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Indian Bank Q1 net more than triple to Rs 1,182 cr, marginal rise in NIM up

Public sector lender Indian Bank’s net profit jumped 220 per cent to Rs 1,182 crore in the first quarter ended June 2021 (Q1FY22) on higher non-interest income.

It had posted a net profit of Rs 369 crore during the same quarter (Q1FY21) last year. Sequentially, the lender posted a net profit of Rs 1,709 crore for the quarter ended March 2021 (Q4FY21).

The bank’s net interest income grew marginally by almost three per cent to Rs 3,994 crore in Q1FY22 from Rs 3,874 crore in Q1FY21. The net interest margin (NIM) for domestic operations improved by 2 basis points (bps) to 2.85 per cent for Q1 FY12 from 2.83 per cent in Q1 FY21. NIM, on the other hand, saw an improvement of 51 bps on a quarterly basis.

Its non-interest income jumped 41 per cent to Rs 1,877 crore in the reporting quarter from Rs 1,327 crore in Q1FY21 due to higher recovery in bad loans and increase in foreign exchange earnings. Sequentially, non-interest income grew eight per cent from Rs 1,744 crore in the January-March 2021 period (Q4FY21).

Padmaja Chunduru, Managing Director and Chief Executive of the bank said that after the merger (of Allahabad Bank in April 2020), the benefits of synergy in terms of cost efficiency are coming, resulting in 40.86 percent to earnings ratio of 47.06 percent. last year.

The asset quality profile of the bank has also improved, with gross non-performing assets coming down to 9.69 per cent as of June 2021-22 from 10.90 per cent in the same period last year. Net NPAs declined from 3.76 per cent to 3.47 per cent during the quarter in April to June 2020-21. Loan loss provision declined five per cent to Rs 1,747 crore in Q1FY22.

The provision coverage ratio (PCR) for the quarter under review was seen at 66.49 per cent as against 68.09 per cent a year ago.

Advances grew six per cent to Rs 389,625 crore in Q1 of FY22 from Rs 366,787 crore a year ago, mainly driven by growth in the RAM sector (13 per cent), with growth in retail, agriculture and MSMEs. 9 percent, 17 percent and 12 percent respectively. Advances declined marginally by 0.2 per cent on a sequential basis.

Its deposits grew by 10 per cent to Rs 5,40,082 crore in June 2021 from Rs 4,89,109 crore a year ago.

The bank’s total capital adequacy ratio (CRAR) stood at 15.92 per cent for the quarter as against 13.45 per cent in the previous year.

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