Informist, Thursday, Jul. 24, 2025

By Pratiksha

NEW DELHI – Indian Bank's net profit for the quarter ended June rose on year, beating Street estimates, due to a sharp drop in provisions and rise in other income. However, higher interest expenses capped the rise in net profit.

The Chennai-based bank's bottom line for Apr-Jun rose 24% on year to INR 29.73 billion. The net profit was flat on quarter. The net profit of the bank was seen rising 16% on year to INR 27.95 billion for the quarter, according to the average of estimates by five brokerages. At 1455 IST, shares of the bank were up over 3% at INR 643.25 on the National Stock Exchange.

The state-owned bank's provisions and contingencies declined 45% on year to INR 6.91 billion in the reporting quarter. This was the biggest on-year drop in provisions in five quarters. The provisions on non-performing assets fell to INR 3.87 billion from INR 8.96 billion reported a year ago.

The lender's asset quality improved both sequentially and annually, supporting the bottom line. The gross non-performing asset ratio declined to 3.01% as of Jun. 30 from 3.09% at the end of March and 3.77% as on Jun. 30, 2024. The net non-performing asset ratio was 0.18% from 0.19% as on Mar. 31 and 0.39% at the end of June 2024. Its provision coverage ratio was 98.20% as of Jun. 30, against 96.66% a year ago.

The bank recognised fresh slippages worth INR 13.34 billion in Apr-Jun, against INR 19.28 billion a year ago. The lender's cash recoveries and upgrades were at INR 10.46 billion in Apr-Jun compared to INR 12.90 billion a year ago. Technical write-offs in the reported quarter were at INR 2.98 billion compared to INR 13.69 billion a year ago. 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 bank's total income for the reporting quarter rose 10.5% on year to INR 187.21 billion on the back of a 28% on-year jump in other income to INR 24.39 billion. Interest income rose over 8% on year to INR 162.83 billion.

The bank's net interest income--the difference between interest earned and expended--for the quarter rose 2.9% on year to INR 63.59 billion. Net interest income was seen rising 3.6% on year to INR 63.97 billion in the quarter, according to the average of estimates by six brokerages.

The lender's total expenses during the quarter under review rose over 12% on year to INR 139.51 billion. Of this, interest expenses increased 12% on year to INR 99.24 billion.

Steady growth in loans also boosted the public-sector lender's bottom line. The bank reported 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. Agriculture advances grew 16% on year to INR 1.44 trillion, and micro, small and medium enterprises loans were up 14% on year at INR 954.04 billion. Corporate loans rose only 2% on year to INR 1.93 trillion.

Indian Bank's 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 current account

savings account ratio, however, edged lower to 38.97%, from 40.17% at the end of the previous quarter and 40.56% a year ago. The bank's cost of deposits rose to 5.14% in June quarter from 5.10% in the previous quarter and 5.05% in the same quarter last year.

The lender's net interest margin contracted, primarily due to the Reserve Bank of India's Monetary Policy Committee cutting the repo rate by 100 bps so far in 2025. The pressure on net interest margin is expected to be across the banking sector. 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 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 cost of funds rose to 5.23% from 5.21% a quarter ago and 5.12% a year ago. The Basel-III capital adequacy ratio was at 17.80% as of Jun. 30.

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Vandana Hingorani

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.