The public sector lender Indian Bank has reported double-digit growth in net profit and operating profit, an increase in interest income, a reduction in net NPA, and a rise in businesses in the RAM (retail, agriculture, and MSME) sector – for the quarter ended September 30, 2022.
“Indian Bank has been firing on all cylinders,” said Shanti Lal Jain, Managing Director and CEO of the Bank.
The Chennai-headquartered bank reported a 12 per cent increase in its net profit at ₹1,225 crore in the quarter ended September 30, 2022, when compared with ₹1,089 crore in the year-ago quarter, helped by higher operating profit, good growth in net interest income, and lower provisions.
The operating profit of the company grew 11 per cent to ₹3,629 crore (₹3,276 crore in Q2 of last fiscal year), on the back of a 13 per cent rise in interest income at ₹10,710 crore (₹9,475 crore). For the first time, the interest income crossed the ₹10,000-crore mark.
Net interest income (NII) grew 15 per cent to ₹4,684 crore (as against ₹4,084 crore).
Though total non-interest income fell 7 per cent at ₹1,828 crore (₹1,966 crore), fee-based income grew 18 per cent to ₹723 crore (₹610 crore).
Total provisions were lower by 19 per cent at ₹2,058 crore (₹2,548 crore in Q2 of FY22). Fresh slippages were lower at ₹2,379 crore (₹₹3952 crore), in which the RAM sector accounted for ₹2,161 crore and the corporate segment for ₹218 crore, which was mainly due to a big government account, said Jain.
While cash recovery was significantly higher at ₹1583 crore (₹831 crore in Q2 of last fiscal), total recovery (cash + upgradation) was lower at ₹3255 crore as against ₹3426 crore.
Non-performing assets
Gross NPAs (GNPA) dropped to 7.30 per cent as compared with 9.56 per cent in the year-ago quarter and 8.13 per cent in June 2022 quarter. Net NPA fell to 1.5 per cent, compared with 3.26 per cent in September 2021 quarter and 2.12 per cent in the preceding quarter.
“Our SMA1 (principal or interest payment overdue between 31-60. days).and SMA2 (overdue between 61-90 days) have decreased and the overall collection efficiency was at 95 per cent in this September quarter when compared with 92 per cent in the year-ago quarter. Asset quality is good. Our NII has been growing due to improved business,” said Jain.
Domestic advances grew 10 per cent at ₹411,498 crore (₹374,508 crore). Retail, Agriculture and MSME loans grew by 14 per cent (at ₹83,655 crore), 15 per cent (at ₹95,214 crore), and 9 per cent (at ₹76,387 crore). The three segments accounted for 62 per cent of advances.
Also, the home loan business (including mortgage) grew by 11 per cent, auto loans by 28 per cent, personal loans by 26 per cent, and gold loans by 19 per cent.
Total deposits grew by 7 per cent at ₹588,860 crore (₹551,472 crore). CASA was maintained at 40.94 per cent.