Indian Bank Q1 net more than triples to Rs 1,182 cr, NIM up marginally

Bad loan recoveries helps to improve bottom-line

Public sector lender Indian Bank's net profit rose by 220 per cent to Rs 1,182 crore in the first quarter ended June 2021 (Q1FY22) on higher non-interest income.

It had posed net profit of Rs 369 crore during the same quarter last year (Q1FY21). Sequentially, the lender posted net profit of Rs 1,709 crore in the quarter ended March 2021 (Q4FY21).

The bank's net interest income rose marginally around three per cent in Q1FY22 to Rs 3,994 crore versus Rs 3,874 crore in Q1FY21. Net Interest Margin (NIM) for domestic operations improved by two basis points (bps) to 2.85 per cent for Q1FY22 as against 2.83 per cent for Q1FY21. On the other hand, NIM saw an improvement of 51 bps on a quarter on quarter sequential basis.

Its non-interest income in reporting quarter rose by 41 per cent to Rs 1,877 crore from Rs 1,327 crore in Q1FY21 on account of higher recovery in bad debts and rise in forex income. Sequentially, non-interest income rose by eight per cent from Rs 1,744 crore in January-March 2021 period (Q4FY21).

Padmaja Chunduru, managing director and chief executive of the bank said post amalgamation (of Allahabad Bank in April 2020), the synergy benefits are coming in terms of cost efficiencies resulting in cost to income ratio of 40.86 per cent as against 47.06 per cent in the previous year.

The bank's asset quality profile also improved with gross non-performing assets down to 9.69 per cent by June 2021-22 from 10.90 per cent during the same time last year. The net NPA also dipped to 3.47per cent during the quarter from 3.76per cent in April to June 2020-21. The loan loss provisions declined by five per cent to Rs 1,747 crore in Q1FY22.

The provision coverage ratio (PCR) was seen at 66.49 per cent for the quarter under review as against 68.09 per cent a year ago.

Advances grew by six per cent to Rs 389,625 crore in Q1FY22 over Rs 366,787 crore a year ago, primarily driven by growth in RAM sector (13 per cent) of which growth in retail, agriculture and MSME was 9 per cent, 17 per cent and 12 per cent respectively. On sequential basis, advances marginally declined by 0.2 per cent.

Its depoists grew by 10 per cent to Rs 5,40,082 crore in June 2021 from Rs 4,89,109 crore a year ago.

The bank’s total Capital Adequacy Ratio (CRAR) stood at 15.92 per cent in the quarter, up from 13.45 per cent last year.