Indian Bank conducted a conference call on 24 January 2024 to discuss its financial results for the quarter ended December 2023. Shanti Lal Jain, MD&CEO of the bank addressed the call:

Highlights:

The bank has recorded 11% growth in the business volume to touch Rs 11.64 lakh crore end December 2023. The deposits have increased 10% and advances have moved up 13%.

The retail, agriculture and MSME loan book has expanded 13% end December 2023.

The agriculture loan book grew 16% with gold loan growth of 28%.

MSME loan book expanded 7.5% with 18% growth in the micro loans and 2% rise small loans.

The corporate loan book increased 10% end December 2023.

The bank expects loan growth at 10-12% and deposit growth at 8-10% in FY2024.

The bank may raise the credit-deposit ratio by 1-2% higher.

The bank has raised the provision for the wage revision to 17% and created incremental provisions for retirement benefit with additional provisions of Rs 563 crore (Rs 310 crore for wage revisions and Rs 253 crore for retirement benefits) in Q3FY2024. The overall provisions for wage provision stands to Rs 1221 crore end December 2023 up from Rs 689 crore at the end of previous quarter.

As per the bank, it is required to create provisions for wage revision at Rs 75 crore per month.

The bank has maintained net interest margin at 3.49% in Q3FY2024 which is above the guidance of 3.4%. The bank expects to maintain net interest margin at 3.4% +/- 10bps in FY2024.

The bank has continues to maintain the recoveries and upgradations above fresh slippages of loans. The recoveries and upgradations were at Rs 6800 crore in 9MFY2024 against the slippages of Rs 5500 crore in 9MFY2024. The bank is targeting recoveries and upgradations of Rs 8000 crore in FY2024.

An increase in risk weights for NBFCs and personal loans as impacted the capital adequacy ratio of the bank by 57 bps in Q3FY2024.

The capital adequacy ratio would be higher by 153 bps including profit for 9MFY2024.

With the RBI projecting steady 7% growth for FY2025, the bank expect the similar kind of growth opportunities for FY2025 compared to FY2024.

With respect to the floods in Tamil Nadu, the bank has not received any big proposal for restructuring.