Chennai-based public sector lender Indian Bank on Monday reported a net profit of R526 crore for the third quarter, against R491 crore in the same quarter last fiscal, registering a growth of 7%.
While the total income of the bank went up 32.8% from R2,641 crore to R3,505 crore, the net interest income increased 12.8%, from R1,038 crore to R1,170 crore. Similarly, the interest income was up 35%, from R2,392 crore to R3,224 crore.
?Good recovery and low operating costs have contributed to our bottom line. In the last three quarters, the bank had conducted 2,611 recovery camps, contacting over 55,000 borrowers and recovered R64,50 crore,? said TM Bhasin, chairman and managing director, Indian Bank. While its gross NPA was at 1.35%, the net NPA stood at 0.80%.
The bank’s restructured loan stood at R7,859 crore, out of which it had recovered and closed accounts amounting to R2,286 crore. The outstanding as on 31 December, 2011, is R5,573 crore, which is 6.33% of the loan book. Out of this, NPAs account for R340 crore, which is 6.10% of the restructured book. On the overseas front, the total global business of the bank rose to R2, 07,014 crore against R1, 74,935 crore, a growth of 18.34%.
Bhasin said the deregulation of savings account has boosted the bank’s NRE customer base, with the account clocking a robust 30% growth.
The bank, meanwhile, is planning to raise up to R1,000 crore through innovative perpetual debt instrument (IPDI) to augment its Tier-II capital. The board of directors of the bank has given the nod for offering perpetual bonds or debentures to FIIs. The bank is likely to hit the market with the offering by the end of the current financial year.
Said Bhasin: ?We are waiting for a good rate of interest to evolve. Currently, the rate is 9% and we are expecting it to come down at least to 8.7% by March, by when the bank will be ready with the bonds issue. The fund raised will take care of the bank’s R6,000-crore loan disbursal requirement ?.
The bank has got ‘AAA’ rating for the bonds from rating agencies, Crisil and Care.
The bank, which postponed its follow-on public offer (FPO) for want of conducive market conditions, had moved the Union government and RBI for perpetual bond as an option at the time of IPO request itself.
?The bank is not hurrying the FPO issue as we are adequately capitalised.
Out Tier-I capital is at 9.55% as at end-December 2011, well above the Basel-II requirement of 8%. Moreover, headroom is available in Tier-II for raising R6,195 crore,? he said.