Indian Bank Q2 net up 13%

State-run Indian Bank reported a 12.7 per cent increase in its net profit to Rs 469 crore for the second quarter ended September 30 2011, as against Rs 416 crore during the same period a year ago. Bank’s chairman and managing director TM Bhasin attributed the growth primarily to the increase in net interest income (NII) and non-interest income.

The bank’s total income rose to 20.6 per cent to Rs 2,02,590 crore, as compared with Rs 1,67,980 crore in during the corresponding quarter last year, while the NII grew 15.5 per cent on a year-on-year basis to Rs 1,135.4 crore.

Gross non-performing assets (NPAs) dipped 1.21 per cent from 1.29 per cent. In terms of quantum, the NPAs, however, increased to Rs 1,048 crore from Rs 904 crore.

Bhasin said the bank's cost of deposits rose to 6.60 per cent from 5.37 per cent, yield of advances to 12.07 per cent from 10.22 per cent, and yield of investments to 7.56 per cent as compared with 7.08 per cent during the same period last year. “This was mainly due to the inflation and the Reserve Bank of India’s recent measures, including increasing the rates,” he added.

The bank’s Tier-I capital was Rs 8,242.42 crore and Tier-II capital at Rs 1,948.06 crore as on September 2011. “There is a headroom available to raise Rs 6,300 crore via Tier-II bonds,” Bhasin, adding the bank’s net worth was currently over Rs 9,200 crore.

On the proposed follow-on public offer (FPO), he said, “The rates are not looking attractive. We may not go for it (an FPO) till March 31, 2012.”

Bhasin said the bank, at present, has 1924 branches and was planning to increase the network to 2,000 by the end of the current financial year. “We are planning to open 115 branches every year,” he added.