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Friday, May 11, 2012

Indian Bank fourth quarter profit dips 21%

Indian Bank has reported a 21.29 per cent dip in its net profit for the fourth quarter of 2011-12, to Rs 345.43 crore, compared with the corresponding quarter of last year. The bank's board has recommended a dividend of Rs 7.5 a share.

The Chairman and Managing Director, Mr T.M. Bhasin, told a press conference that the decline in net profit was due to Rs 171-crore “reversal of interest” and Rs 190-crore provision for bad debts.

The “reversal of interest” was on restructured loans, which today stand at Rs 8,902 crore. The bank had to make an “excess provision” on bad loans of Rs 190 crore, to meet an RBI guideline, which calls for banks to provide for 70 per cent of their gross non-performing assets.

Both these expenses were incurred in the fourth quarter of last year, Mr Bhasin said.

The bank's gross NPAs rose to Rs 1,850 crore from Rs 740 crore in the fourth quarter of last year. In terms of percentage of advances, gross NPAs rose to 2.03, from 0.98 earlier. Mr Bhasin said that these were “soft NPAs” which are recoverable. He noted that NPAs were growing in the entire banking sector, given the tough economic environment.

Full-year profit up marginally

For the full year 2011-13, Indian Bank made a net profit of Rs 1,747 crore, compared with Rs 1,714 crore for the previous year – a rise of 2 per cent.

Mr Bhasin said that in the current financial year Indian Bank would look to SMEs, agriculture and retail sectors for growth. He expects a 20 per cent rise in the bank's loan book, which stood at Rs 75,726 crore at the end of last year.


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