Indian Bank Q1 net up 41% at ₹1,709 crore

Posted on by

Public sector lender Indian Bank maintained its all-around performance for the first quarter of this fiscal with significant growth in net profit, a reduction in NPAs and slippage, and double-digit growth in net interest income and credit offtake.

The Chennai-headquartered bank’s net profit grew 41 per cent to ₹1,709 crore in Q1 of this fiscal when compared with ₹1,213 crore in the year-ago quarter, driven by higher operating profit and net interest income and lower provisions.

The operating profit grew 16 per cent to ₹4,135 crore as against ₹3564 crore in the June 2022 quarter.

Interest income was higher at ₹13,049 crore (as against ₹10,154 crore in Q1 of FY23), an increase of 29 per cent. Net interest income reported an increase of 26 per cent at ₹5703 crore (as against ₹4534 crore). Total non-interest income grew 7 per cent to ₹1,710 crore as against ₹1,604 crore a year ago, driven by profit on the sale of investments, an increase in fee-based income, and others.

Total provisions were lower by 22 per cent at ₹1,741 crore (₹2,219 crore in Q1 of FY23). Fresh slippages were also lower at ₹1,153 crore (of which ₹775 crore was in the MSME segment, ₹433 crore in the retail segment, and ₹319 crore in the agriculture category). Slippages in the corporate segment were at ₹227 crore, mainly due to one major account (trading in the computer business). Cash recovery was higher at ₹929 crore (₹1,079 crore), while total recoveries (cash plus upgrades) stood at ₹2,008 crore.

Recoveries up

“Our recoveries continue to be 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 Shanti Lal Jain, MD and CEO of Indian Bank.

NPAs down

Gross NPAs (GNPA) declined to 5.47 per cent in Q1 of this fiscal from 5.95 per cent in the March 2023 quarter and 8.13 per cent in the June 2022 quarter. Net NPA dropped below 1 per cent and stood at 0.7 per cent, down from 0.9 per cent in the preceding quarter and 2.12 per cent in the year-ago quarter. The provisional coverage ratio stood at 95.10 per cent (88.08 per cent).

The cost-to-income ratio increased to ₹44.22 per cent from 41.94 per cent in the year-ago quarter.

Domestic advances grew 13 per cent to ₹4,50,634 crore (₹3,99,360 crore in Q1FY23). Retail, Agriculture, and MSME loans grew by 16 per cent (at ₹93,215 crore), 16 per cent (at ₹104,710 crore), and 7 per cent (at ₹78,510 crore) respectively. The three segments accounted for 61.34 per cent of gross domestic advances.

Total deposits grew 6 per cent at ₹6,21,539  crore when compared with ₹5,84,251 crore in Q1 of FY23. CASA grew 5 per cent at ₹2,50,242 crore and had a 40.3 per cent share.