 "Indian Bank net profit drops 24%")
Total income stood at Rs 4,410.48 crore during the quarter ended March, as against a total income of Rs 4,234.83 crore registered during the same quarter, previous year, with a growth of 4.15 per cent.
Commenting on the reasons for the drop in net profit, T M Bhasin, managing director and chief executive officer, said, “Last year, we had Rs 110 crore of I-T (income tax) refund, which has come down to Rs 40 crore in 2014-15, which has seen an impact of Rs 70 crore. We have made about Rs 60 crore more provisions in the fourth quarter for the dynamic provision on the NPA (non-performing assets) front.”
The dynamic provisioning on NPA was Rs 611 crore during the fourth quarter, as compared to Rs 517 crore the previous quarter, he said. Operating profit saw a growth about 16.2 per cent to Rs 817 crore.
Gross NPA of the bank increased to Rs 5,870.44 crore (4.40 per cent of gross advances) from Rs 4,562.20 crore posted during the quarter ended March 31, 2014. Net NPA grew to Rs 3146.95 crore (2.50%) during the quarter, compared to Rs 2763.64 crore (2.26%) in the same quarter of previous year. The return on assets came down to 0.44%, compared to 0.60% registered during the same quarter last year.
NPA recovery was Rs 848 crore, which is 35% higher from the Rs 627 crore recovered previous year. The provision coverage ratio has improved to 60.08% during the quarter from 57% in December 31, 2014.
"We have seen a good growth in demand from MSME, agriculture and retail and we are also seeing greenshoots from infrastructure and industry, where demand from working capital has started coming. We hope that 2015-16, the disbursement and loan sanctions will be much larger than what we have seen in the last two years. If you see the banking industry data, the growth of credit has been 11% last year. This year we are expecting a growth of 15%," he said.
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During the year 2015-16, the focus will be on MSME, retail and agriculture and the bank. Around 15% is the target for growth in loan book for the year and the target for operating profit is to grow by 10%. Target for gross NPA is at 4 to 4.25% and in net NPA it would be between 2 to 2.25% of gross advances, he said.
The bank is healthy on the Basel III requirement and the capital adequacy ratio stands at 12.86%, he said. While he said that the bank has a headroom available for raising Rs 9833 crore in tier II bonds, he added that at present there is no need of fund raising and would look at it when need arise. The net interest margin is at 2.5%.
During the year, it has shed high cost deposits to the tune of Rs 8,820 crore, which has improved the bottomline of the bank. Cost of deposit has come down to 7.10% as on March 31, 2015, compared to 7.15% as on March 31, 2014. The bank has seen a growth of 23.55% in agricultrure disbursement, 12.05% in retail loans and 15.77% in MSME loan.
As against the cash recovery of over Rs 400 crore previous year, the bank has recovered Rs 562 crore in 2014-15. Last year the transfer of NPA to Asset Reconstruction Companies was Rs 673 crore, while in the fiscal year completed in March 31, 2015, it is Rs 1070 crore.
Indian Bank has opened about 13,3 lakh accounts under Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevanjyoti Bima Yojna (PMJBY). The government is holding around 82.5% of the shares in the bank. It has around 2409 branches and 2344 ATMs at present.
New products launched
The bank has launched new technology products on Thursday, an e-purse debit card, The Green Way Net Banking which offers instant activation and instant online creation of longin PIN for net banking, IB Smart Remote, an application to secure debit card through smartphone and IB D elite, an elite lounge for high networth individuals in its corporate office.