Indian Bank conducted a conference call on 08 May 2023 to discuss its financial results for the quarter ended March 2023. Shanti Lal Jain, MD&CEO of the bank addressed the call:

Highlights:

The margins of the bank have been impacted due to Interest income reversals in Q4FY2023. The bank witnessed interest income reversal of Rs 236 crore in Q4FY2023 up from Rs 130 crore in Q3FY23.

The bank is targeting credit growth of 10-12% and deposit growth of 8-9% for FY2024. The bank is conservative on its guidance for the loan growth.

The excess SLR investment of the banks and stands at Rs 35000 crore end March 2023.

The return on equity of the bank was at over 15% in Q4FY2023 and bank aims to further improve RoE in FY24.

The share of digital transaction has increased to 85% in FY2023.

The bank is focusing on the mid corporate loan segment with better margins and it has added 35 branches for the mid-corporate segment.

The bank has identified Rs 6200 crore of NPAs for transfer to NARCL.

The bank is focusing on protecting margins. It is shifting repo linked loans to MCLR based loans, while it is also introducing fixed rate loan products. The bank aims to maintain net interest margin in FY2024 at FY2023 level of 3.41%.

The share of MCLR loans stands at 59%, repo linked 34% and fixed rate 6-7%. The bank expects the yields to get boost from 40% of the loan book linked one-year MCLR and 14% linked to six-month MCLR.

The bank aims to reduce GNPA to below 5% by March 2024.

The bank expects the NPA provisions to reduce sharply ahead, as the NNPA has declined below 1%.

The SMA 1 and 2 loan book of the bank stands at Rs 2400 crore or 0.54% of the loan book.

The slippages from the MSME book were at Rs 1300 crore, of which Rs 700 crore came from restructured loan book.

The total slippages in the ECLGS loan have been at Rs 530 crore.