Public Sector Indian Bank has posted a 74.56% growth in its standalone net profit for the first quarter ended June 2019 to ₹365.37 crore on lower provisioning and higher income.
“We are back on track. We have control over non-performing assets (NPAs) and slippages,” said Padmaja Chunduru, MD and CEO, Indian Bank. “It [the higher profitability] is due to arresting fresh slippages, better recovery and performance, a boost in other income, return on assets, return on equity and a robust growth in retail, agri and MSME (RAM) sector,” she said.
During the period, the bank’s net interest income was lower by 1.2% while net interest margin contracted by 29 basis points. Total deposits grew by 15% and advances by 12%. Total income rose by 14% and other income by 58% respectively.
Indian Bank reported gross slippages of ₹1,035 crore against ₹1,391 crore. It recovered ₹919 crore against ₹1,604 crore. Provisions and contingencies dropped to ₹794.82 crore from ₹1,029.56 crore. Non-performing loan provision coverage ratio was 66.34%.
According to Ms. Chunduru, corporate sector accounted for 58.84% of fresh slippages at ₹426 crore followed by RAM sector. Currently, the bank has a diversified loan book with RAM sector constituting 60%.
Gross non-performing assets increased to 7.33% from 7.20% of gross advances. In rupee terms, it grew from ₹11,828 crore to ₹13,511 crore. Net NPAs grew from ₹5,999 crore to ₹6,824 crore. In percentage terms, it increased to 3.84% from 3.79%.
“NPAs are very much under control. But there is a slight increase in percentage due to denominator getting reduced,” she said.
Speaking on the status of the National Company Law Tribunal (NCLT) accounts, she said the bank had an exposure of ₹5,489 crore through 64 accounts of which provisions were made for 83.6% of the total exposure. The NCLT had adjudicated 16 accounts with a total exposure of ₹1,097 crore for liquidation.
