Indian Bank's profit dips 38%

Total income registers growth of 8% to Rs 4,078 cr

Pubic sector lender Indian Bank Ltd posted a drop of 38.4 per cent in net profit at Rs 305.76 crore for the quarter ended September 30, as against Rs 496.68 crore for the corresponding quarter last financial year.

The total income rose at 8.07 per cent to Rs 4078.24 crore for the quarter as compared to Rs 3773.75 crore for the corresponding quarter of previous financial year.

The dip in net profit was due to the decrease in earnings from profit on sale of investments, which was at Rs 11 crore for the quarter ended September 30, said Indian Bank CMD T M Bhasin. He said the bank has seen a sale of investment of Rs 314 crore during the first quarter of the current financial year, while it was lower in the second quarter, as the market condition was not favourable.

The bank has recovered around Rs 410 crore of non-performing assets (NPAs), said Bhasin.

The percentage of gross NPAs has increased from Rs 1,979.76 crore (2.06 per cent) during the quarter ended September 30, 2012 to Rs 4,179.32 crore (3.76 per cent) for the quarter ended September this year.

The net NPAs has seen an increase from Rs 1,260.12 crore (1.33 per cent) during quarter ended September last year to Rs 2,803.92 crore (2.56 per cent) for the corresponding quarter this year.

The total deposit of the company stood at Rs 1,52,687 crore, while the advances were at Rs 1,11,071 crore. The micro, small and medium entreprises business of the Bank has grown to Rs 14,906 crore, he added. The net interest margin (NIM) was at 2.68 per cent.

Vaibhav Agrawal, VP (research and banking), Angel Broking, said, though Indian Bank reported moderate operating performance on expected lines, asset quality witnessed continued pressures.

“The operating profit came in line with 22 per cent year-on-year (yoy) decline on back of 15 per cent yoy higher operating expenses and on the asset quality front, the bank witnessed continued pressure, as absolute gross and net NPAs have both more than doubled over the last one year, while on a sequential basis they rose by 13 per cent each,” he said.

“Provisioning expenses unexpectedly reduced by 39 per cent quarter-on-quarter at Rs 225 crore, of which Rs 89 crore was for investment depreciation. Overall net profit for the bank declined, for the fourth consecutive quarter, by 38 per cent year over year to Rs 306 crore,” he added.

The bank has 2,131 branches and 1,607 ATMs. It plans to open 108 more branches within the country and three outside.

“The bank has not been raising fund from the government for the past five years and was able to manage the business with the net profit it gets,” he said.