Indian Bank Q3 net falls 20% on low NII but NPA improves

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26 Aug, 2025 12:21

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Moneycontrol Bureau

State-run Indian Bank's third quarter year-on-year net profit dropped 20 percent on account of depreciation on its AFS portfolio, lower net interest income and fall in provisions, but the asset quality improved sequentially.

Net profit declined to Rs 264.5 crore in the quarter ended December 2013 from Rs 330.58 crore in a year ago period while net interest income slipped 4.75 percent year-on-year to Rs 1,090.6 crore during the same period.

Asset quality

Gross non-performing assets (NPAs) fell 34 basis points quarter-on-quarter (up 24 bps year-on-year) to 3.42 percent and net NPAs slipped 31 bps sequentially (up 8 bps Y-o-Y) to 2.25 percent in the quarter gone by.

In absolute term, gross NPAs dipped 8 percent Q-o-Q (up 20.6 percent Y-o-Y) to Rs 3,834.78 crore and net NPAs stood at Rs 2,483.6 crore, down 11.4 percent Q-o-Q and up 16 percent compared to a year ago period.

During the quarter, the bank assigned non-performing financial assets aggregating to Rs 389.97 crore to asset reconstruction companies for a consideration of Rs 675.71 crore. But the surplus of Rs 285.74 crore from this sale is not accounted in profit and loss account by the bank.

Provisions and contingencies dropped 42 percent (up 5.7 percent quarter-on-quarter) to Rs 237.9 crore during October-December quarter as against Rs 411.6 crore in corresponding quarter of last fiscal.

Provision coverage ratio stood at 57.99 percent as on December 31, 2013.

Depreciation on AFS portfolio

For the current financial year 2013-14, the bank has net depreciation of Rs 181.57 crore on its entire available for sale (AFS) or held for trading (HFT) investments portfolio. Out of which the bank has recognised Rs 47.62 crore in the profit and loss for the December quarter, in addition to Rs 88.82 crore crore provided during the September quarter.

RBI on August 23 asked banks to distribute the net depreciation of the entire AFS / HFT portfolios on each of the valuation dates in the current financial year.

Capital adequacy ratio (as per Basel III norms) stood at 12.49 percent in the quarter gone by versus 12.82 percent in previous quarter.

During the quarter, other income increased to Rs 242.6 crore from Rs 238.8 crore while tax expenses jumped to Rs 129.8 crore from Rs 58.9 crore year-on-year.

At 13:39 hours IST, the stock rallied 4 percent to Rs 110.65 amid large volumes on the BSE.