For Indian Bank, FY25 was more than just another year of steady growth—it was a watershed moment in the lender’s 118-year history.
The Chennai-headquartered public sector bank crossed several milestones that underscored both the strength of its franchise and the success of its post-merger transformation. Net profit surged 35% year-on-year to breach the ₹10,000-crore mark for the first time, while global business crossed ₹13 lakh crore, just three years after surpassing the ₹10-lakh-crore milestone.
These achievements came amid a challenging operating environment for banks. Tight liquidity conditions, driven by global uncertainties, a pause in US rate cuts and tariff-related concerns, triggered foreign portfolio outflows of over ₹1.3 trillion and intensified competition for deposits. Despite these headwinds, Indian Bank delivered balanced growth across key parameters.
Deposits rose 7% year-on-year to ₹7.37 lakh crore, while advances grew at a faster pace of 10% to ₹5.88 lakh crore, reflecting healthy credit demand and prudent balance-sheet management. More importantly, the bank combined growth with a sharp improvement in asset quality, an area that has increasingly become a differentiator among public sector lenders.
Gross non-performing assets declined to 3.09%, while net NPAs fell to a historic low of just 0.19%, among the best in the industry. The improvement reflected stronger underwriting standards, effective recovery efforts and a sustained focus on risk management.
It was this combination of profitability, growth and asset-quality improvement that made Indian Bank the unanimous choice of the jury for the FE Best Banks Awards 2024–25 in the Public Sector Bank category.
Managing Director Binod Kumar attributes the performance to the bank’s ability to consistently outperform its own targets. “Even though we had guided for deposit growth of 8-10% and credit growth of 10-12%, we have been growing ahead of that trajectory,” he says. “Looking ahead, we are targeting a CAGR of 12-13% over the next three years.”
A key pillar of the bank’s strategy is its growing focus on the retail, agriculture and MSME (RAM) segments, which now account for nearly two-thirds of its loan book. Besides offering diversification benefits, the segment also provides stronger yields than large corporate lending. The approach has helped lift the yield on advances to 8.75%, while operating profit climbed to ₹18,998 crore in FY25.
To sustain profitability, Indian Bank is pursuing a three-pronged strategy: strengthening its CASA franchise to reduce funding costs, improving recoveries to lower credit costs and expanding fee-based income through digital transaction banking. The bank has also broadened its funding sources through new deposit products, salary account acquisition initiatives and digital payment solutions such as QR codes and POS terminals. During FY25, it raised ₹10,000 crore through long-term infrastructure bonds, enhancing balance-sheet flexibility.
The momentum has continued into FY26. Indian Bank reported another record net profit of ₹12,156 crore, while total business moved closer to the ₹15-lakh-crore mark. The numbers reinforce the bank’s emergence as one of the strongest and most consistently improving public sector lenders in the country—one that has successfully combined scale, profitability and prudence in equal measure.
