Public sector lender Indian Bank on Wednesday reported a 42 per cent dip in its standalone net profit at Rs 984 crore in the quarter ended March 2022, after it changed the deferred tax asset calculation from annual to quarterly basis.
In the year-ago quarter, the bank’s standalone net profit stood at Rs 1,709 crore which included Rs 913 crore of Deferred Tax Asset (DTA) for the entire FY21.
“Till the last financial year (FY21), we used to do DTA adjustment on a yearly basis. So, the entire DTA adjustment was credited in Q4 FY21 and the profit was Rs 1,709 crore (in Q4 FY21). The bank changed the policy in June 2021 and we are now doing the adjustment on a pro rata basis every quarter,” said S L Jain, managing director and CEO of Indian Bank.
For the full financial year 2021-22, PAT grew 31 per cent to Rs 3,945 crore as against Rs 3,005 crore in FY21.
Net interest income (NII) increased by 28 per cent to Rs 4,255 crore compared to Rs 3,334 crore in the year-ago period.
Its domestic net interest margin (NIM) stood at 2.87 per cent in Q4 FY22 as against 2.34 per cent in the same quarter of the previous quarter.
The bank’s asset quality saw improvement, with Gross Non-Performing Asset (GNPA) declining by 138 basis points (bps) year-on-year to 8.47 per cent from 9.85 per cent. Net NPA reduced by 110 bps to 2.27 per cent from 3.37 per cent.
Provision coverage ratio stood at 87.38 per cent.
Provisions and contingencies increased to Rs 1,913.89 crore in Q4 FY22 as against Rs 1,589.71 crore.
Total recovery during the quarter stood at Rs 2,809 crore and for the full year it was Rs 7,115 crore.
The bank expects recovery of around Rs 7,100 crore during FY23.
Fresh slippages in Q4 stood at Rs 3,298 crore, which included Rs 851 crore from Future Retail Ltd loan account.
Capital adequacy ratio was at 16.53 per cent. Common Equity Tier (CET) improved by 126 bps year on year to 12.53 per cent. Tier I capital improved by 123 bps to 13.17 per cent.
Jain said the lender is well capitalised to take care of growth. However, it has a board approved enabling provision to raise Rs 4,000 crore in equity.
Advances increased by 6 per cent to Rs 4,15,625 crore in FY22 from Rs 3,90,317 crore in FY21. RAM (Retail, Agriculture & MSME) loans grew by 11 per cent to Rs 2,42,700 crore in March 2022 from Rs 2,18,942 crore in March 2021.
The bank is targeting a credit growth of 8-10 per cent in FY23, Jain added.
Deposits also increased by 10 per cent and reached Rs 5,93,618 crore in March 2022.
The bank’s scrip closed at Rs 143.80 apiece, down 3.20 per cent on the BSE.