Indian Bank Q1 profit drops on provisions
To focus on retail, corporate segments
Indian Bank posted a drop in standalone net profit to ₹369 crore for the first quarter of FY21 on higher provisioning, from ₹492 crore a year earlier.
Total income rose 8% to ₹11,447 crore, net interest income, 17% to ₹3,874 crore and other income grew 19% to ₹1,327 crore.Net interest margin stood at 2.83% and the bank aims to grow it by 4 bps during the year. Gross non-performing assets (NPAs) stood at 10.9% (12%) and net NPAs were at 3.76%(4.68%).The provision coverage ratio improved to 80.52%.
“Overall, it was a satisfying quarter, with the combined entity (Indian Bank and Allahabad Bank) meeting all key parameters of income, cost-efficiency and profitability,” said Padmaja Chunduru, MD & CEO, Indian Bank.
She said the bank made upfront provisions of ₹800 crore towards two accounts and contingency provisions for COVID-19. The accounts under moratorium constituted about 23% and good progress was being made on the collection front month on month. The amalgamation was going on track and was expected to be completed during the current fiscal. Mentioning that the bank was targeting around ₹4,500 crore of recovery for the current fiscal, including ₹2,000 crore in the NCLT accounts, she said the cash recovery in the first quarter was ₹201 crore and it would improve in the coming quarters.
To monetise its assets, Indian Bank in the first phase has identified 21 properties, including two of Allahabad Bank. The expected realisable value of these properties is around ₹450 crore. “We are not a distress seller and will sell it only when the market is right. Besides, we are also looking for a strategic partner for IndBank Housing Ltd.,” said Ms. Chunduru. The bank was planning to grow both the corporate and retail portfolios, she added.
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