Money & Banking

Indian Bank registers ₹369 crore profit in Q1

Chennai | Updated on August 14, 2020

Public sector lender Indian Bank announced its first quarterly performance after amalgamation and announced a net profit of ₹369 crore for the quarter ended June 30, 2020. The amalgamation of Allahabad Bank came into effect on April 1.

In the year-ago quarter, the net profit (arrived at by aggregation of audited numbers of combined figures of two banks) of the combined entity was ₹492 crore. On a comparative basis, net profit was down 25 per cent. Operating profit of Indian Bank grew 23 per cent ₹2,753 crore in Q1 of this fiscal when compared with ₹2,234 crore in the year-ago quarter.

Total income grew by 8 per cent at ₹11,447 crore (₹10,580 crore). Net interest income was higher by 17 per cent to ₹3,874 crore against ₹3,316 crore). Other income was also higher by 19 per cent to ₹1,327 crore (₹1,119 crore).

Wage settlement

Staff expenses were higher by 24 per cent at ₹1,654 crore due to ₹250 crore provision on account of wage settlement.

“It’s a very satisfying performance in the first quarter post amalgamation. We were determined to announce the results of Amalgamated Bank on time. All key parameters such as income, cost efficiency and profitability have improved both y-o-y and q–o-q. Asset quality has improved,” said Padmaja Chunduru MD and CEO, Indian Bank.

The bank has made upfront provisions in two bad accounts and also contingency provisions for Covid.

While total provisions were 37 per cent higher at ₹2,384 crore (₹1,741 crore in Q1 of FY20), loan-loss provisions (100 per cent) in respect of two accounts amounted to ₹1,133 crore in Q1 of this fiscal.

Fresh slippages were lower at ₹523 crore (in corporate category) against ₹3,998 crore in Q1 of FY20.

Gross NPAs (GNPA) stood at 10.90 per cent in Q1 of this fiscal, down from 11.39 per cent in March 2020 quarter. Net NPA was at 3.76 per cent, down from 4.19 per cent in the preceding quarter.

Domestic advances grew 6 per cent ₹357,869 crore, driven by growth in retail (11 per cent). Agriculture and MSME grew by 3 per cent each. Overseas advances declined by 14 per cent.

The accounts under moratorium constituted above 23 per cent, and the bank said there was good progress being made on the collection front, month on month.

“The amalgamation is going on track and we expect to complete it in the current financial year,” she said.

Allahabad Bank had accumulated losses of ₹19,000 crore when Indian Bank took over as on April 1, 2020. “The losses will keep coming down going forward,” said Chunduru.

 

Published on August 14, 2020

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