formation and business momentum ahead will be some of the key things awaited from the management commentary.
IndusInd Bank is currently without an MD & CEO as Sumant Kathpalia, stepped down from his position earlier this month in light of the fallout post the derivative accounting discrepancies coming to light.
The lender has said that it will be absorbing the full impact of losses from the incorrect accounting practices during its March quarter results.
On May 8, IndusInd's Internal Audit Department submitted a report on MFI discrepancies, where the lender had incorrectly recorded interest of ₹674 crore over three quarters, which was fully reversed as of January 10 this year. There were also unsubstantiated balances worth ₹595 crore in the bank's "other assets."
"The Board is taking necessary steps to strengthen internal controls, fix accountability of the persons responsible for these lapses and will take action as appropriate," the lender had said.
Shares of IndusInd Bank are currently little changed ahead of its results at ₹783. The stock is down 5.5% in the last one month.
