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Indian Bank records 66.7% decline in Q2 net at Rs 1.50 bn, income up 5.23%

Indian BankChennai-based public sector lender Indian Bank has posted a decline of 66.7 per cent in net profit at Rs 1.50 billion during the quarter ended September 30, 2018. Its net profit in the corresponding July-September quarter of 2017-18 stood at Rs 4.51 billion.
For the next few quarters, our major focus would be on arresting fresh slippages to improve the bottom line, said Padmaja Chunduru, MD & CEO, Indian Bank.The profit was down mainly due to a drop in market investment and in the recovery of written off accounts which dropped by Rs 370 million to Rs 290 million from Rs 660 million, said Chunduru.Profit on sale of investment was Rs 50 million during the September quarter as compared to Rs 2.62 billion last quarter.Provision coverage ratio (PCR) stood at 60.82 per cent during the September quarter against 64.38 per cent in June quarter and 65.40 per cent compared to the same period last year.Indian Bank’s total book grew by 14.28 per cent to reach around Rs 3.91 trillion in the September quarter (Q2). Deposits surged by 10.5 per cent o Rs 2.19 trillion, while advances were up by 19.5 per cent to Rs 1.72 trillion.Retail, Agriculture and MSME (RAM) contribution was at 58.7 per cent of the total advance book. “We would like to see this at 60 per cent and we will work towards it,” Padmaja Chunduru further added.The total income of the bank increased by 5.23 per cent to Rs 51.29 billion during the quarter (Q2), compared to Rs 48.74 billion during the corresponding quarter of the previous financial year.Gross Non-Performing Asset (NPA) rose to Rs 123.34 billion with a ratio of 7.16 per cent during the quarter, as against Rs 96.24 billion (6.67 per cent) during the corresponding quarter of FY18. The net NPA also rose to Rs 70.6 billion (4.23 per cent) as compared to Rs 47.48 billion (3.41 billion) registered a year ago.Fresh slippages during the quarter were at Rs 16.24 billion mainly due to three-four accounts in infrastructure.“Slippages are a major challenge and we will be focusing on this during the next few quarters,” Chunduru added.During H1FY19, the bank appropriated the recovery of Rs 946.1 million in a fully provided NPA account in accordance with the resolution plan approved vide order of the National Company Law Tribunal (NCLT). Based on a legal opinion obtained and pending issuance of the final order on the appeal filed, the amount recovered has been considered as part of NPA recovery.Over the next two quarters, the Indian Bank hopes to recover Rs 8.5 billion from NCLT referred accounts.“This we feel is a realistic target and we will be able to achieve it. My focus will be arresting the slippages in the initial stage itself,” she added.
Source: Business Standard