
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%.