The improvement in the bottomline is due to effective control on the cost of deposits, says Chairman
Indian Bank has achieved a net profit of Rs.441.38 crore in the third quarter ended December 31, 2009 against Rs. 350.70 crore, a rise of 26 per cent over the corresponding period in the previous year. The net profit for the nine months ended December 31, 2009, has increased to Rs. 1,145.03 crore from Rs. 851.25 crore.
Announcing the bank’s results at a press conference here on Saturday, M. S. Sundara Rajan, Chairman and Managing Director, said the improvement in bottomline was possible with effective control on the cost of deposits. Due to poor credit offtake, the bank was focussing on quality credits. Non-food credit had steadily improved to Rs. 3,463 crore in the third quarter from Rs. 2,435 crore in the second quarter, Mr. Sundara Rajan said.
Of the total income of Rs. 2,308.29 crore achieved in the third quarter ended December 31, 2009, interest income accounted for Rs. 2,014.79 crore against Rs. 1,784.03 crore and non-interest income Rs. 293.50 crore (Rs. 287.34 crore). The latter head income includes recovery of bad debts of Rs. 42.31 crore (Rs. 30.22 crore) and profit on sale of investments of Rs. 77.27 crore (Rs. 109.53 crore). Net interest income has increased to Rs. 872.97 crore from Rs. 719.60 crore.
The operating profit is higher at Rs. 690.66 crore against Rs. 578.68 crore. Profit from treasury operations was Rs. 222.62 crore against Rs. 200.94 crore), corporate banking Rs. 288.87 crore (Rs. 204.81 crore), retail banking Rs. 161.43 crore (Rs. 160.16 crore) and other banking operations Rs. 19.02 crore (Rs. 11.50 crore).
Yield on advances
Despite a drop in yield on advances to 10.91 per cent from 11.33 per cent, the bank has considerably reduced the cost of deposits to 5.56 per cent from 6.32 per cent. As a result, cost to income ratio has come down to 40.79 per cent from 42.53 per cent, the CMD said. The bank restricted the interest expenditure to Rs. 1,141.82 crore from Rs. 1,064.43 crore. The operating profit, as a result, has risen to Rs. 690.67 crore from Rs. 578.68 crore. Total business of the bank has increased to Rs. 1,42,200 crore from Rs. 1,20,120 crore, registering a growth of 18.4 per cent.
Deposits have risen by 21.6 per cent to Rs. 84,732 crore from Rs. 69,660 crore. Gross advances were higher by 14 per cent at Rs. 57,468 crore against Rs. 50.460 crore. The bank focussed more on small and medium enterprises and extended credit to the extent of Rs. 7,699 crore against Rs. 5,291 crore.
Advances to corporate and commercial sectors were Rs. 27,972 crore (Rs. 25,803 crore) while that for retail banking was Rs.10,605 crore (Rs. 9,201 crore).