Indian Bank profit drops by 84% in Q3

Bank attributes the fall to higher provisional coverage

Indian Bank has reported a 84.75% drop in its net profit at Rs 42.30 crore during the third quarter as compared to Rs 277.52 crore during the same period last year.

The bank has attributed the reduction in net profit to higher provisioning towards bad assets.

Total income of the bank for the quarter stood at Rs 4,438.40 crore as compared to Rs 4,321.46 crore.

Mahesh Kumar Jain, managing director & CEO, Indian Bank, told reporters that higher provisioning has taken a toll on the bottom line of the bank.

"We have provisioned close to Rs 200 crore more this quarter than second quarter and this coupled with fresh slippage to the tune of Rs 1,738 crore to bad assets, had resulted in drop in net profit. The bank had provisioned Rs 718.05 crore in third quarter, towards sticky assets," he said.

 

Gross NPAs to gross advances ratio stood at 5.61% in third quarter as compared to 4.6% while net NPAs to net advances ratio stood at 3.17% as compared to 2.6%. The provision coverage ratio was at 60.84%.

The net interest margin (NIM) has improved to 2.31% for quarter ended December 31, 2015, as against 2.26% in the quarter ended September 2015. The bank's share of CASA deposits reached level of 30.71% by recording a growth of 12.90% and reaches Rs 51,698 crore.

Bank's capital adequacy ratio (CRAR) as per Basel III was at 12.75% as on December 31, 2015 of which tier I capital stood at 10.55%.

"Our CRAR was one of the highest among the public sector banks and we are probably one of the banks, which had not requested capital infusion from the Union government," Jain said.

"The board has already taken a decision to raise Rs 1,100 crore tier II bonds whenever the market condition is conducive. We are not in a hurry to raise funds," he said.