Chennai-headquartered public sector lender Indian Bank posted a 7.13% drop in net profit for Q4FY14 to R271.28 crore from R292.12 crore in the same quarter last fiscal. Total income of the bank stood at R4,234.83 crore against R4,022.46 crore in the year-ago period, an increase of 5.28%.
Speaking to reporters after releasing the earning performance on Monday, Indian Bank CMD TM Bhasin attributed the decline in bottomline growth to higher provisioning towards non-performing assets and other investment portfolios.
Bhasin said the percentage of gross NPAs went up to 3.67% at R4,562.20 crore from 3.33% at R3,565.47 crore in the year-ago period. The percentage of net NPAs stood almost at a similar level at 2.26% during both the quarters, while the actual net NPAs have grown to R2,763.63 crore from R2,384.29 crore.
Bhasin said at the policy directive of RBI, the bank has utilised R46.06 crore from floating provisions towards specific provision for NPAs. During the quarter, the government had converted the entire perpetual non-cumulative preference shares of R4,00 crore into 3,50,78,488 equity shares of R10 each at a conversion price of R114.03 per share, including premium. With this, the government’s holding in the bank has risen to 81.51% from 80%.
The provisioning for NPAs has increased 21.15% to R1,154.57 crore from R952.98 crore in 2012-13. The bank's NPA provision coverage stood at 57.77%. The NPA recovery for the year was at R625 crore for year ended March, 2014, against R653 crore for the previous year.
Total business for the year stood at R2,86,633 crore with an increase of 15.1% and total deposits were R1,62,275 crore, while advances were at R1,24,359 crore. Net interest margin was at 2.67% during the year compared to 3.09% in the previous year.
Bhasin said the bank's capital position is healthy with net worth improving to R11,535.58 crore from R10,838 crore in March 2013. The capital adequacy ratio (CRAR) as per Basel II was at 13.10% for FY14, of which tier-I capital stood at 10.51%. As per Basel III , the CRAR stood at 12.64%. The bank has a headroom of R8,646 crore to raise tier-II bonds.