NEW DELHI: Public sector lender Indian Bank has recorded a net profit of Rs 1,182 crore in the quarter ended June 30, 2021, marking a 220% jump from a profit of Rs 369 crore during the same quarter last year aided by a steady growth in interest income and lower operational expenses. Sequentially, however, net profit fell 31% from the March quarter.
“After successfully completing the amalgamation during the previous year, the bank is now reaping the synergy benefits. Since we have achieved this level despite the challenging environment, we expect this to be sustainable unless we are hit by further crisis,” said its Managing Director and CEO Padmaja Chunduru.
Net Interest Income (NII), the difference between interest earned and interest expended, grew 3% to Rs 3,994 crore during the quarter under review as compared to Rs 3,874 crore.
During the quarter, net revenue rose 13% to Rs 5,871 crore. Non-interest income grew 41% on a year-on-year basis on account of higher recovery in bad debts and rise in forex income.
Operating expenses contracted by 2% to Rs 2,399 crore in Q1 FY22 as against Rs 2,448 crore in the corresponding quarter of FY21, resulting in cost to income ratio of 40.86% as against 47.06% last year.
On the asset quality front, the state-run lender saw gross non-performing assets (GNPA) ratio improve 121 basis points to 9.69% of advances by the end of June quarter.
Net NPA fell 29 basis points to 3.47% during this period. Advances grew 6% to Rs 3,89,625 crore in Q1 FY22 over Rs 3,66,787 crore a year ago with retail, agriculture and MSME seeing a growth of 9%, 17% and 12% respectively. On a sequential basis, advances fell slightly by 0.2%.
“While we expect demand in corporate loans to improve going ahead, the MSME segment has turned out to be most vulnerable with more than 15% of the MSME loans becoming sticky,” said Chunduru.
Fresh slippages in the reporting quarter stood at Rs 4,204 crore, of which Rs 2,472 crore or nearly 60% came from the MSME sector alone. Retail, agriculture and corporate slippages stood at Rs 712 crore, Rs 379 crore and Rs 641 crore, respectively.
Stake in NARCL
The bank will pick up 9.9% stake in NARCL. it has identified 8 accounts worth Rs 1,900 cr to be transferred in the first phase.