Indian Bank posts 36% rise in Q2 net at ₹2,707 crore on the back of reduced slippages

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Indian Bank, a public sector lender, reported strong double-digit growth in profits for the September quarter, alongside high single-digit growth in net income, improved asset quality and a reduction in fresh slippages. The Chennai-based bank’s credit off-take increased in the low double-digits, while deposits grew in the high single-digits. Total business rose 10 per cent year on year, reaching ₹12.44 lakh crore as of September 30, 2024.

The bank’s net profit surged 36per cent to ₹2,707 crore, compared with ₹1,998 crore in the September 2023 quarter. This growth was driven by higher operating profit and lower provisions, supported by an increase in net interest income.

For the first half of the fiscal, the bank’s net profit exceeded ₹5,000 crore, totalling ₹5,110 crore (₹3,697 crore).

Operating profit rose 10 per cent to ₹4,728 crore (₹4,303 crore), with net interest income increasing 8 per cent to ₹6,194 crore (₹5,741 crore). Similarly, net interest income for the half-year period grew 8 per cent to ₹12,372 crore (₹11,444 crore).

Credit growth

“All segments of credit saw nearly double-digit growth, contributing to our overall business expansion and profitability,” said S L Jain, Managing Director and CEO, Indian Bank.

Interest income rose 12 per cent to ₹15,348 crore (₹13,744 crore), while non-interest income increased 22 per cent to ₹2,422 crore (₹1,993 crore). Provisions (excluding taxes) decreased 29per cent to ₹1,098 crore (₹1,551 crore).

Fresh slippages were significantly lower at ₹1,357 crore (₹1,976 crore) and ₹1,928 crore in the previous quarter. Of the total slippages this quarter, the agriculture sector accounted for the largest share at ₹681 crore (₹720 crore in Q2 FY24), followed by MSME at ₹308 crore, Corporate at ₹238 crore, and retail at ₹130 crore.

Total recoveries (cash and upgrades) slightly decreased to ₹2,021 crore (₹2,265 crore).

Asset quality

The bank has made notable improvements in its asset quality, with gross NPA declining to 3.48 per cent in the September 2024 quarter (4.97 per cent a year earlier and 3.77 per cent in the June 2024 quarter). Net NPA also fell to 0.27 per cent (0.6 per cent in the year-ago quarter and 0.39 per cent in the preceding quarter).

Domestic advances rose 12 per cent to ₹5,13,318 crore this Q2 (₹4,58,681 crore). Retail, agriculture and MSME loans increased 15 per cent to ₹1,10,049 crore, 16 per cent to ₹1,28,272 crore, and 8 per cent to ₹86,729 crore, respectively. These three segments accounted for 63.32 per cent of the gross domestic loans (62.33 per cent). Corporate loans rose 9 per cent to ₹1,88,268 crore.

Domestic deposits grew 7 per cent to ₹6,64,291 crore (₹6,19,969 crore), while CASA increased 5 per cent to ₹2,69,359 crore, although its share slipped to 40.47 per cent (41.37 per cent).