Indian Bank posts net profit of Rs 1,709 cr for Mar quarter

In the quarter ended March 2020, the amalgamated entity had reported a standalone net loss of Rs 1,641 crore. 

According to the filing to exchanges, the lender had reported a net loss of Rs 217.73 crore in the March 2020 quarter. 

The bank said this figure is of standalone Indian Bank financials of pre-amalgamation period and, hence, not comparable with post amalgamation financials of March 2021. 

For the full year 2020-21, its net profit stood at Rs 3,005 crore as against a loss of Rs 4,643 crore for 2019-20, the bank said in a statement. 

Speaking about the profitability, the bank's Managing Director and CEO Padmaja Chunduru said, ''There was an improvement in the interest income overall on a year-on-year basis and income from treasury operations. We had control over the interest expenses.'' Also, there was a component of deferred tax assets in the last quarter (Q4 FY21) of about Rs 900 crore, which helped take the net profit figure to around Rs 3,000 crore for the entire 2021-22, she said. 

Net interest income rose by one per cent in the January-March 2021 quarter to Rs 3,334 crore, from Rs 3,310 crore in a year ago. For 2020-21, it increased by 20 per cent year-on-year to Rs 15,666 crore. 

Domestic net interest margin (NIM) decreased 33 basis points (bps) to 2.34 per cent, compared with 2.67 per cent a year ago. For FY21, it improved by 12 bps y-o-y and stood at 2.85 per cent. 

The bank expects NIM to be above three per cent during FY22. 

Its asset quality improved with gross non-performing assets (GNPAs) at 9.85 per cent as against 11.39 per cent, and net NPA at 3.37 per cent compared to 4.19 per cent. 

Fresh slippages during the quarter was Rs 8,292 crore. Cash recovery stood at Rs 2,119 crore and the upgradation was Rs 116 crore. 

Slippage ratio was at 2.8 per cent and the bank expects it to improve the quarters to come, Chunduru said. 

Provisions and contingencies for the quarter were at Rs 839 crore as against Rs 4,042 crore for the corresponding quarter of previous year. 

She said all the banks have so far identified 22 bad loans to be transferred to the National Asset Reconstruction Company Ltd (NARCL). Of that, Indian Bank has exposure to eight accounts worth Rs 1,900 crore. 

For 2020-21, the bank's total capital adequacy ratio (CRAR) was at 15.71 per cent with 244 bps y-o-y increase. Tier-I CRAR was at 11.94 per cent in March 2021 against 10.40 per cent, up by 154 bps on year-on-year basis. 

Advances grew 6 per cent to Rs 3,90,317 crore in March 2021 over Rs 3,68,664 crore a year ago, driven primarily by 12 per cent growth in the RAM (retail, agriculture and MSME) sector. The retail sector grew 6 per cent, agriculture by 14 per cent and MSME by 15 per cent. 

''The corporate sector has been deleveraging itself and the appetite for new loans has been slightly less during the year (FY21),'' Chunduru said. 

In 2021-22, the bank expects that the corporates, maybe 2-3 months down the line, will start utilising the limits and also coming in for bigger limits. 

''The newly emerged Indian Bank, with the larger balance sheet available, is well placed to take exposure to well rated and strong companies with a proven track record,'' she added. 

Total deposits grew 10 per cent y-o-y to Rs 5,38,071 crore in March 2021 as compared to Rs 4,88,835 crore in the previous year. 

The bank's shares closed at Rs 142.6 apiece, up 1.13 per cent on the BSE on Friday.