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Indian Bank has reported 62% growth in net profit at Rs 247.16 crore for the quarter ended December 2019. The bank has posted healthy 14% growth in net interest income (NII), while the core fee income of the bank also improved 32% in Q3FY2020. The domestic Net Interest Margin (NIM) of the bank improved to 2.91% in Q3FY2020 compared to 2.88% in the corresponding quarter of previous year.
On business front, the bank as has posted 12% growth in business with 9% increase in loan book. The asset quality of the bank was stable in Q3FY2020. Bank has witnessed decline in the credit to deposit ratio to 74.8% at end December 2019 from 78.3% at end December 2018. The CASA ratio of the bank has eased to 34.5% at end December 2019 from 35.7% at end December 2018.
Asset Quality stable: The bank has maintained stable asset quality in Q3FY2020.
The fresh slippages of loans stood at Rs 2138 crore in Q3FY2020, while the recovery, upgradations and write-off together were higher at Rs 2323 crore.
The capital adequacy ratio of the bank stood at 15.0% with Tier I ratio at 13.1% at end December 2019.
| Asset Quality Indicators: Indian Bank |
|
Dec-19 |
Sep-19 |
Jun-19 |
Mar-19 |
Dec-18 |
Variation |
| QoQ |
YTD |
YoY |
| Gross NPA (Rs Crore) |
13862.32 |
13980.74 |
13511.21 |
13353.45 |
13198.40 |
-1 |
4 |
5 |
| Net NPA (Rs Crore) |
6487.59 |
6613.47 |
6824.24 |
6793.11 |
7571.07 |
-2 |
-4 |
-14 |
| % Gross NPA |
7.20 |
7.20 |
7.33 |
7.11 |
7.46 |
0 |
9 |
-26 |
| % Net NPA |
3.50 |
3.54 |
3.84 |
3.75 |
4.42 |
-4 |
-25 |
-92 |
| % Provision Coverage Ratio |
70.84 |
68.06 |
66.34 |
65.72 |
60.91 |
278 |
512 |
993 |
| % CRAR - Basel III |
15.00 |
14.52 |
13.62 |
13.21 |
12.67 |
48 |
179 |
233 |
| Tier I - Basel III % |
13.12 |
12.69 |
11.72 |
11.29 |
11.24 |
43 |
183 |
188 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore |
Business Highlights:
Stable business growth: The business of the bank has increased 12% YoY to Rs 450278 crore end December 2019, driven by 9% rise in advances to Rs 192658 crore. Deposits rose 14% to Rs 257621 crore at end December 2019.
CASA deposits ratio eases: The CASA deposits of the bank increased 10% YoY to Rs 86396 crore at end December 2019. The CASA ratio declined to 34.5% at end December 2019 compared to 35.7% at end December 2018.
Strong retail loan growth: Advances growth was driven by retail loans rising 22% YoY to Rs 37207 crore at end December 2019, while credit to agriculture increased 13% to Rs 42134 crore and MSME 19% to Rs 37917 crore at end December 2019. However, the corporate credit has declined -4% to Rs 67104 crore end December 2019.
Investment book of the bank jumped 21% YoY to Rs 77693 crore at end December 2019. The AFS book surged 24% to Rs 30110 crore, while HTM book also moved up 20% to Rs 47580 crore at end December 2019. The duration of the overall investment portfolio stood at 3.23 years end December 2019 compared with 3.29 years at end December 2018.
Margins improve: The bank has showed 5 bps YoY rise in cost of deposits to 5.39%, while yield on advances declined 2 bps YoY to 8.39% in Q3FY2020. The domestic NIM has improved 3 bps YoY to 2.91%.
Branch expansion: The bank has added 3 branches and 31 ATMs in Q3FY2020, taking overall tally to 2887 branches and 3988 ATM's end December 2019.
Book value of the bank stood at Rs 328.8 per share at end December 2019, while the adjusted book value (net of NNPA) was Rs 222.3 per share at end December 2019.
Quarterly Performance
NII rises as NIM improves: Bank has recorded 13% increase in the interest earned at Rs 5466.99 crore, while interest expenses declined 13% to Rs 3511.81 crore in Q3FY2020. NII improved 14% to Rs 1955.18 crore in the quarter ended December 2019.
Healthy growth in the core fee income: Bank has posted strong 32% growth in core fee income to Rs 346 crore, while the treasury income jumped 317% to Rs 240 crore. Thus, the overall non-interest income jumped 133% to Rs 1038.63 crore in the quarter ended December 2019. However, recoveries and other income declined 8% to Rs 46 crore.
Expenses ratio improves: The operating expenses of the bank increased 6% to Rs 1075.01 crore, as other expenses moved up 7% to Rs 482.01 crore, while employee expenses rose 5% to Rs 593 crore in Q3FY2020.
Cost to income ratio was nearly stable at 35.9% in Q3FY2020 compared with 47.0% in Q3FY2019, helping the Operating Profit to increase 67% to Rs 1918.80 crore.
Provisions and contingencies jumps: The bank has showed 66% surge in provisions to Rs 1529.27 crore.
Effective tax rate jumped to 36.5% in Q3FY2020 from 31.7% in Q3FY2019. Net Profit moved up 62% YoY to Rs 247.16 crore during quarter ended December 2019.
Financial Performance 9MFY2020:
Bank has posted 90% increase in net profit to Rs 971.09 crore in the nine months ended December 2019 (9MFY2020). The net interest income increased 7% to Rs 5603.65 crore, while non-interest income moved up 88% to Rs 2470.82 crore, pushing up net total income by 23% to Rs 8074.47 crore in 9MFY2020. The operating expenses increased 12% to Rs 3279.69 crore, while provision and contingencies rose 9% to Rs 3233.46 crore, allowing profit before tax to increase 130% to Rs 1561.32 crore in 9MFY2020. The cost-to-income ratio improved to 40.6% in 9MFY2020 compared to 44.7% in 9MFY2019. An effective tax rate increased to 37.8% in 9MFY2020 compared to 24.5% in 9MFY2019. The net profit has increased 90% to Rs 971.09 crore in 9MFY2020.
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