Analyst Concall
Indian Bank expects to achieve loan growth of 10-12% FY26
This story was originally published at 20:08 IST on 24 July 2025
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--Indian Bank: Planning to open 119 branches in FY26
--CONTEXT: Indian Bank mgmt's comments in post-earnings analyst concall
--Indian Bank: Expect to maintain NIM around 3.0-3.2%
--Indian Bank: Quantum of NIM decline to reduce from next quarter
--Indian Bank: Expect to achieve loan growth of 10-12% FY26
--Indian Bank: Expect to achieve deposit growth of 8-10% FY26
By Pratiksha and Ashutosh Pati
NEW DELHI – Indian Bank expects to achieve a loan growth of 10-12% and deposit growth of 8-10% in 2025-26 (Apr-Mar), the state-owned bank's management said in a post-earnings analyst call on Thursday.
The Chennai-based bank reported an 11.5% on-year growth in gross advances to INR 6.01 trillion as of Jun. 30. Within domestic loans, retail loans grew at the fastest pace, posting a year-on-year increase of nearly 17% to INR 1.24 trillion. Deposits grew 9.3% on year to INR 7.44 trillion as of Jun. 30. Of the total liabilities, the largest chunk comprised current account saving account deposits, which rose 4% on year to INR 2.77 trillion in the reporting quarter.
The lender expects to maintain a balance of 65:35 between its retail, agriculture and micro, small, medium enterprises loan book and corporate loan book.
The lender sees the current account savings account ratio around 40% in FY26. In Apr-Jun, the current account savings account ratio edged lower to 38.97%, from 40.17% at the end of the previous quarter and 40.56% a year ago.
Indian Bank expects the quantum of fall in net interest margin to reduce from the next quarter. The lender's net interest margin fell to 3.23% in the June quarter from 3.37% a quarter ago and 3.44% a year ago. The bank's domestic net interest margin was 3.35% in the June quarter, down from 3.48% a quarter ago, and 3.53% a year ago.
The pressure on net interest margin has been across the banking sector, primarily due to the Reserve Bank of India's Monetary Policy Committee cutting the repo rate by 100 bps so far in 2025. "I am hopeful that we will be able to maintain (net interest margin) around 3.0% to 3.15% to 3.30%," an official from the top management said.
Further, the lender sees credit cost around 1% in FY26. The bank's credit cost decreased to 0.28% in the June quarter from 0.81% in the previous quarter and 0.71% a year ago. The management also expects to maintain slippage ratio below 1% in FY26. In Apr-Jun, the slippage ratio fell to 0.94% from 1.09% a year ago.
The public-sector bank has guided for the gross non-performing asset at below 3% in FY26. "Our gross NPA guidance is less than 3%, we will definitely achieve that. I mean maybe we can go even up to 2.5%," the management said.
The lender plans to open 119 new branches in FY26. The bank added 9 new branches in Apr-Jun. Indian Bank's bottom line for Apr-Jun rose 24% on year to INR 29.73 billion. The net profit was flat on quarter. On Thursday, shares of the bank ended over 4% higher at INR 652.15 on the National Stock Exchange. End
Edited by Akul Nishant Akhoury
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