Indian Bank Q2 net profit more than double

Indian Bank said its second quarter net profit more than doubled on higher other income and a decline in provisioning.

The bank posted a net profit of ?358.56 crore for the three months ended 30 September compared with ?150.14 crore in the year-ago period. Profit was higher than the Bloomberg poll of five analysts, which had estimated a loss of ?328.10 crore.

Other income, which includes core fee income, rose 72.22% to ?737.65 crore in the three months from ?428.32 crore a year ago.

Provisions during the quarter decreased 9.46% to ?909.37 crore as against ?1004.34 crore in the yearago quarter. In Apr-Jun, the bank had set aside ?794.82 crore in provisions.

Net interest income, or the difference between interest earned on loans and that paid on deposits, increased 7.63% to ?1863.04 crore from ?1730.93 crore in the corresponding period last year.

Gross non-performing assets (NPA), as a percentage of total advances, were at 7.2% in the September quarter compared with 7.33% in the June quarter and 7.16% in the year-ago quarter.

Post provision, the net NPA ratio was at 3.54% against 3.84% in the Apr-Jun quarter and 4.23% in the yearago quarter. Shares of the bank closed 13% higher at Rs142.90 apiece on the BSE, while the benchmark Sensex index gained 0.2% at 39058 points.

Meanwhile, India's stateowned Oriental Bank of Commerce (OBC) posted net profit of Rs125.9 crore in the quarter-ended September, up 23% year-on-year, as fewer new loan accounts turned bad and on account of a rise in net interest margin. It had reported a profit of Rs112.7 crore in April-June quarter.

OBC's interest income grew 13.9% year-on-year to Rs4,878 crore in the three months ended September. Gross non-performing assets (NPA) declined 471 basis points (bps) year-on-year to 12.53% in the September quarter, while net NPA fell 413 bps to 5.94%, the bank said in a filing with the exchanges. Bad loans declined due to lower fresh slippages.

The lender's net interest income grew 14.7% to Rs1,456 crore. Its net interest margin-a key measure of profitability-grew 6 bps year-onyear to 2.62%. OBC's provisioning coverage ratio (PCR) increased to 77.13% as of September-end, up 11.8 percentage points from a year ago. PCR is the amount set aside to cover NPAs.