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Indian Bank posts 220% jump in Q1 net profit to Rs 1,182 crore

The lender had reported a net profit of Rs 369 crore on a standalone basis in the quarter ended June 2020.

July 19, 2021 / 07:57 PM IST
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State-owned Indian Bank reported a 220 percent jump in its standalone net profit to Rs 1,182 crore for the quarter ended June 2021, helped by a steady growth in interest income and control over expenses.

The lender had reported a net profit of Rs 369 crore on a standalone basis in the quarter ended June 2020.

The bank had amalgamated Allahabad Bank with itself with effect from April 1, 2020.

"The factors which led to profit during the quarter were control over interest expenses, maintaining interest income and also due growth in non-interest income."

"The synergies of the amalgamation also helped us in reducing the cost of funds,” the bank’s Managing Director and CEO Padmaja Chunduru told reporters on Monday.

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Net interest income (NII) grew three percent year-on-year to Rs 3,994 crore in Q1FY22, from Rs 3,874 crore in the year-ago quarter.

Non-interest income was up 41 percent to Rs 1,877 crore, against Rs 1,327 crore.

The rise was on account of higher recovery in bad debts and an increase in foreign exchange (forex) income, the bank said in a statement.

Domestic net interest margin (NIM) improved by 51 basis points (bps) to 2.85 percent in the first quarter of the current fiscal, against 2.83 percent for Q1 FY21.

Gross non-performing assets (GNPAs) improved to 9.69 percent from 10.90 percent.

Net NPAs stood at 3.47 percent as compared with 3.76 percent.

Fresh slippages in the reporting quarter stood at Rs 4,204 crore.

Cash recovery stood at Rs 657 crore and upgradation at Rs 1,647 crore, according to the bank’s investor presentation.

Chunduru said the lender has kept a recovery target of Rs 5,000 crore during FY22.

Provisions and contingencies for Q1 FY22 stood at Rs 2,290 crore as against Rs 2,384 crore for the corresponding quarter of previous year.

Total capital adequacy ratio (CRAR) was increased by 247 bps to 15.92 percent.

Advances grew six percent to Rs 3,89,625 crore in Q1 FY22 over Rs 3,66,787 crore a year ago.

Total deposits grew 10 percent to Rs 5,40,082 crore as on June 2021 as against Rs 4,89,109 crore in June 2020.

Chunduru expects demand in corporate loans to improve going ahead.

The lender has a corporate loan pipeline of Rs 20,000 crore which will be disbursed in third and the fourth quarter of the current fiscal.

She said the bank has identified eight accounts worth Rs 1,900 crore to be transferred to National Asset Reconstruction Company Ltd (NARCL), in the first phase.

The lender has taken board approval to buy a stake of 9.9 percent in NARCL, she added.

In the past one year, the lender has rationalised 230 branches and is looking to rationalise 70 more branches during this fiscal, Chunduru said.

The bank’s scrip closed at Rs 139.25 apiece, up 0.80 percent on the BSE.
PTI
first published: Jul 19, 2021 07:56 pm

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