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IndBank Q2 net up 164% to Rs 1,089 cr on surge in other income, recoveries

Gross NPAs come down to 9.56% form 9.89% a year ago; advances up 5%

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

State-run lender Indian Bank has posted a 164 per cent rise in net profit for the second quarter of the financial year ended September 2021 to Rs 1,089 crore as against Rs 412 crore during the same time last financial year.

The bank's net interest income declined marginally by about one per cent in Q2FY22 to Rs 4,084 crore from Rs 4,144 crore in Q2FY21. The Chennai-based bank’s net interest margin (NIM) (Domestic) was 2.89 per cent for Q2FY22 as against 3.06 per cent for Q2FY21. Operating profit during the quarter under review was Rs 3,276 crore, as against Rs 2,942 crore a year ago. “The increase in net profit is mainly due to a rise in other income and improved cash recovery,” said Shanti Lal Jain, managing director and chief executive officer of Indian Bank.

On the asset quality side, the bank’s gross non-performing assets stood at 9.56 per cent of gross advances as on September 2021, coming down from 9.89 per cent. The Net NPA ratio stood at 3.26 per cent as against 2.96 per cent in September 2020. Fresh slippages were lower at Rs 3,952 crore compared to Rs 4,204 crore in Q1 this fiscal. “Out of the slippages of Rs 3,952 crore, Rs 1,820 crore are on account of two SREI Group accounts. Around Rs 150 crore is from retail, Rs 983 crore from agriculture, Rs 746 crore from MSMEs and Rs 2,073 crore from corporate segments out of the total slippages,” Jain said. The company is targetting a recovery of around Rs 8,800 crore during the current fiscal, out of which around Rs 4,800 crore has been recovered so far. During the quarter, cash recovery was around Rs 831 crore and AUC recovery was at Rs 775 crore.

The bank's advanced grew 5 per cent to Rs 3,85,730 crore in Q2FY22 from Rs 365,896 crore a year ago, primarily driven by growth in RAM sector growth of 13 per cent – Retail, Agriculture and MSME at 14 per cent, 16 per cent and 8 per cent respectively. RAM constitutes 60 per cent of the total advances. Provisions and contingencies for Q2FY22 were seen at Rs 2,187 crore, as compared to Rs 2,530 crore for the corresponding quarter of previous year.

During the quarter under review, total deposits grew by 10 per cent to Rs 5,51,472 crore as against Rs 5,01,956 crore in September 2020. CASA deposits also increased by 8 per cent on a yearly basis to Rs 2,25,309 crore during the quarter. Share of CASA to total deposits was seen at 41 per cent in Q2. Current account deposits also grew by 14 per cent and savings account deposits by 8 per cent in Q2FY22.

The Chennai-based bank’s non-interest income for Q2FY22 was up by 26 per cent YoY and 8 per cent QoQ. It stood at Rs 1,966 crore as against Rs 1,558 crore in Q2FY21 on account of increase in recovery of bad debts (450 per cent) and forex income (42 per cent).