Indian Bank net soars 35 per cent to Rs 2,852 crore on lower NPAs, higher yields

The bank’s key net interest income increased 10 per cent to Rs 6,415 crore, the non-core or fee-based income grew 9 per cent Rs 931 crore.
Indian Bank Representative Image
Indian Bank Representative ImageFile Photo | EPS
Updated on
2 min read

MUMBAI: The Chennai-based public sector lender Indian Bank has reported a healthy 35% growth in net income at Rs 2,852 crore in the three months period ending December, as the bank earned more from its advances at a reduced cost of funds along with higher interest income. The bottom line was also boosted by a healthy reduction in the dud loans.

While the 118-year-old bank bps more in terms of yield on advances at 8.92% in the reporting period, up from 8.78% in the year-ago period, its cost-to-income ratio came down by 234 bps to 44.56.

The management led by chief executive Binod Kumar said the bank’s key net interest income increased 10% to Rs 6,415 crore, the non-core or fee-based income grew 9% to Rs 931 crore.

However, like many of its peers, the key profitability metric net interest margin declined by 8 bps to 3.57% as the cost of deposits has been heading north for long now.

Its total business grew 8% to Rs 12.61 trillion of which advances rose 10% to Rs 5.6 trillion led by RAM (retail, agriculture & MSME) advances grew 13% which together contributed 64.35% of the assets. Retail, agri & MSME advances grew by 16%, 13.5% and 8% respectively while home loans grew by 12%.

Total deposits increased 7% to Rs 7.02 trillion of which current, savings & Casa deposits grew 5%, 3.5%, and 4%, respectively. The Casa ratio stood at 40 and the credit-deposit ratio stood at 79.63.

Gross bad loans or NPAs came down by 121 bps to 3.26% from 4.47% while net NPAs declined by 32 bps to 0.21% from 0.53%. This had the bank improving the provision coverage ratio by 219 bps to 98.09. The slippage ratio also improved by 50 bps to 0.78%.

On a sequential basis too, the bank improved its asset quality with gross NPAs falling by 22 bps to 3.26% in December from 3.48% in the September quarter and the net NPAs falling by 6 bps to 0.21% in from 0.27% during this period.

This had the overall credit cost coming down by 18 bps to 0.47% from 0.65%.

Capital adequacy improved by 34 bps to 15.92% of which common equity capital improved by 91 bps to 13.27% and the core tier I capital improved by 89 bps to 13.77%. 

Related Stories

No stories found.

X
The New Indian Express
www.newindianexpress.com