Analyst Concall
Indian Bk sets up INR-3.10-bln buffer in view of W Asia war
This story was originally published at 19:56 IST on 29 April 2026
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--Indian Bank: Provisioned INR 3.10 bln in Q4 in view of West Asia crisis
--CONTEXT: Indian Bank mgmt's comments in post-earnings call with analysts
--Indian Bank: West Asia war impact has not reflected on business so far
--Indian Bank: Don't expect FY27 treasury profit to be as good as seen FY26
--Indian Bank: Don't see serious impact of high yields on treasury income
--Indian Bank: Aim to maintain robust asset quality to manage cost of funds
--Indian Bank: Don't see "very huge" impact from expected credit loss norms
--Indian Bank: Will absorb impact of transition to ECL norms in 6-9 mos
--Indian Bank: Calculating impact of transition to expected credit loss norms
--Indian Bank: See advances growing 11-13% FY27 as jewel loans may slow down
By Krity Ambey and Ashutosh Pati
NEW DELHI – Indian Bank, whose provisions jumped to a seven-quarter high in the March quarter, provisioned INR 3.10 billion as buffer in view of the West Asia war, its management said Wednesday. Due to the sharply higher provisions of INR 12.26 billion, up 54% on year, the bank's net profit rose only 5% on year to INR 31.03 billion in Jan-Mar.
The impact of the West Asia war has not reflected on the lender's business so far, the management said at the analyst call after releasing the March quarter results. Its management expects some challenge in managing its treasury book in 2026-27 (Apr-Mar) due to mark-to-market losses from a sharp rise in government bond yields. In March, the 10-year bond yield rose almost 37 basis points after Israel and the US launched an aerial attack on Iran on Feb. 28.
"We don't expect treasury profit for FY27 to be as good as seen in FY26," the management said, adding that high yields would not have a "very serious" impact on the bank's treasury income. Indian Bank's other income, which includes treasury income, grew 8% to INR 99.91 billion in FY26.
Indian Bank also sees some pressure on cost of funds going ahead, the management said. The bank does not have too many levers to manage the cost of funds, so it will focus on maintaining a robust asset quality, the management added. The Chennia-based bank, whose cost of funds fell to 4.88% in Jan-Mar from 5.00% in the trailing quarter, aims to improve its gross non-performing asset ratio to 1.50-1.60% in FY27 from 1.98% as of Mar. 31, and maintain its net non-performing asset ratio in the range of 0.15-0.20%.
The bank expects its advances to grow 11–13% in FY27, slower than 13.4% in FY26, as jewel loan disbursements are likely to be lower than what was seen in FY26, the management said. The bank's jewel loan disbursals had nearly doubled to INR 185.27 billion in the financial year ended Mar. 31.
Speaking about adopting the expected credit loss-based provisioning norms of the Reserve Bank of India, Indian Bank's management said that they were still calculating the impact of the transition. But the impact should not be "very huge" and the lender would be able to absorb it in 6–9 months, the management added. The RBI issued final expected credit loss norms and confirmed their implementation on Apr. 1, 2027.
Shares of the Chennai-based bank, which had opened at INR 903.35 Wednesday, fell 2% on the National Stock Exchange following the March quarter earnings announcement. Its shares closed 2.3% lower at INR 875.55 on the NSE. End
Edited by Akul Nishant Akhoury
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