Public sector Indian Bank’s improved performance for the year 2017-18 has been overshadowed by a spike in non-performing assets in Q4 on account of regulatory changes.

FY18 saw the Chennai-headquartered bank achieving double-digit growth in operating profit, net interest income and credit flow. It also managed to report a reduction in gross and net NPAs on a year-on-year basis.

Operating profit

It reported the highest-ever operating profit at ₹5,001 crore (₹4,001 crore in FY17), an increase of 25 per cent. Net interest income of the bank grew by 22 per cent at ₹6,264 crore (₹5,146 crore in FY17). Net interest margin grew by 31 bps at 2.90 per cent.

By the end of Q4 FY18, its gross NPA stood at 7.37 per cent, down from 7.47 per cent in the year-ago quarter, while net NPA declined by 58 bps to 3.81 per cent from 4.39 per cent. This is despite a jump in NPAs in Q4. Due to higher provisioning for the quarter ended March 31, 2018, the bank’s net profit fell 59 per cent at ₹132 crore (₹ 320 crore). Its net profit declined 10 per cent at ₹1,259 crore (₹1,406 crore in 2016-17) in FY18.

Kishor Kharat, Managing Director and CEO, said the fourth quarter performance was mainly on account of a circular issued by the RBI. The total slippages stood at ₹2,988 crore in Q4, of which, more than ₹1,700 crore was due to the circular. As the reservation scheme was withdrawn, the accounts that were under reservation had to be downgraded, and that led to higher provisions for the quarter, he said.

Gross domestic advances of the bank grew 24 per cent at ₹156,477 crore in FY18 (₹126,489 crore in FY17). This was primarily driven by RAM (retail, agriculture and MSME). Retail loans grew by 32 per cent at ₹27,335 crore. Agriculture and MSME segments grew by 26 per cent (₹31,242 crore) and 21 per cent (₹28,854 crore), respectively.

Related Topics
comment COMMENT NOW