Indian Bank profit rises 21% to ₹372.4 cr
MUMBAI Indian Bank on Friday reported a 21.16% increase in June-quarter net profit on the back of higher net interest income (NII).
The lender posted a net profit of ₹372.4 crore compared to ₹307.35 crore a year ago.
NII, the core income a bank earns from its lending business, rose 1.87% to ₹1,259.48 crore. Noninterest income—which includes fees and commissions, and treasury income—jumped 47.63% to ₹652.07 crore.
NII growth was fuelled by a growth in loans, particularly in the non-corporate book as well as an improvement in the net interest margin, which rose to 2.79% from 2.52% a year ago.
“In the past few quarters, business growth was controlled for the sake of consolidation and qualitative improvement,” said Kishor Kharat, managing director and chief executive officer of Indian Bank.
While Indian Bank’s overall loan book grew 4.99% from a year ago, credit to retail, agriculture and small firms grew by 14%.
Retail lending constitutes 51.25% of advances now as compared to 49.25% in the June 2016 quarter.
The asset quality picture was mixed. The stock of bad loans fell on a sequential basis but it rose as compared to the previous year.
At the end of June, gross nonperforming assets (NPAs) stood at ₹9,653.01 crore, down 2.2% from the March quarter. However, it was 8.53% higher from a year ago.
As a percentage of total loans, gross NPAs stood at 7.21%, as against 7.47% reported in the previous quarter.
The lender’s provisions—the money kept aside to cover for loans—rose 71.6% from a year ago to ₹715.55 crore in the June quarter.
Kharat said that Indian Bank has a total exposure of ₹2,800 crore to eight of the 12 accounts identified by the Reserve Bank of India for insolvency proceedings.
The bank had decided to sell bad loan portfolio of ₹535 crore to asset reconstruction companies in the July-September quarter, he added.
The Indian Bank stock closed at ₹328.85 on BSE, down 0.48% The Sensex rose 0.39% to 32,028.89 points.