Indian Bank skids 4% as deferred tax adjustment drags Q4 net profit down by 42%

NEW DELHI – Indian Bank lost 4 per cent in early trade on Thursday as the public sector lender reported a 42 per cent dip in its standalone net profit at Rs 984 crore in the quarter ended March 2022, after it changed the deferred tax asset calculation from annual to quarterly basis.

In the year-ago quarter, the bank's standalone net profit stood at Rs 1,709 crore.

Indian Bank’s counter fell to a low of Rs 138.10 as against Rs 143.80 at previous close on the BSE.

The bank got a write-back of Rs 161 crore against DTA adjustments which added to profit compared to a much higher write-back of Rs 913 crore in the year-ago period.

The DTA is spread over four quarters this time while in the year-ago period, the full-year DTA of Rs 913 crore got reflected only in the fourth quarter, taking the year-ago year profit higher, managing director Shanti Lal Jain explained. Total provision rose 20.4 per cent to Rs 1,914 crore against Rs 1,590 crore.

Operating profit registered a 15 per cent rise at Rs 2738 crore against Rs 2386 crore on higher total income and lower expenses. Meanwhile, total income grew 9 per cent at Rs 11405 crore against Rs 10485 crore.

Net interest margin, a key profitability measure, improved marginally at 2.87 per cent for the reporting quarter against 2.34 per cent in the year-ago quarter. Net interest income for the quarter stood at Rs 4255 crore showing a 28 per cent year-on-year rise.

The bank's asset quality improved with the gross non-performing assets ratio being at 8.47 per cent against 9.85 per cent a year back. This helped the bank to go for lower bad provisions at Rs 2046 crore against Rs 2870 crore. Total slippages during the quarter were Rs 3298 crore.

The bank's capital adequacy ratio stood at 16.53 per cent for the period under review.