IndusInd Bank: A good start

IndusInd Bank that kicked off the earnings season, continued to deliver strong earnings performance in the December quarter, thanks to its well-diversified loan portfolio. IndusInd grew its loan book by 25 per cent y-o-y in the December quarter, led by both the corporate and retail segments. Within the retail segment, over a third of loans comes from commercial vehicle financing. After clocking 33 per cent in 2015-16 and 14.9 per cent in the September quarter, the growth in this segment moderated to 10 per cent in the December quarter. But the management indicated pick up during the quarter end. However, other segments such as car loans, credit card and loan against property have grown at a healthy clip.

Net interest margin remained stable sequentially at 4 per cent, thanks to its strong growth in high yielding retail segments. Also, the bank has about 70 per cent of loans under fixed rate structure, which helped cap the fall in yields, aiding margins.

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