Indian Bank Q2 net profit jumps 164% to Rs 1,089 cr

State-run Indian Bank on Thursday reported a 164 per cent jump in standalone net profit at Rs 1,089 crore for the quarter ended September, aided by a fall in provisions and better recoveries.

The lender had reported a profit after tax of Rs 412 crore in the year-ago period.

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The bank's Managing Director and CEO S L Jain attributed the rise in profit to the improvement in other income, higher cash recoveries, reduction in provisions and lower expenditure.

Net interest income (NII) declined by 1 per cent to Rs 4,084 crore in the quarter from Rs 4,144 crore in the year-ago period.

Domestic net interest margin (NIM) declined to 2.89 per cent in Q2 FY22 as against 3.06 per cent in the corresponding quarter of the previous fiscal.

Non-interest income rose by 26 per cent to Rs 1,966 crore as against Rs 1,558 crore earlier on account of increase in recovery of bad debts (450 per cent) and forex income (42 per cent), the bank said in a release.

Total provisions dipped by 14 per cent to Rs 2,187 crore from Rs 2,530 crore.

Total expenses dropped 6 per cent to Rs 8,165 crore as compared to Rs 8,673 crore.

Gross non-performing assets (GNPAs) ratio improved marginally to 9.56 per cent from 9.89 per cent. Net NPAs stood at 3.26 per cent as against 2.96 per cent in Q2 FY2021.

Fresh slippages were at Rs 3,952 crore. Of this, Rs 1,820 crore came from Srei Group companies.

Cash recovery during the second quarter was Rs 831 crore.

Jain said in the second half of the current financial year, the bank is targeting recoveries of over Rs 4,000 crore.

He also said the bank has identified eight accounts worth Rs 1,900 crore to be transferred to the National Asset Reconstruction Company Ltd (NARCL).

For Q2 FY22, its total capital adequacy ratio (CRAR) stood at 15.88 per cent.

Advances grew by 5 per cent to Rs 3,85,730 crore in Q2 FY22 from Rs 3,65,896 crore a year ago. This was primarily driven by growth in RAM (retail, agriculture and MSME) sector at 13 per cent. Growth in retail, agriculture and MSME was 14 per cent, 16 per cent and 8 per cent, respectively.

Total deposits grew by 10 per cent YoY to Rs 5,51,472 crore in September 2021 as against Rs 5,01,956 crore in September 2020.

The bank's scrip closed at Rs 174.35 apiece, down 8.24 per cent on BSE.