Indian Bank posted a standalone net profit of ₹319.70 crore for the fourth quarter ended March 31, 2017, marking an increase of 241% over the ₹93.62 crore recorded in the same period in the previous year, on higher net interest income, other income and CASA, said a top official.
“The better performance is due to improvement in funds management, other income and current and savings account (CASA),” said A.S. Rajeev, executive director, Indian Bank.
For the period ended fourth quarter the bank registered a 22% increase in net interest income to ₹1,385 crore against ₹1,135 crore in the year-earlier period. Total income rose to ₹4,602 crore from ₹4,522 crore.
Gross non-performing assets stood at 7.47% of gross advances as of March 31, 2017 against 6.66% in the year-ago period while net non-performing assets were at 4.39% of net advances against 4.20%. Fresh slippages were on account of drought in Tamil Nadu and non-payment of education loans, among others.
Capital Adequacy Ratio (CAR) of the bank as per Basel III stood at 13.64% against 13.20%.
For the 12-month period ended March 31, 2017, net interest margin stood at 2.59% against 2.33%, net profit rose by 97.60% and net interest income by 18%. Priority sector advances increased from ₹50,334 crore to ₹54,976 crore.
Kishor Kharat, managing director and chief executive officer, Indian Bank, said: “During the current year, thrust will be on growth, improving asset quality and our aim is to bring gross NPAs to 5% and net NPA to less than 3%. Net interest margin is now 2.6%. This will be further improved to above 3%. Return on assets is 0.67% and it will be improved to more than 1%. Provision coverage ratio will be increased to more than 60% so that it will show the strength of the bank.”
“Although during last five years, our performance is good. Still there is scope for improvement. While improving the overall performance, guidance has been given for our field functionary from transforming good bank into great bank. While we are actually going to work for next five years, the thrust will be given on galvanising business parameters, revitalizing customer services, enhancing asset quality, augmenting operational efficiency and transforming digital banking,” Mr. Kharat said.
FPO, bond issue
“This financial year, Indian Bank will be coming out a with a follow-on public issue (FPO) of 4.75 crore shares to bring down the Centre’s stake from 82% to 75%. It would be followed by a bond issue by September—October. The money will also support bank’s growth,” he said.
Mr. Khatar said: “This year, the bank aims to grow its total deposits by 11-12% and advances by 12-13%. Thrust will be given to retail lending than corporate and non-corporate lending. Currently, retail lending stood at 51% and corporate lending at 49%. However, the bank will continue to focus on assisting small and medium enterprises sector.”
The board declared a dividend of ₹6 per equity share.against ₹1.50 per equity for the previous year.
Shares of Indian Bank rose by 9% to close at ₹310.80 on BSE on Tuesday.
