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Indian Bank net drops 7%

To raise $350 mn through Medium Term Note and another Rs 1,200 cr for capital requirment

BS Reporter  |  Chennai 

Indian Bank has posted a drop of 7.13 per cent in net profit for the quarter ended March 31 to Rs 271 crore, against Rs 292 crore in the corresponding period of the of previous financial year. The total income stood at Rs 4,235 crore for the quarter, compared with Rs 4,022 crore during the corresponding quarter of previous financial year, an increase of 5.28 per cent. The percentage of gross non-performing assets had gone up from 3.33 per cent at Rs 3,565 crore for quarter ended March 31, to 3.67 per cent at Rs 4,562 crore for the quarter this year. Following a Reserve Bank of India directive, the bank utilised a sum of Rs 46.06 crore from floating provisions towards specific provision for non-performing assets. During the quarter, the Government of India converted its entire perpetual non-cumulative preference shares of Rs 4,00 crore into 3,50,78,488 equity shares of Rs 10 each at a conversion price of Rs 114.03, including premium, per share. With this, the Government of India's holding in the Bank's equity capital has increased from 80 per cent to 81.51 per cent. The provision for NPA and bad loans has increased 21.15 per cent from Rs 952.98 crore during 2012-13, whereas it was Rs 1,154.57 crore for the year ended March 31, 2014. The NPA recovery for the year was at Rs 625 crore for year ended March, 2014 as against Rs 653 crore for the previous year. It has also sold around Rs 674 crore of its NPA to the Asset Reconstruction The slippage for the quarter ended March 2014 was Rs 1309 crore, while it was Rs 1306 crore during the previous fiscal year, he said. The Bank's total business for the year stood at Rs 2,86,633 crore with an increase of 15.1 per cent and the total deposit was at Rs 1,62,275 crore while the advances were at Rs 1,24,359 crore. The net interest margin was at 2.60 during the year compared to 3.09 during the previous year. To raise funds and MTN The Bank is expected to raise $350 million through Medium Term Note (MTN) and another Rs 1,200 crore for capital requirment.

"We have started talking to raise the MTN to serve our customers overseas.

We are also looking at another Rs 1,200 crore for capital requirement for the current fiscal," Bhasin told Business Standard. It has three branches overseas, including in Singapore and Columbo. Besides it is also looking at opening a branch in Hongkong.

The Bank would be submitting a demand for Rs 1,000 crore with the Central government, and the rest of the money would be raised from the market. It may be noted that the Bank claims that it has not raised funds from the central government for the past seven years.

The current fiscal year is expected to be a better year compared to the past two years, said Bhasin to the reporters while announcing the financial The Gross Domestic Product (GDP) growth is expected to be higher for the current fiscal year and the Bank is expecting a growth OF 18% in deposit during the year, he added.

First Published: Tue, May 13 2014. 00:12 IST