NPAs at R1,110.47 cr last fiscal
A three-fold increase in its non-performing assets (NPAs) has put the Chennai-based public sector lender Indian Bank in a tight spot. With its gross NPAs portfolio making a giant leap of R1,110.47 crore last fiscal, the bank hopes to convert a sizeable portion of them into performing assets during the current fiscal. It also forsees a reduction in the overall net interest margin (NIM) as the cost of funds bound to go up.
Announcing the earning performance, Indian Bank chairman and managing director TM Bhasin said, ?Most of our NPAs are soft ones, that is, these could become good soon. We hope that the gross NPA could be maintained at 2% (of gross advances), going forward.?
Indian Bank closed last year’s books with a gross NPA and net NPA of R1,850.78 crore and R1,196.83 crore, up from R740.31 crore and R397.04 crore, respectively, posted during 2010-11.
The bank saw a total income and net profit of R13,411 crore and R1,747 crore as against R10,542 crore and R1,714 crore, respectively, during 2010-11.
The bank?s total business last year was R2,11,988 crore (deposits of R1,20,804 crore, advances of R91,184 crore) up from R181,530 crore (deposits of R105,804 crore, advances of R75,726 crore).
Bhasin said the profit for the year would have been higher but for reversal of a loan account to NPA status from it earlier restructured one coupled with increased provisioning towards education loan.
He said the bank is expecting to grow its total business (deposits plus advances) by 20% this fiscal even though its NIM is expected to go down to 3.1% from the current 3.4% owing to increase in its cost of funds. The bank board that approved the accounts on Friday has recommended a dividend of 75%.
Fourth-quarter net slips 21% to R345.41 crore
Indian Bank has posted a 21.3% drop in its net profit to R345.41 crore for the quarter ended March 31, 2012, as compared to R438. 85 crore it logged in the same quarter previous fiscal. The total income has increased from R2,866 crore to R3,498 crore. The bank has posted a net profit of R1,746.96 crore for the year ended March 31, as compared to R1,714 crore an year ago period. The total income has increased from R10,542 to R13,411 crore.
