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Indian Bank has reported net loss of Rs 217.74 crore for the quarter ended March 2020 due to higher provisioning. The bank has posted healthy 14% growth in net interest income (NII), while the core fee income of the bank also improved 27% in Q4FY2020. The domestic Net Interest Margin (NIM) of the bank improved to 2.96% in Q4FY2020 compared to 2.95% in the corresponding quarter of previous year.
On business front, the bank as has posted 8% growth in business with strong 10% surge in loan book. The asset quality of the bank was stable in Q4FY2020. Bank has substantially improved the credit to deposit ratio to 79.1% at end March 2020 from 77.6% at end March 2019. However, the CASA ratio of the bank has declined to 35.7% at end March 2020 from 35.7% at end March 2019.
Asset Quality: The bank has maintained stable asset quality in Q4FY2020.
- The fresh slippages of loans stood at Rs 1210 crore in Q4FY2020, while the recovery, upgradations and write-off together were at Rs 967 crore.
- The capital adequacy ratio of the bank stood at 14.1% with Tier I ratio at 12.1% at end March 2020.
| Asset Quality Indicators: Indian Bank |
|
Mar-20 |
Dec-19 |
Sep-19 |
Jun-19 |
Mar-19 |
Variation |
| QoQ |
YoY |
| Gross NPA (Rs Crore) |
14175.88 |
13892.20 |
13980.74 |
13511.21 |
13383.30 |
2 |
6 |
| Net NPA (Rs Crore) |
6184.24 |
6487.59 |
6613.47 |
6824.24 |
6793.11 |
-5 |
-9 |
| % Gross NPA |
6.88 |
7.21 |
7.20 |
7.33 |
7.12 |
-33 |
-24 |
| % Net NPA |
3.13 |
3.50 |
3.54 |
3.84 |
3.75 |
-37 |
-62 |
| % Provision Coverage Ratio |
73.05 |
70.84 |
68.06 |
66.34 |
65.72 |
221 |
733 |
| % CRAR - Basel III |
14.12 |
15.00 |
14.52 |
13.62 |
13.21 |
-88 |
91 |
| Tier I - Basel III % |
12.08 |
13.12 |
12.69 |
11.72 |
11.29 |
-104 |
79 |
| 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 8% YoY to Rs 466116 crore end March 2020, driven by 10% surge in advances to Rs 205890 crore. Deposits rose 7% to Rs 260226 crore at end March 2020.
CASA deposits ratio declines: The CASA deposits of the bank moved up 7% YoY to Rs 90158 crore at end March 2020. The CASA ratio was steady at 35.7% at end March 2020 compared to 35.7% at end March 2019.
Strong loan growth: Advances growth was driven by retail loans rising 16% YoY to Rs 37956 crore at end March 2020, while credit to agriculture increased 14% to Rs 44369 crore and MSME 13% to Rs 37208 crore at end March 2020. The corporate credit has rose 3% to Rs 77948 crore end March 2020.
Investment book of the bank moved up 18% YoY to Rs 77693 crore at end March 2020. The AFS book jumped 30% to Rs 34892 crore, while HTM book rose 21% to Rs 47058 crore at end March 2020. The duration of the overall investment portfolio stood at 3.21 years end March 2020 compared with 3.16 years at end March 2019.
Margins improve: The bank has showed sharp 13 bps YoY decline in cost of deposits to 5.21%, while yield on advances decline only 4 bps YoY to 8.39% in Q4FY2020. Thus, the NIM has improved to 2.92%.
Branch expansion: The bank has added 3 branches and 71 ATMs, taking overall tally to 2890 branches and 4059 ATM's end March 2020.
Book value of the bank stood at Rs 313.8 per share at end March 2020, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 200.5 per share at end March 2020.
Quarterly Performance
NII rises as NIM improves: Bank has recorded 11% increase in the interest earned at Rs 5492.73 crore, while interest expenses moved up 9% to Rs 3489.97 crore in Q4FY2020. NII improved 14% to Rs 2002.76 crore in the quarter ended March 2020.
Healthy growth in the core fee income: Bank has posted strong 27% growth in core fee income to Rs 427 crore, while the recoveries and other income jumped 165% to Rs 144 core and the treasury income jumped 96% to Rs 188 crore, The overall non-interest income jumped 48% to Rs 841.64 crore in the quarter ended March 2020.
Expenses ratio improves: The operating expenses of the bank increased 5% to Rs 1141.14 crore, as employee expenses moved up 9% to Rs 624.12 crore in Q4FY2020. Other expenses were flat at Rs 517.02 core. Cost to income ratio dipped to 40.1% in Q4FY2020 compared with 46.6% in Q4FY2019, helping the Operating Profit to increase 37% to Rs 1703.25 crore.
Provisions and contingencies rises: The bank has showed 15% rise in provisions to Rs 1891.86 core, causing pre-tax losses of Rs 188.6 core in Q4FY2020. The bank has made tax provisions of Rs 29.13 crore, leading to increase in net loss to Rs 217.74 core in the quarter ended March 2020.
Financial Performance FY2020:
Bank has posted 134% increase in net profit to Rs 753.36 crore in the year half year ended March 2020 (FY2020). The net interest income increased 8% to Rs 7606.42 crore, while non-interest income moved up 76% to Rs 3312.46 crore, pushing up net total income by 23% to Rs 10918.88 crore in FY2020. The operating expenses increased 10% to Rs 4420.84 crore, while provision and contingencies galloped 12% to Rs 5125.31 crore, allowing profit before tax to increase 383% to Rs 1372.73 crore in FY2020. The cost-to-income ratio improved to 40.5% in FY2020 compared to 45.2% in FY2019. After tax provision of Rs 619.37 crore, net profit has increased 134% to Rs 753.36 crore in FY2020.
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