Indian Bank profit doubles as income rises, asset quality improves

Indian Bank on Wednesday reported a 102% jump in its net profit to Rs 1,396 crore for the third quarter, compared with Rs 690 crore in the year-ago period. The profit soared owing to an increase in its overall income and an improvement in the asset quality. Total income stood at Rs 13,551 crore, against Rs 11,481 crore, registering a growth of 18%.

SL Jain, MD & CEO, told reporters that the bank has performed well on all parameters and recorded increase in net interest income, non-interest income and fee-based income. “The bank is in a better financial health, well capitalised and the asset quality is continuously improving.”

The net interest income increased 25% to Rs 5,499 crore from Rs 4,395 crore. The non-interest income rose 10% to Rs 1,716 crore, compared with Rs 1,556 crore.

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Gross NPA fell 260 bps to 6.53% while net NPA reduced by 172 bps to 1%. “With the robust recovery process in place, we will be able to further reduce the GNPA,” he said.

Fresh slippages stood at Rs 1,192 crore during the quarter under review while it had a cash recovery of Rs 1,339 crore. Against the targeted recovery of Rs 8,000 crore, the bank already recovered Rs 6,500 crore in the nine months of the current fiscal.

The provision coverage ratio improved by 810 bps to 93.59% while the capital adequacy ratio stood at 15.74%. CET-I improved by 59 bps to 11.97% and tier I capital improved 55 bps to 12.58%.

Domestic net interest margin increased to 3.74% from 3.03% and the return on assets improved to 0.80% from 0.43%. Return on equity increased to 15.21% from 8.26%.

Jain said retail, agri and MSME (RAM) contribution to gross domestic advances stood at 62%. Home loan (including mortgage) grew 12%, auto loan by 27% and personal loans by 35%.

Advances grew 13% to Rs 4.5 trillion. Deposits rose 6% to Rs 5.9 trillion, compared with Rs 5.6 trillion. CASA deposits recorded a growth of 3% to Rs 2.4 trillion. The share of CASA in deposits stood at 40.4%. The bank plans to improve the low-cost deposit base with focus on CASA and build a strong retail term deposits portfolio through new relationship. It also targets a healthy and quality credit growth in both the RAM and corporate sectors.