Chennai-based public sector lender Indian Bank has reported a 12.7% jump in its net profit for the second quarter to R469 crore against R416 crore in the same period in the previous financial year.

The total income of the bank went up by 32% at R3,377.crore against R2,559.crore, while total business rose to R2,02,590 crore from R1,67, 980 crore, registering a growth of 20.6%.

TM Bhasin, chairman and managing director, Indian Bank, said: ?The increase in net interest income and non-interest come, coupled with robust recovery of NPAs, have contributed to the net profit of the bank. During the quarter, the total business of the bank crossed the 2-lakh mark. While total deposits of the bank rose to R1,16,218 crore from R98,007 crore, registering a growth of 18.6 %, advances grew 23.4% to R86,372 crore from R69,973 crore.”

While the net interest income of the bank rose by 15.5% to reach R1135.4 crore, net interest margin (NIM) stood at 3.76%, maintaining the same level it had achieved during the previous quarter.

“Although three major accounts totalling R150 crore slipped into bad assets in the second quarter, the bank continued to maintain its good record of recovery at R245.4 crore. The net NPA-to-net-advances ratio declined to 1.21% from 1.29% with the provision coverage ratio touching 79.4%”, he said.

The Casa deposits improved to R34,227 crore from R31,240 crore, recording a growth of 9.6%.

With a view to attracting more customers in the wake of deregulation of savings account interest rates, the bank is overhauling its entire savings accounts portfolio.

“We are in the process of re-branding our entire savings account portfolio and we will come out with new sets of rates in a fortnight after studying all aspects. Accordingly, we will have different sets of rates for below and above 1 lakh savings account holders,” Bhasin said.

The bank’s priority sector advances grew 19.45% (R4, 706 crore) to R28, 907 crore with outstanding in agriculture advances showing a growth of 24.2% at R12,741 crore.

On the proposed FPO, Bhasin said, the bank is waiting for right pricing. As the bank may not need immediate funds, being well capitalised till March 2012, it can wait for right time, he said.