Home >Companies >Company Results >Indian Bank profit triples to 1,182 cr in Q1 FY22 on merger benefits

"State-run lender Indian Bank recorded a net profit of 1,182 crore in the quarter ended June 30, 2021, marking a 220 per cent increase from profit of 369 crore seen in the corresponding quarter in the previous fiscal. The bank saw its net profit decline 31 per cent sequentially in comparison to 1,709 crore registered in the March quarter of FY21.

"After successfully completing the amalgamation during the previous year, the bank is now reaping the synergy benefits. With the vaccination program picking up and the economy expected to open up in the coming quarter, the Bank is well positioned to leverage the growth opportunities," said Indian Bank Managing Director and CEO Padmaja Chunduru.

Net Interest Income (NII), the difference between interest earned and interest expended, grew 3 per cent to 3,994 crore during the quarter under review as compared to 3,874 crore. Net interest margin (domestic) improved 2 basis points on annual basis, rising to 2.85 per cent for Q1 FY22 as against 2.83 per cent for Q1 FY21.

Net revenue for Q1FY22 grew by 13 per cent to 5,871 crore from 5201 crore for Q1 FY21. Non-interest income in Q1 FY22 increased 41 per cent Y-o-Y to 1,877 crore from 1,327 crore in Q1 FY21 on account of higher recovery in bad debts and rise in forex income.

Provisions and contingencies in Q1 FY22 declined 4 per cent to 2,290 crore from 2,384 crore in Q1 FY21. Operating expenses contracted by 2 per cent to 2,399 crore in Q1 FY22 as against 2,448 crore in the corresponding quarter of FY21.

On asset quality front, Indian saw gross non-performing assets (GNPA) ration improve 121 basis points to 9.69 per cent of gross advances by the end of June 2021. Net non-performing assets (NNPA) declined 29 basis points to 3.47 per cent during this period.

Indian Bank's total Capital Adequacy Ratio (CRAR) for Q1 FY22 was at 15.92 per cent with 247 bps increase on annual basis. Tier-I CRAR was at 12.22 per cent in June 2021 against 10.47 per cent in June 2020, up by 175 bps YoY.

Domestic CASA deposits grew by 9 per cent Y-o-Y to 2,20,109 crore in Q1 FY22 from 2,02,545 crore in Q1 FY21. Share of CASA to total deposits was 41 per cent in Q1 FY22, as against 42 per cent a year ago. On annual basis, current account deposits grew by 18 per cent and savings account deposits by 8 per cent.

Advances grew by 6 per cent to 3,89,625 crore in Q1 FY22 over 3,66,787 crore a year ago, primarily driven by growth in RAM sector. Of this, growth in Retail, Agriculture and MSME was 9 per cent, 17 per cent and 12 per cent, respectively.

"Post amalgamation the synergy benefits are coming in terms of cost efficiencies resulting in cost to income ratio of 40.86 per cent as against 47.06 per cent in the previous year. Merger of IT operations and integration of systems has resulted in economies of scale through vendor rationalisation, finer pricing on AMCs and improved operational efficiencies," said the Indian Bank CEO.

Indian Bank shares were trading at 12.36 on BSE, down 0.12 points or 0.96 per cent.

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