Chennai -based public sector lender Indian Bank on Friday reported a 21.16% jump in its net profit to Rs 372.41crore for the quarter ended June 2017, compared with Rs 307.36 crore in the same quarter last fiscal. The bank attributed the growth to a steady rise in the net interest income. Speaking to reporters here after announcing the first quarter results, Kishor Kharat, MD & CEO, said the bank has improved its performance further in Q1 both quantitatively and qualitatively. “We were on one hand able to cut costs and on the other could register substantial increase in incomes,” he said. The bank’s total income for the first quarter stood at Rs 4,788 crore, an increase of 6% over Rs 4,513 crore reported in the year-ago period. The net interest income rose by 18% to Rs 1,460 crore in the first quarter of FY18 from Rs 1,237 crore in the same quarter last year. Kharat said that to be able to bring down cost of funds too contributed to the profitability of the bank. The bank’s other income, comprising fees, commissions and treasury revenues, rose by 48% to Rs 652 crore from Rs 441 crore.
The net interest margin (NIM) touched 2.73% as against 2.47%. Provisions and contingencies for the quarter were at Rs 880 crore as against Rs 596 crore. Its provisioning for non-performing assets (NPAs) more than doubled to Rs 681 crore in the first quarter from Rs 327 crore for the corresponding quarter of the previous financial year. The provision coverage ratio, indicating the strength of the balance sheet to absorb stress, stood at 61.65% at the end of June 2017. Gross NPAs came down to 7.21% at end of June 2017 from 7.47% as on March 2017. Likewise, the net NPA position improved to 4.05% from 4.39% as on March 2017. “ Going forward, we want to keep gross NPA below 7% and net NPA under 3%,” Kharat said. The MD and CEO said the bank reported a 5% decline in its corporate lending in Q1 due to the management decision to restrict this portfolio and focus more on retail, SME and farm lending. The capital adequacy ratio (CRAR) stood at 13.58% in June 2017, down from 13.98% a year ago. Operating expenses of the bank stood at Rs 859.16 crore as against Rs 774.80 crore. He said the size of the balance sheet as of June 2017 was at Rs 2,19,069 crore as against Rs 2,03,979 crore in the year-ago period. Total deposits were at Rs 1,91,462 crore, marking an increase of 7.91% over June 2016. Current account deposits grew by 33.81% over the previous year to reach Rs 11,316 crore and savings account deposit grew by 20.62% to Rs 57,060 crore.