Public sector lender Indian Bank, which merged Allahabad Bank with itself from April 1, on Friday reported 1 per cent year-on-year (YoY) rise in net profit at Rs 369.26 crore for the first quarter ended June 30, 2020. The state-owned lender had posted net profit of Rs 365.37 crore in June quarter of the last fiscal and net loss of Rs 217.73 in the March quarter of 2020.
Interest income of the lender rose 7 per cent to Rs 10,120 crore during the April-June quarter of 2020-21, as against Rs 9,461 crore in the year-ago quarter. Interest expenses were up 2 per cent YoY at Rs 6,246 crore during June quarter this year.
Net Interest Income (NII), the difference between interest earned and interest expended, climbed 17 per cent to Rs 3,874 crore as against Rs 3,316 crore in the corresponding quarter ended June 30, 2019. Non interest income increased by 19 per cent to Rs 1,327 crore as against Rs 1,119 crore in Q1 FY20.
Operating profit of the bank grew by 23 per cent to Rs 2,753 crore from Rs 2,234 crore in the same period last year.
Indian Bank's provisions and contingencies rose sharply by 169 per cent to Rs 2,139.12 crore in Q1 FY21, as against Rs 794.82 crore in Q1 FY20. Provision Coverage Ratio (PCR) improved to 80.52 per cent as against 74.35 per cent in Q1 FY20. Excluding technical write off, it improved to 68.09 per cent from 64.35 per cent, as at June 2019.
On the asset quality, Indian Bank's gross NPA ratio rose to 10.9 per cent as on June 30, 2020 against 7.33 per cent as on June 30, 2019. Net NPA ratio, however, fell to 3.76 per cent as against 3.84 per cent in the year-ago period.
On impact of COVID-19, the lender said that the extent to which the pandemic will impact its results will depend on future developments, which are highly uncertain. The bank's capital and liquidity position is strong and would continue to be the focus area for the lender during this period, it said.
Following Q1 earnings, shares of Indian Bank ended Friday's trade at Rs 62.20, down 1.97 per cent, against the previous closing price of Rs 63.45 on the BSE.
By Chitranjan Kumar