Indian Bank’s Q1 net profit rises to Rs 369 crore
Chennai-based public sector lender Indian Bank on Friday reported a net profit of Rs 369 crore for the first quarter of FY21in the first combined balance sheet of the bank after the merger of the Allahabad Bank into itself. The net profit of the combined entity in the corresponding quarter of the previous fiscal stood at Rs 492 crore.
The amalgamation of Allahabad Bank came into effect on April 1, 2020. Accordingly, the combined financial as on June 30, 2019 has been arrived at by aggregation of audited numbers of combined figures of two banks, Indian Bank said.
Speaking to media persons through a virtual meeting, Padmaja Chunduru, MD & CEO, Indian Bank, said the bank has seen a very satisfying performance in the first quarter post amalgamation. The key parameters of income, cost efficiency and profitability have improved both Y-o-Y and Q –o-Q.
The asset quality has improved while the bank has made upfront provisions in two accounts and also contingency provisions for Covid-19. The accounts under moratorium constitute above 23%, and there is very good progress being made on the collection front, month on month.
Total income of the bank grew by 8% to Rs 11, 447 crore from Rs 10, 580 crore while net interest income grew by 17 % to Rs 3,874 crore as against Rs 3,316 crore. The other income increased by 19% to Rs 1,327 crore as against Rs 1,119 crore.
Gross NPA of the bank has improved to 10.90% from 12.09 % and net NPA improved to 3.76 % from 4.68 %. The provision coverage ratio was at 80.52 % as against 74.35%.
“Fresh slippages in Q1 were to the tune of Rs 523 crore and recovery was muted due to the pandemic situation. Recovery from NCLT accounts was also negligible. We can expect the NCLT recoveries by Q3 and Q4,” she said. The bank is expecting a recovery of Rs 2,000 crore from NCLT accounts and another Rs 2,000 crore from non-NCLT accounts this fiscal.
Chunduru said that the bank is looking at monetising the attached real estate properties of the defaulters. The bank has 21 properties and was in the process of selling those which will fetch decent income. The RAM (retail, agriculture and MSME) portfolio stood at 53% of the total loan book, and going forward, the bank’s focus would be both corporate and retail borrowers.
The domestic CASA deposits recorded a growth of 11 % with CASA share at 42% as against 40% in Q1 FY20. The capital adequacy ratio (CAR) as per Basel III guidelines was at 13.45 % as against regulatory requirement of 10.875%. Tier 1 CAR was at 10.47 % as against regulatory requirement of 8.875%. “The board has given nod to raise capital and we will do it at the appropriate time,” she said.
Chunduru said it is scouting for a strategic investor for its housing finance subsidiary Ind Bank Housing to revive its fortunes. The investor is expected to bring in domain expertise as well as the capital, she said.