Indian Bank Q1 earnings: Net profit rises 10% to ₹3,273 crore, NII advances 17%; asset quality improves

Indian Bank, the state-run lender on Friday, July 10, reported a net profit of ₹3,273 crore in the first quarter of current financial year, marking an increase of 10% from ₹2,973 crore in the same period last year. The jump in profit came on account of lower provisions for bad loans and improvement in asset quality.

The bank's net interest income or difference between interest earned on loans and expended on deposits surged by 17% to ₹7,435 crore compared with ₹6,359 crore in the year-ago period.

Indian Bank's provisions for bad loans dropped to ₹376 crore at the end of the first quarter compared with ₹748 crore in the previous quarter and ₹387 crore in the year-ago period.

Its asset quality showed an improvement in April-June period as its gross non-performing assets (NPA), as a percentage of total advances, improved to 1.86% compared with 3.01% in the corresponding period last year.

In absolute terms, gross NPA came in at ₹12,710 crore as against ₹18,067 crore.

Its net NPA improved to 0.15% as against 0.18% in the year-ago period.

The bank reported a stable operational performance as its operating profit margin improved by 134 basis points to 26.82% and its net worth jumped by 14% to ₹68,792.77 crore as against ₹60,383 crore.

Indian Bank shares came under strong buying interest following its earnings announcement. The stock surged as much as 8% to hit an intraday high of ₹857, outperforming the NIFTY PSU Bank index which was up 2.8%.

The stock was top gainer in the NIFTY PSU Bank index and was witnessing higher than usual trading activity.

On the BSE, as many as 3.16 lakh shares changed hands compared with an average of 1.22 lakh shares traded daily in the past two weeks.