Chennai-based public sector lender Indian Bank has reported a 20% decrease in net profit at R264.50 crore for the third quarter ended December 2013, against a profit of R330.58 crore in the same quarter last fiscal.
Total income stood at R4,112.33 crore in the third quarter compared with R3,786.68 crore in the corresponding period of the previous fiscal.
Releasing the earnings performance on Thursday, TM Basin, chairman and managing director of Indian Bank, said the drop in bottomline was mainly due to increased provisioning towards pension fund and gratuity during the third quarter, which stood at R123 crore and R41 crore, respectively. However, on the asset quality front, the bank has improved, as its absolute gross NPA decreased sequentially by 8% on back of assets sale worth R390 crore to asset reconstruction companies (ARCs).
Gross NPAs stood at 3.42% at R3,834.78 crore for the quarter, compared to 3.18% at R3,180.12 crore for same period of the previous year. Net NPAs stood at 2.25% at R2,483.60 crore for the quarter, while it was 2.17% at R2,141.86 crore for the same period last year.
Bhasin said the bank has made a robust NPA recovery of R539 crore. Gross NPAs to gross advances ratio and net NPAs to net advances ratio improved sequentially to 3.42% and 2.25%, respectively, compared to 3.76% and 2.56%, respectively, in the second quarter. ?We are adequately capitalised and, hence, don?t need to raise any capital now,? he said.
Vaibhav Agrawal, V-P, research, banking, Angel Broking, said: ?Indian Bank has reported a weak operating performance, while asset quality reported improvement, aided by sale to ARCs. On the operating front, net interest income de-grew by 5% y-o-y, while non-interest income remained flat, in line with our estimates. Operating expenses grew 10% y-o-y and resulted in a pre-provisioning profit de-growth of 16%, which was on expected lines.”
