Indian Bank announces results for Q3 FY20 Business crosses Rs.4.5 trillion and Balance sheet size crosses Rs.3 trillion Operating profit grew by 67% and Net profit increased by 62% Robust growth of 133% in Other income.

 

 

 

The Board of Directors of the Bank approved the Balance Sheet and Profit & Loss for the
Third Quarter of 2019-20 (Q3 FY20) and for the Nine months period ended December 31, 2019
(April – December FY20), at their meeting held on 24th, January 2020 in Chennai.
Profitability:
 The Bank’s Operating profit registered a robust growth of 67%, touching Rs.1919 crore for
the Q3 FY20 as against Rs.1147 crore for the corresponding period of the previous year. For
the nine months period ended December 31, 2019 (NME FY20), Operating profit grew by
32% and was Rs.4795 crore as against Rs.3635 crore for the nine months period ended
December 31, 2018 (NME FY19).
 The Net profit at Rs.247 crore for Q3 FY20 as against Rs.152 crore for Q3 FY19 was up by
62% mainly on account of robust growth of 133% in other income (including interest on
IT refund). For the nine months period ended December 31, 2019, Net profit grew by 90%
and was Rs.971 crore as against Rs.512 crore for the corresponding period ended December
31, 2018.
 Total income of the Bank for the quarter ended December 31, 2019 was Rs.6506 crore, up
23% over Rs.5269 crore for the quarter ended December 31, 2018. For the nine months
period ended December 31, 2019, the same was Rs.18383 crore as against Rs.15530 crore
for the nine months period ended December 31, 2018.
 Net interest income rose by 14% for Q3 FY20 to Rs.1955 crore, from Rs.1717 crore for Q3
FY19. For NME FY20, Net interest income increased by 7% and was Rs.5604 crore as against
Rs.5255 crore for the corresponding period ended December 31, 2018.
 Net revenues (Net interest income plus other income) for Q3 FY20 grew by 38% and was at
Rs.2994 crore as against Rs.2162 crore for the corresponding quarter of the previous year.
For NME FY20, Net revenues was Rs.8074 crore as against Rs.6568 crore for the
corresponding period NME FY19 with an increase of 23%.
 Other income for the quarter ended December 2019 was Rs.1039 crore and increased by
133% over the corresponding quarter of the previous year including interest on IT refund of
Rs.296 Cr. For the nine months period ended December 31, 2019, it grew by 88% to touch
Rs.2471 crore. Adjusting for the one off item, Other income grew by 67% for Q3 FY 20 and
65% for nine months period ended December 31, 2019.

Operating expenses for the quarter ended December 31, 2019 was Rs.1075 crore as against
Rs. 1015 crore during the corresponding quarter of the previous year. Operating expenses
for the nine months period ended December 31, 2019 was Rs.3280 crore compared to
Rs.2933 crore in NME FY19.
 Net interest margin (NIM) (Domestic) increased by 3 basis points (bps) and touched 2.91%
for the quarter ended December 31, 2019 as against 2.88% for the quarter ended
December 31, 2018. On a sequential basis, it was maintained almost at the same level.
 NIM (Domestic) for the nine months period ended December 31, 2019 declined by 10 bps
and was 2.92% as against 3.02% for the year ago period.
 Cost-to-income ratio declined to 35.91% for the quarter ended December 31, 2019 as
against 46.96% for quarter ended December 31, 2018. The decrease was on account of
growth of 38% in operating revenues (including interest on IT refund of Rs.296 Cr). For the
nine months period ended December 31, 2019 it was 40.62% as against 44.65% (nine
months period ended December 31, 2018). After adjusting for the one off item,
Cost-to-income ratio was 39.84% for Q3 FY 20 and 42.16% for nine months period ended
December 31, 2019
 Provisions and contingencies for the Q3 FY20 was Rs. 1672 crore mainly due to higher
provision towards NPAs as against Rs.994 crore for the corresponding quarter ended
December 31, 2018. For the nine months period ended December 31, 2019, the same was
Rs.3824 crore as against Rs.3123 crore for the previous nine months period ended
December 31, 2018.
 Return on Average Assets (RoA) at 0.33% for the quarter ended December 31, 2019,
recorded an increase of 10 bps (Q3 2018-19: 0.23%) due to increased Net Profit. RoA for the
nine months period ended December 31, 2019 was 0.45% as against 0.26% for the nine
months period ended December 31, 2018.
 Return on Equity (RoE) for Q3 FY20 was 5.04% as against 3.72% for Q3 FY19. For the nine
months period ended December 31, 2019, RoE was 7.25%.
Assets & Liabilities:
 Business at Rs.450278 crore as of December 31, 2019, recorded a Y-o-Y growth of 12% over
December 31, 2018.
 Total Balance sheet size grew by 14% (Y-o-Y) and was Rs.300110 crore as of December 31,
2019 as against Rs.263853 crore as of December 31, 2018.
 Total deposits at Rs.257621 crore as of December 31, 2019, grew by 14% over December

