Indian Bank profit up despite provisions

Public sector lender Indian Bank has posted a 62.42% increase in its standalone net profit for the third quarter ended December 2019 to ₹247.96 crore despite a surge in provisions.

“Earnings of Indian Bank remained good despite the recognition of a huge sum of ₹1,325 crore of Dewan Housing Finance Corporation Ltd. (DHFL) account as a non-performing asset (NPA) during the last quarter,” said Padmaja Chunduru, MD and CEO, Indian Bank.

“Also, a divergence provision of ₹200 crore has been made. The bank is well positioned and the results are in line with our expectations,” she said.

During the period under review, total income increased to ₹6,506 crore from ₹5,269 crore. Net interest income rose 14% to ₹1,955 crore while net revenue (net interest income plus other income) grew 38% to ₹2,994 crore. Net interest margin increased by three basis points (bps) and touched 2.91%.

Talking about gross NPAs, she said it stood at 7.20% of gross advances as on December 2019, declining by 26 bps. Net NPA came down from 4.42% to 3.50%. Provision coverage ratio improved to 70.84% from 60.91%.

Fresh slippages during the quarter stood at ₹2,138 crore while cash recovery was ₹350 crore.

NCLAT cases

Referring to National Company Law Tribunal (NCLT) cases, she said there were two-three big corporate loans amounting to about ₹800 crore. “We don’t know when they will come up,” she added.

Total business crossed the ₹4.50 lakh crore-mark with a growth rate of 12% over the corresponding year-ago period. “It is set to double in size by June 2020,” she said.

According to her, an increase of 12% year-on-year in business was propelled by good growth, both in deposits and advances. Corporate advances accounted for 36% and retail advances at 64% of the total disbursements.

She hoped the momentum in corporate sector growth would happen during the fourth quarter and they were signs of early green shoots. Regarding amalgamation with Allahabad Bank, she said the process was on and all activities were being followed as per expected timelines.“We are sanguine that this would be a seamless integration resulting in good synergy for the bank and offer improved products and services for the customers,” she said.

Domestic CASA deposits recorded 10% growth and its share stood at 34.51% of total deposits as on December 2019 against 35.73%, mainly on account of term deposits outgrowing CASA. The bank had a capital adequacy ratio of 15%.

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Printable version | Apr 13, 2021 11:22:18 PM |

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