Indian Bank posts 41% increase in Q1 net profit at ₹2,403 crore

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Indian Bank has recorded strong growth in its net profit for the June quarter, aided by an increase in operating profit on the back of a rise in interest and non-interest incomes and lower provisions. Its asset quality also witnessed improvement during the period.

The Chennai-headquartered bank’s net profit grew 41 per cent to ₹2,403 crore in Q1  compared with ₹1,709 crore in the year-ago quarter. Operating profit was 9 per cent higher at ₹4,502 crore (₹4,135 crore) 

Interest income grew 15 per cent to ₹15,039 crore (₹13,049 crore). Net interest income reported an increase of 8 per cent at ₹6,178 crore ( ₹5,703 crore). Total non-interest income grew 11 per cent to ₹1,906 crore against ₹1,710 crore a year–ago, driven by fee income and recovery of bad debts.

As a result of an increase in profitability, return on assets increased to 1.20 per cent against 0.95 per cent, said SL Jain, MD & CEO.

Fresh slippages lower

Total provisions were 13 per cent lower at ₹2,099 crore (₹2,426 crore). Fresh slippages were also lower at ₹1,928 crore (₹1,753 crore), of which the MSME segment accounted for a higher number at ₹909 crore, followed by agriculture at ₹597 crore and retail at ₹422 crore. No slippages were reported in the corporate segment during the quarter. Total recoveries (cash plus upgradations) stood at ₹1,937 crore (₹2,008 crore).

Recoveries remain higher than slippages. We have set a target to recover ₹2,000 crore per quarter in this fiscal. Also, the slippage ratio has been coming down 1.57 per cent in Q1 of this fiscal, down from 2.43 per cent in Q4FY23 and 3.03 per cent in Q1FY23, said Jain. 

Gross NPAs declined to 3.77 per cent in Q1  from 3.91 per cent in the March 2024 quarter and 5.47 per cent in the June 2023 quarter. Net NPA remained below 1 per cent and stood at 0.39 per cent, down from 0.43 per cent in the preceding quarter and 0.70 per cent in the year-ago quarter.

The cost-to-income ratio increased to 44.31 per cent from 44.22 per cent in the year-ago quarter.

Domestic advances grew 12 per cent to ₹5,02,618 crore (₹4,50,634 crore). Retail, agriculture and MSME loans grew 14 per cent (at ₹1,06,091 crore), 18 per cent (at ₹1,23,849 crore), and 6 per cent (at ₹83,361 crore) respectively. The three segments accounted for 62.33 per cent (61.34 per cent in Q1FY24) of gross domestic advances.

Total deposits grew 10 per cent at ₹6,81,183 crore compared with ₹6,21,539  crore. CASA grew 6 per cent at ₹2,65,865 crore and had a 39.03 per cent share. Its CD ratio was 79.15 per cent in the June 2024 quarter.