Indian Bank disappoints in Q4, net down 21% at Rs 345 cr

Moneycontrol Bureau

Chennai-based public sector lender Indian Bank's fourth quarter (Jan-March) net profit moderated  by 21% year-on-year to Rs 345 crore due to higher provisions on bad loans.
Net interest income or the difference between interest earned and paid out dropped 25% to Rs 1,083 crore.
The Q4 numbers dissapointed the market. Analysts on average had expected net profit of Rs 511 crore and NII at Rs 1,210 crore. Indian Bank shares tumbled nearly 7% to Rs 182 crore.
During the quarter, provisions increased sharply to Rs 562 crore from Rs 127 crore during the same period in the previous year. Significant deterioration in asset quality led to the spurt in loan provisions.  
Gross non-performing asset ratio increased to 2.03% versus 1.35% and net NPA ratio too jumped at 1.33% versus 0.80% quarter-on-quarter.
In 2011, the Reserve Bank of India raised provisioning requirment norms from 10% to 15% on non-performing loans classified as sub-standard assets.
Capital adequacy ratio declined at 13.47% in Q4, FY12 versus 13.56% a year ago.