Centre gets meaty payout from Indian Bank

Net profit up 23.50% to Rs 504 crore, net NPA down to below 1%.

Ten years back, the Chennai-based Indian Bank posted the biggest ever net loss recorded by any bank at over Rs 1,600 crore which wiped out its entire net worth.

After a gap of 12 years, the unlisted bank is now in a position to pay 13.58 per cent dividend to its sole owner "� the government. In absolute terms, this amounts to Rs 101 crore, the highest dividend paid by this 100-year-old bank. The last time the bank had paid dividend was in 1992-93 "� Rs 50 lakh.

It also cut down its net non-performing assets to below one per cent. At one point of time, Indian Bank was running over 30 per cent NPAs in its books.

The bank reported a net profit of Rs 504.48 crore for 2005-06, recording a growth of 23.50 per cent over Rs 408.49 crore in 2004-05. Operating profit of the bank was Rs 893.65 crore for the year.

Since unlisted, the bank does not announce results quarterly, which is a must for all listed entities under the Securities and Exchange Board of India regulation.

KC Chakrabarty, chairman and managing director, Indian Bank, said the capital of the bank stood at Rs 743.82 crore after netting off accumulated losses, as permitted by the government. Its capital-to-risk asset ratio (CRAR) is now 13.19 per cent.

Total Income for the year rose to Rs 3,895.99 crore registering a growth of 13.27 per cent over Rs.3439.47 crore (2004-05) and interest income had increased by 17.20 per cent for the year.

Total deposits of the bank stood at Rs 40,805 crore as on March 31, 2006, up from Rs.34,808 crore a year ago, an increase of 17.23 per cent. Advances, on the other hand, rose by 22.33 per cent to Rs 22,485 crore from Rs.18,380 crore. Return on average assets improved to 1.16 per cent from 1.08 per cent.

Indian Bank's retail advances grew by 24 per cent to reach Rs 5,850 crore constituting 26 per cent of the bank's overall credit.

The bank effected NPA recovery of Rs 418.20 crore for the year against Rs 311.58 crore in 2004-05. Gross NPAs declined to Rs 669 crore from the level of Rs 748 crore and the ratio of gross NPAs to gross advances declined to 2.91 per cent from 3.96 per cent. Net NPA declined from 1.35 per cent to 0.79 per cent from 1.35 per cent.