Indian Bank posts 74% growth in PBT at Rs 390.35 crore for Q3FY20

The performance was in line with expectations, Padmaja Chunduru, MD & CEO, Indian Bank said

Indian Bank on Friday reported pre-tax profit (PBT) of Rs 390.35 crore during the quarter ended December 31, 2019 (Q3FY20), a growth rate of 74.8 per cent over the Rs 223.36-crore PBT posted in Q3FY19.

Other income, led by fee and profit on sale of investments, helped the bank post good numbers, it said.

Net profit jumped 62 per cent to Rs 247 crore during the period, against Rs 152 crore in Q3FY19.

The state-owned bank’s total income grew 23.4 per cent to Rs 6,504.46 crore, against Rs 5269.74 crore in the corresponding quarter last year.

Padmaja Chunduru, the bank’s managing director and chief executive officer, said the lender has shown improvement on all the parameters and the quarter witnessed secular growth. Despite one big account turning non-performing asset (NPA), the bank managed to report good numbers, which was in line with expectations, she said.

Gross NPA as a percentage of gross advances came down to 7.21 per cent during the quarter, from 7.48 per cent in the corresponding quarter last year. Net NPA as a percentage also came down to 3.5 per cent compared to 4.42 per cent in Q3FY19. 

Provisions and contingencies for Q3FY20 was Rs 1,672 crore mainly because of higher provisions towards NPAs as against Rs 994 crore for Q3FY19.

Through a letter dated November 13 last year, the lender received in-principle approval from the central government’s Alternative Mechanism to the proposed amalgamation of Allahabad Bank into it with Indian Bank as transferee bank and Allahabad Bank as the transferor.

“We expect the amalgamation to get over by March 2020 and it will be one of the most successful mergers in the Indian bank industry,” she said.

The bank kept Rs 1,004 crore for divergence in provisioning and also re-classified three standard accounts amounting to Rs 184 crore as fresh NPA. It provided Rs 200 crore towards the DHFL account, while divergence was Rs 711 crore.

During Q2FY20, it received Rs 2,534 crore from the government towards preferential allotment of equity shares and it has executed the allotment of shares.

The banks expects to recover around Rs 700-800 crore from two or three big accounts through the NCLT route in the next two or three quarters.