Domestic CASA deposits recorded a Y-o-Y growth of 10% and share of CASA was 34.51% of
total domestic deposits as on December 31, 2019 as against 35.73% as on
December 31, 2018 which was mainly on account of Term deposits outgrowing CASA.
Growth in CASA was primarily driven by a Y-o-Y growth of 10.75% in Savings account
deposits to reach Rs.73236 crore and supplemented by Y-o-Y increase of 6.7% in Current
account deposits which reached Rs.13160 crore.
 Advances at Rs.192658 crore as of December 31, 2019 grew by 9% over December 31, 2018
(Rs.176864 crore) driven primarily by growth in Retail (22%) [Of which Housing loans – 31%
Mortgage loans – 21% and Other retail loans – 25%], Agriculture (13%), MSME (19%) and
supplemented by Overseas advances (16%). Corporate loans however contracted by
4% YoY.
 Priority Sector portfolio increased from Rs.65438 crore as of December 31, 2018 to
Rs.73760 crore as of December 31, 2019. Priority sector advances as a percentage of ANBC
stood at 47% as against the regulatory requirement of 40% as on December 31, 2019.
 Advances to Weaker section increased from Rs.16300 crore as on December 31, 2018 to
Rs.18287 crore as on December 31, 2019, constituting 12% of ANBC and as against
regulatory requirement of 10%.
Capital Adequacy:
 The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines, was healthy at 15%
as at December 31, 2019 (12.67% as at December 31, 2018) as against regulatory
requirement of 10.875%.
 Tier-I CAR was at 13.12% as on December 31, 2019 compared to 11.53% as at
December 31, 2018. Risk-weighted Assets were at Rs.157738 crore (Rs.154825 crore as at
December 31, 2018).
Asset Quality
 Gross non-performing assets were at 7.20% of Gross advances as on December 31, 2019
and declined by 26 bps from 7.46% as on December 31, 2018. For the sequential quarter,
GNPA % was 7.20%. The GNPA % was maintained at the same level despite one large HFC
account being recognized as a Non performing asset.
 Net non-performing assets came down from 4.42 % as on December 31, 2018 to 3.50% of
Net advances as on December 31, 2019 with a reduction of 92 bps. For the sequential
quarter, NNPA % was 3.54%.
 Provision coverage ratio improved YoY 993 bps to 70.84% from 60.91%. Excluding technical
write off, it improved by 1057 bps to 53.20% from 42.63%.

Recovery from Bad debts improved by 13% for the nine months period ended
December 31, 2019 over December 31, 2018.
Recognitions:
 ‘Best Bank 2017-18’ under Nationalised Bank category – Financial Express
 Voted as a ‘Trusted Bank’ in the Nationalised Banks Category April 2019 – Readers Digest
 Winner of ‘Digi Dhan Digital Payment Award 2018-19’ from Ministry of Electronics &
Information Technology (MeitY) for achieving Digital Transactions Target (160.82%) under
> Rs.10 Cr to Rs.50 Cr category for the year 2018-19.
 First among PSBs for Excellence in performance under “SHG Bank Linkage Programme” in
Tamil Nadu for FY 2018-19 – NABARD
 “Swatchatha Pakhwada 2019” – First position for outstanding contribution to cleanliness
drive.

MD & CEO’s Quote:
Commenting on the results, Ms. Padmaja Chunduru MD & CEO, Indian Bank said,
Bank has delivered yet another satisfying result with Business and Balance sheet crossing
milestone figure of Rs.4.5 trillion and Rs.3 trillion respectively. Increase of 12% on
YoY basis in Business was propelled by good growth, both in Deposits (14%) and
Advances (9%) which is above Industry average. Bank’s advances continued to ride on
the retail growth momentum which now constitutes 64% of the Bank’s Domestic loan
book. Retail assets witnessed growth across all segments viz., Retail (22%), Agriculture
(13%) and MSME (19%).
The earnings have been good despite recognition of a big HFC account as NPA. The
slippages otherwise were contained through close and rigorous follow up which lent
stability to the Asset quality metrics. Net NPA% has come down sequentially from 3.54%
to 3.50% and Gross NPA% @ 7.2% was maintained at the same level.
With regard to amalgamation of Allahabad Bank with Indian Bank, the process is on and
all activities are following expected timelines. We are sanguine that this would be a
seamless integration resulting in good synergy for the Bank and offer improved products
and services for the customers.
The Bank is geared up and we expect a good overall performance for FY 20.

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