 "Indian Bank net profit up 18%")
The bank’s total income increased to Rs 4,579 crore during the quarter under review from Rs 4,340 crore a year ago.
“The operational profit has increased sequentially. Depreciation retrieval is around Rs 100 crore. The provision on slippages came down even though the provision coverage ratio was increased as part of prudent banking activities,” said Mahesh Kumar Jain, managing director and CEO (additional charge), Indian Bank.
The gross non-performing assets (NPA) during the quarter ended September 30, 2015 was at Rs 5,773 crore (4.61 per cent of gross advances) against Rs 5,003 crore (4.21 per cent) in the corresponding quarter of FY15. The net NPA stood at Rs 3,188 crore (2.6 per cent) during the quarter under review compared to Rs 2,976 crore (2.55 per cent) in the same quarter a year ago. Return on assets on an annualised rate stood at 0.74 per cent, compared to 0.69 per cent.
Other income, which was dominated by treasury income, grew to Rs 437.47 crore from Rs 336.25 crore.
According to Jain, the bank has made a higher provisioning of 62 per cent as part of prudent banking approach. The provision coverage ratio was at 62.19 per cent as of the September 2015 quarter, compared to 60.9 per cent in the June 2015 quarter.
The bank recovered Rs 222.78 crore during the quarter. The total business of the bank stood at Rs 2,98,003 crore by the end of the second quarter, compared to Rs 2,84,080 crore during the same quarter a year ago. The capital adequacy ratio according to Basel-III stood at 12.58 per cent by the end of the quarter.
Slippages during the quarter was Rs 574 crore, compared with Rs 786 crore in the year-ago period. Slippages are contained through continuous efforts, Jain said. Big-ticket exposure is Rs 125 crore and major slippage is in the small loans, he added. Around Rs 160 crore was restructured during the quarter, of which Rs 115 crore was in the roads sector.
The central government is going to address the issues with the state discoms and this would help to address the significant share of state discoms in the restructured portfolio, he added. The Bank is consciously controlling the growth in corporate side of the business and increasing the retail business, he said.