The Hindu Business Line : Indian Bank pays dividend after 12 years

With a 23 per cent growth in net profit (Rs 504 crore) in 2005-06, Indian Bank has declared a dividend of 13.58 per cent for the year — its first dividend in 12 years.

The last time the bank paid a dividend was in 1992-93, of Rs 50 lakh. The entire payout of Rs 101 crore will go to the bank's sole owner, the Government of India.

Operating profit was lower at Rs 893.65 crore compared to Rs 958.07 crore for 2004-05. The bank's Chairman and Managing Director, Dr K.C. Chakrabarty, said at a press conference today that the seeming decline in operating profit was because the bank decided to book certain expenditure relating to wages as operating expenses, rather than provide for them as was done in the previous year.

(Last year, the bank was under a different CMD.) Dr Chakarbarty said the bank was merely following "proper accounting practice".

During the year, accumulated losses of Rs 3,830.14 crore were set off against equity capital. As a result, the equity base of the bank stands reduced to Rs 743.82 crore.

Overall business of the bank grew to Rs 63,290 crore compared with Rs 53,188 crore in the previous year — a growth of 19 per cent. Deposits were Rs 40,805 crore as on March 31, 2006, versus Rs 34,808 crore at the end of the previous year. Advances amounted to Rs 22,485 crore compared with Rs 18,380 crore previously.

In 2005-06, Indian Bank recovered Rs 418 crore against Rs 311.58 crore. Fresh NPAs were about Rs 160 crore.

The ratio of net NPAs to net advances declined to 0.79 per cent from 1.35 per cent previously.

Centenary celebrations

On the Independence Day this year, Indian Bank will enter its 100th year. The bank has planned a Rs 15-crore celebration-cum-publicity programme for the year.

Dr Chakrabarty told Business Line today that the bank had given a mandate to Euro RSCG, a communications and advertisement company of the Havas group, "to advise us on how to go about the celebrations." Euro RSCG is headquartered in Paris, France and has over a global footprint.

He said that the bank planned "a series of activities". Euro RSCG will also advise the bank on the various events it should hold as part of the celebrations, inviting dignitaries, media management and publicity.

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