Indian Bank net profit up 34% to Rs 690 crore
Chennai: Driven by rising other income, Indian Bank saw its net profit increase by 34% to Rs 690 crore in the quarter ended December 2021, compared to the corresponding period last year. This is despite a higher provisioning of 21% year-on-year made against bad debts by the PSU bank, at Rs 2,493 crore.
Its net interest income grew by 2% year-on-year to Rs 4,395 crore. While non-interest revenue grew 36% in the December quarter on an annual basis, other segments also saw higher growth – commission revenue at 11%, foreign exchange revenue at 32% , PSLC commission at 47% and collection of bad debts at 111%.
Its asset quality improved quarter-on-quarter, gross non-performing assets declined from 9.56% in September 2021 to 9.13% in December 2021. Net NPA improved to 2.72% against 3.26% during the same period.
“We are planning to transfer five NPA accounts worth Rs 1,300 crore to the wrong bank. Thanks to the resolution of NCLT and in the process of being liquidated, we recovered Rs 229 crore from 38 accounts in the third quarter,” said Shanti Lal Jain, Managing Director and CEO of Indian Bank. Through this, the bank recovered Rs 985 crore this financial year from 102 accounts.
It saw further slippages of Rs 2,732 crore, while cash recovery from bad debt stood at Rs 1,096 crore. “We have seen higher stress among MSME borrowers over the last quarter,” Jain added.
Total advances increased by 3% year-on-year to reach Rs four lakh crore in December 2021, and up 4% on a sequential basis. Its loan advance growth was driven by the retail sector at 13%, which was driven by personal loan growth of 36% and jewelry loan growth of 43%.
Total deposits increased by 8% year-on-year to Rs 5.62 lakh crore in the December quarter. Its CASA ratio improved by 80 bps YoY to 42%. CASA deposits grew 10% year-on-year, driven by current account growth 15% higher than savings account deposit growth of 9%. Term deposits increased by 6% year-on-year.
Its solvency ratio stands comfortably at 15.47%, above the regulatory requirement of 15.11%. During the nine months ended 31 December 2021, the Bank raised equity of Rs 1,650 crore through placement in Qualified Institutions (QIP) at an issue price of Rs 142.15 per share .