'Indian Bank's net NPAs to vanish by March 2011'

State-owned Indian Bank, which has crossed a business of Rs 1.5 lakh crore, aimed to become a zero net non-performing asset (NPA) bank by March next year, its Chairman and Managing Director TM Bhasin said.

The task could be achieved with additional focus on recovery, he said, adding that “this (reduction in NPA) means double benefit — one is recovery of bad loans, another is recovery from technically written off accounts.”

He said this would result in improvement in bottom line. In case if there is 100 per cent provision against bad assets, whatever recovery would happen will become part of profit. As of December 2009, net NPA of the Chennai-based bank stood at 0.16 per cent of the total credit. During the first nine months of 2009-10, total NPA recovery was to the tune of Rs 471.07 crore.

As many as two other public sector banks, including Bank of Baroda, had net NPA of 0.1 per cent at the end of March 2009. Talking about business growth, Bhasin said the bank expected a loan growth of 20 per cent during the current financial year and expected total business to cross Rs 1.83 lakh crore by March 2011 against Rs 1.51 lakh crore at the end of March 2010.

Asked about deposit growth, he said liability should witness a growth of 19-20 per cent. During the first nine months of 2009-10, the bank has recorded a net profit of Rs 1,145 crore against Rs 851 crore in the same period in the previous year. However, the net interest margin (NIM) declined marginally to 3.62 per cent compared to 3.63 per cent in the nine months ended December 2008. Total Income of the bank improved by 17.42 per cent to Rs 6,713 crore from Rs 5,717 crore in the same period last year.