IndusInd Bank is all set to report its quarterly financial results on Wednesday. The Mumbai-based private sector lender is widely expected to report a robust increase in net profit backed by healthy growth in interest income. However, analysts say its commentary on loan growth will be tracked closely as they fear it is likely to take a minor hit in its margin — or the amount of money a lender generates from loans and other products.

Analysts in a CNBC-TV18 poll expect the Mumbai-based private sector lender to report a 39.3 percent year-on-year jump in net profit for the April-June period.

They estimate its net interest income — or the difference between interest earned and interest paid — at Rs 4,089.8 crore, up 14.8 percent compared with the corresponding period a year ago.

However, many analysts are concerned about a slowing growth in its deposits though they draw comfort in a high CASA ratio. A higher CASA ratio indicates that a larger portion of a lender's deposits are in current and savings accounts than term deposits.

Simply put, a higher CASA or current account savings account ratio is a sign of lower cost of funds for banks, which have to bear nil or relatively lower interest payments on these accounts.

In a business update earlier this month, IndusInd Bank said its CASA ratio improved to 43.2 percent in the quarter ended June 2022 from 42.1 percent in the year-ago period. That was the lender's highest CASA ratio in 14 quarters.

On the other hand, its deposits increased 13.3 percent on year to Rs 3,03,094 crore — the slowest growth in six quarters.

Its net advances increased 18.4 percent on year to Rs 2,49,541 crore, according to the quarterly update.

CLSA analysts expect IndusInd's net interest margin — a key measure of profitability for financial institutions — to slip to 4.15 percent in the April-June period from 4.2 percent in the previous quarter.

The brokerage expects the lender's operating profit — or profit from business operations before taking into account interest and taxes — to come down three percent on year and 8.7 percent sequentially.

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