IndusInd Bank drop 20% as bad loans may rise amid Covid-19 outbreak

Published On: Tuesday, March 31, 2020 | By: Team KnowMyStock

Shares of IndusInd Bank were down 20 per cent lower circuit at Rs 329.25 after the bank said the outbreak of coronavirus (COVID-19) could push up its credit costs to around 200 to 210 basis point in March 2020 quarter, indicating a rise in bad loans. The management said the near-term impact of COVID-19 would have limited impact on their portfolio, assuming a 3-month disruption. The base-line assumptions say the impact of COVID-19 would remain for 3-4 months and demand would recover post-June 2020. Also, IndusInd Bank deposits shrink by 10-11% and almost two-third of reduction is on account of government-related accounts – this is largely related to general private sector bank stance. The stock price has corrected steeply in recent days, owing to concerns about asset quality and strength of funding franchise. The coronavirus outbreak has further impacted growth and asset-quality prospects in the select business segments.

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