Indian private lender IndusInd Bank posted a third-quarter profit on Friday, helped by lower expenses and a drop in provisions from the previous quarter when it reported a loss.
The bank’s profit fell nearly 90% to 1.61 billion rupees ($17.5 million) for the three months ending December 31 from 14.01 billion rupees a year earlier. The results were an improvement from the 4.45 billion-rupee loss in the second quarter.
IndusInd has shuffled its top leadership over the past year, amid concerns over governance and accounting lapses, which led to the exit of former CEO Sumant Kathpalia and Deputy CEO Arun Khurana.
Earlier in the day, the bank named former State Bank of India Managing Director Arijit Basu as its next chairman as incumbent Sunil Mehta will step down when his term ends in January.
IndusInd took a $230 million hit to its accounts and posted its largest-ever loss in the March quarter. It swung back to profitability in the June quarter.
For the December quarter, the bank’s provisions and contingencies fell 20% from the previous quarter to 20.89 billion rupees. In the September quarter, the bank had raised provisions for its microloan portfolio.
Provisions are funds kept aside for losses that could result from potential bad loans.
Analysts have said that stress in unsecured lending has begun to ease as banks have become more cautious.
Micro loans are showing an improvement in “early buckets,” IndusInd said in an investor presentation on Friday.
The proportion of good loans turning bad rose 1% quarter-on-quarter, while such slippages in the micro loan book fell to 10.22 billion rupees from 10.72 billion rupees.
IndusInd’s expenses dropped 7% on year and 4% from a quarter ago.
The quality of its loan book improved slightly with gross non-performing asset ratio slipping to 3.56% from 3.6% at September-end.
Net interest income climbed 3% sequentially but fell 13% year-on-year.
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