Indian Bank has reported a 50% drop in its standalone net profit for the third quarter ended December 2018 to ₹152.26 crore against ₹303.06 crore in the year-earlier period on higher provisioning towards bad loans, mainly towards IL&FS.
“During the third quarter, we had bad loan exposure of ₹973 crore out of which IL&FS accounted for ₹664 crore,” Padmaja Chunduru, managing director and chief executive officer, Indian Bank, told the media. “Balance related to two other major accounts,” she said.
“It is not that the ₹664 crore that we have taken as NPA in IL&FS is entirely non-performing but as there is an issue which is under consideration of the government and the RBI, the account has been provided for. Following the NCLT order, all the cash flows of these companies are frozen in the escrow accounts and a decision has to be taken. These assets would take some time for resolution. That has impacted almost all the ratios,” she said.
Mentioning that their immediate focus would be on avoiding further slippages and on recoveries, she said: “Bad loans will not be a threat. We are trying all options. Out of IL&FS exposure, we are expecting a quick resolution for ₹300 crore. We also expect ₹200 crore to ₹250 crore outside National Company Law Tribunal resolution process by March 19,” she added.
During the period under review, the bank reported a total income of ₹5,269.10 crore against ₹4,903.07 crore.
Gross non-performing assets (NPAs) of the bank rose to ₹13,198.40 crore representing 7.46% of the gross advances against ₹9,595.15 crore (6.27%). Net NPAs stood at ₹7,571.07 crore, representing 4.42% of the net advances against ₹4,898.60 crore (3.30%). Non-performing loan provision coverage ratio stood at 60.91%.
Indian Bank reported total income ₹5,269.10 crore against ₹4,903.07 crore, while it incurred total expenditure of ₹4,122.49 crore (₹3,693.85 crore). “The fee income during the quarter was muted. Going forward, we expect growth in fee income, government business and loan processing fee,” she said.
During the nine months period, the bank recovered ₹94.61 crore in a fully provided NPA account. The bank also recovered ₹585.84 crore in one of the accounts by way of NCLT settlement, the bank officials said.