Indian Bank profit drops 35% to ₹207 cr

The Chennai-headquartered Indian Bank has a reported 35 per cent drop in net profit at ₹207 crore for the first quarter ended June 30, 2014, against ₹317 crore reported in the comparable previous year quarter. T.M. Bhasin, Chairman and Managing Director of the bank, pointed out that there was an exceptional profit of ₹314 crore on account of trading in securities in the first quarter of 2013-14, as compared to ₹36 crore in the quarter under consideration. “If we set aside this treasury profit, the net profit from core operations would have been higher by ₹168 crore,” he explained.

Total income during the quarter fell to ₹4,144 crore (₹4,195 crore).

The gross non-performing assets rose to 4.01 per cent (₹4,722 crore) from 3.4 per cent (₹3,722 crore) last year. Net NPAs were at 2.48 per cent, or ₹2,856 crore (2.31 per cent, ₹2,485 crore in similar previous quarter). During the quarter the bank shed high-cost debt worth ₹7,000 crore.

Total deposits as on June 30 were up to ₹1,55,336 crore (₹1,49,582 crore). The bank also registered growth in CASA (current account/savings account) share at 29.18 per cent (27.97 per cent). Gross advances improved to ₹1,17,653 crore (₹1,09,213 crore).

The bank’s net interest margin dropped to 2.5 per cent from 2.94 per cent last year.

The capital adequacy ratio as per Basel II was at 13.71 per cent for quarter ended June 2014, of which Tier I capital stood at 10.97 per cent. As per Basel III, it was at 13.28 per cent.

Taking into account the ploughback of profit, the capital adequacy ratio would improve to 13.91 per cent (Basel II) and 13.47 per cent (Basel III), Bhasin said.