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Public sector lender Indian Bank has reported a 62 per cent rise in net profit to ₹247 crore for the quarter ended December 31, 2019 when compared with ₹152 crore in the year-ago quarter.
This impressive performance with a growth in income and profit and stable asset quality comes amid a big account turning bad.
“Our performance is in line with the expectations and there was a secular growth across all verticals. Our objective to grow the balance sheet is on track and balance sheet size crossed ₹3 trillion, while overall business crossed ₹4.5 trillion during the quarter. This is despite one of the big accounts slipping into NPA,” said Padmaja Chunduru, Managing Director & CEO, of the bank.
During the quarter, the bank had fresh slippages of ₹2,138 crore including ₹1,325 crore slippage of DHFL (Dewan Housing Finance) account, which was classified as NPA during the period.
Gross NPAs (GNPA) fell marginally to 7.20 per cent from 7.46 per cent in the December 2018 quarter. On a sequential basis, it was stable at the same level.
Net NPAs dropped to 3.50 per cent from 3.54 per cent in Q2 of this fiscal and 4.42 per cent in Q3 of previous fiscal.
Indian bank has witnessed a drop in NPAs every quarter from October-December 2018 period.
Incomes up
Its interest income grew 13 per cent to ₹5,467 crore (₹4,824 crore), while other income grew 133 per cent to ₹1,039 crore (₹445 crore), helped by growth in fee income and interest on an income tax refund, among others.
Net interest income increased by 14 per cent to ₹1,955 crore (₹1,717 crore).
Operating profit saw a robust growth of 67 per cent at ₹1,919 crore (₹1,147 crore). Provisions stood at ₹1,672 crore (₹994 crore), mainly due to higher NPA provisions.
Total advances of the bank grew 9 per cent at ₹1,92,658 crore (₹17,86,864 crore). Of this, domestic advances also grew 9 per cent at ₹1,84,362 crore (₹1,69,690 crore). This was primarily driven by RAM — retail, agriculture and MSME — which posted a growth of 18 per cent at ₹1,17,258 crore (₹99,604 crore). RAM makes up 64 per cent of the bank’s loan book now.
Corporate advances fell four per cent to ₹67,104 crore (₹70,086 crore). Return on assets grew to 0.33 per cent from 0.23 per cent in Q3 previous fiscal.
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