Indian Bank net down, to recover Rs 850 cr from NCLT accounts

Padmaja Chunduru, MD-CEO, said higher provisioning for bad loans, mark-to-market losses and lower trading income resulted in Indian Bank’s net profit going down to Rs 150.14 crore for the second quarter. Announcing the bank’s Q2 results Chunduru told the media Rs 250 crore was expected to be realised during the third quarter and Rs 600 crore during the fourth quarter of the current fiscal. “The amounts expected to be realised are realistic,” she said.

The bank posted a net profit of about Rs 150.14 crore for the second quarter of the current fiscal down from Rs 451.55 crore posted during the previous year’s corresponding period, according to Chunduru.

“No doubt it is a challenging phase. The recovery is expected to pan out in two to three quarters.” She said the bank had earned a total income of Rs 5,129.16 crore for the quarter that ended on September 30 up from Rs 4,874.15 crore earned for the quarter ended on September 30, 2017.

The total provisions for the second quarter was Rs 1,040.90 crore as against Rs 924.25 crore for the previous year corresponding period.

The provision for loan loss for the period under review was Rs 752.48 crore, up from Rs 633.36 crore for the previous year corresponding period.

Indian Bank’s gross non-performance asset (GNPA) and net NPA stood at Rs 12,334 crore and Rs 7,060 crore as on September 30.

Indian Bank, which has lent over Rs 1,800 crore to Infrastructure Leasing and Financial Services Ltd (IL and FS), said most of its loans to the crisis-hit company were ‘good’. “The bank’s exposure to IL and FS is Rs 1,809 crore. Out of the 10 loan accounts, six are for special purpose vehicles (SPV of IL and FS) whose revenues are ring-fenced with an escrow account,” Chunduru said.

She said one account had turned bad three years ago and that the state-run lender had made necessary provisions. One loan of Rs 172 crore slipped into the non-performing category recently.

Chunduru said two more loan accounts totalling about Rs 130 crore were under the watch list.

Indian Bank’s total exposure to the non-banking finance companies is Rs 20,477 crore, accounting for 12.40 per cent of its gross advances as of September 30.