Our Bureau

Indian Bank has posted an impressive performance, with a 75 per cent growth in net profit for the June quarter. The Chennai-based PSB lender managed to contain slippages and improve recoveries, and posted higher interest and other income.

The bank’s net profit grew to ₹365 crore for the quarter ended June 30, 2019, compared to ₹209 crore in the year-ago quarter.

“Riding on higher interest income and a boost in other income, arresting of slippages, and better recoveries have aided the strong growth in net profit,” said Padmaja Chunduru, Managing Director and CEO of Indian Bank.

Interest income

Its interest income grew by 9.5 per cent at ₹5,138 crore (₹4,692 crore), while other income grew 58 per cent at ₹695 crore (₹440 crore) due to profit on sale of investment, recovery of bad debts, and PSLC (priority sector lending certificate) commission, among others.

However, net interest income fell marginally to ₹1,785 crore (₹1,807 crore) on the back of higher interest expenses, which stood at ₹3,352 crore (₹2,885 crore).

Its operating profit grew 6 per cent at ₹1,374 crore (₹1,298 crore). Provisions and contingencies were lower at ₹795 crore (₹1,030 crore). Despite the higher provision for taxes at ₹214 crore (₹59 crore), the net profit grew significantly.

Gross NPAs (GNPA) increased marginally to 7.33 per cent in this June quarter from 7.20 per cent in the June 2018 quarter and 7.11 per cent in March 2019 quarter. “GNPA ratio has increased slightly because of the denominator getting reduced – overall advances have come down and that added to the GNPA,” said Chunduru.

Fresh slippages

She said fresh slippages were lower at ₹1,035 crore in the June 2019 quarter, compared to ₹1,391 crore in the year-ago period. It will come down further by a couple of hundred crores in the coming quarters, she pointed out.

Net NPAs inched up marginally to 3.84 per cent from 3.79 per cent in the year-ago quarter and 3.75 per cent in the preceding quarter.

Total advances of the bank grew 12 per cent at ₹1,84,336 crore (1,64,381 crore). Of this, domestic advances grew 11.7 per cent at ₹176,558 crore (₹158,062 crore). This was primarily driven by RAM (retail, agriculture and MSME), which posted a growth of 20 per cent at ₹106,763 crore (₹89,222 crore). RAM makes up 60 per cent of the bank’s loan book now.

Corporate advances grew marginally to ₹69,796 crore (₹68,840 crore).

Return on assets grew to 0.52 per cent from 0.33 per cent in Q1 previous fiscal.

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