Indian Bank Q3 profit jumps 62% to Rs 247 cr on reduction in bad loans; results very much in line with expectations, says CEO Padmaja Chunduru

Chennai: State-owned Indian Bank on Friday reported 62.3 percent jump in net profit at Rs 247.16 crore for December quarter 2019-20, mainly due to reduction in bad loans. The bank’s profit in the year-ago period stood at Rs 152.26 crore. Total income during the quarter under review was  Rs 6,505.62 crore, up from Rs 5,269.10 crore in the same period a year ago, Indian Bank said. The bank’s net non-performing assets (NPAs) as a percentage of assets reduced to 3.5 percent during October-December 2019-20 from 4.42 percent in the year-ago period. [caption id=“attachment_5250341” align=“alignleft” width=“380”] Representational image. Reuters[/caption] Similarly, the percentage of gross NPA was lower at 7.2 percent as against 7.46 percent. In absolute terms, net NPAs stood at Rs 6,487.58 crore. This compares with Rs 7,571.07 crore in the third quarter of the last financial year. The bank further said it had made provisioning of Rs 1,529.26 crore towards bad loans and contingencies. During October-December 2018-19, the provisioning stood at Rs 923.67 crore. The bank has provided Rs 1,004 crore for divergence in provisioning and also re-classified three standard accounts amounting to Rs 184 crore as fresh NPA, Indian Bank said. Briefing reporters, Indian Bank Managing Director and CEO Padmaja Chunduru said the third-quarter results were very much in line with expectations. “If you recall last quarter also we were talking of building the balance sheet strength and its resilience. I think that is very visible this quarter because there is secular growth across all verticals,” she said. To a query, she said the fresh NPA was from an account of DHFL and added the bank has more control over such accounts. She said the net interest income and other income were under control while gross NPA was maintained at the same level of last quarter. Chunduru said the bank during the quarter surpassed the Rs 4 lakh crore business mark during the quarter ending 31 December 2019. Following the Centre’s move to merge Indian Bank with Allahabad Bank, she said the business mark would double in size by June 2020. “The growth in business has been faster in the last two years and we expect it would be very fast going forward also,” she said. Asked if a name has been decided following the merger with Allahabad Bank, Chunduru said “we have discussed with Allahabad Bank, we are discussing with our own staff and their staff.” “The name would be acceptable to everyone and would be something reflecting the country’s own ethos. As of now Indian Bank name appeals to everyone,” she said. She said information technology major Tata Consultancy Services has been roped in as the IT partner for both the banks (Indian Bank and Allahabad Bank) as the core banking system of both the banks were on same platform.