Indian Bank posts 52% rise in Q3 net profit

 


State-owned Indian Bank reported a 51.84 percent rise in its net profit to Rs 2,119.35 crore in the third quarter of financial year 2023-24. On a sequential basis, net profit of the lender rose 6.6 percent.


This was on the back of better asset quality and increase in fee based income.



Gross non-performing assets (NPA) of the bank as of December 31, 2023, stood at 4.47 percent, as against 4.97 percent last quarter and 6.53 percent last year. The company's net NPA stood at 0.53 percent, as against 0.60 percent in the last quarter and 1 percent last year.


In absolute terms, gross NPA eased to Rs 22,787 crore in October-December quarter, from Rs 24,488 crore in a quarter ago period and Rs 29,484 crore in a year ago period.


Net NPA fell to Rs 2,579 crore in December quarter, from Rs 2,826 crore a quarter ago and Rs 4,271 crore a year ago.


In the reporting quarter, the total deposit of the lender rose 10 percent on-year to Rs 6.54 lakh crore. On quarterly basis, deposits rose 2 percent.


Of the total deposit, bank have a domestic deposit of Rs 6.29 lakh crore and Rs 24,753 crore overseas deposits. On a yearly basis, domestic and overseas deposits grew 8 percent and 89 percent, respectively.


CASA deposit grew by 8 percent, savings deposit grew by 7 percent and Current deposit by 12 percent on a yearly basis. Domestic CASA ratio stood at 41.14 percent.


The advances of the state-owned lender grew 13 percent on-year to Rs 5.1 lakh crore in October-December quarter.


RAM (Retail, Agriculture & MSME) advances grew by 13 percent on-year to Rs 2.97 lakh crore in reporting quarter, from Rs 2.63 lakh crore in a year ago period. RAM contribution to gross domestic advances is 62.58 percent.


Retail, Agri & MSME advances grew by 14 percent, 16 percent and 7 percent on-year, respectively.


Home Loan (Including mortgage) grew by 12 percent on-year, Auto Loan by 46 percent on-year and Personal Loan by 30 percent on-year. Priority Sector portfolio stood at Rs 1.72 lakh crore in third quarter of the current financial year.


The net interest income (NII) of the bank rose just 6 percent on-year in the October-December quarter to Rs 5,815 crore. In the quarter ago period, it stood at Rs 5,741 crore and in a yearo ago period it stood at Rs 5,499 crore.


The net interest margins of the lender stood at 3.41 percent in October-December quarter, from 3.46 percent in a quarter ago period and 3.67 percent in a year ago period.


The total domestic investment of the lender increased in the reporting quarter by 13 percent to Rs 2.06 lakh crore. Domestic investment includes investment in SLR and non-SLR securities.


In SLR securities, investment in state government securities and central government securities rose 22 percent and 6 percent, on-year respectively. However, investment in treasury bills reduced by 33 percent.


As of December 31, 2023, the lender have securities worth Rs 1.47 lakh crore in held to maturity (HTM), Rs 59,024 crore in Available for Sale (AFS), and Rs 433 crore in Held for Trading (HFT).

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Indian Bank Q2 Net profit rises 61%

 




Public sector lender Indian Bank has reported a 61 per cent rise in net profit during the second quarter of the financial year FY24 to Rs 2,068.49 crore, compared to Rs 1,287.39 crore during the same period last financial year. The improved net profit is mainly due to a 23 per cent increase in net interest income (NII) for the quarter.


The total income of the Chennai-based bank also rose by 25 per cent during the quarter, reaching Rs 15,929.4 crore compared to Rs 12,714.2 crore in the same quarter of the FY23. "Indian Bank is strategically expanding its business with a major focus on retail, agriculture, and MSME sectors, targeting 10-12 per cent credit growth in FY24. Adopting digital banking as our core focus, we are committed to fostering financial growth and prosperity for individuals and businesses across diverse sectors of society. Through constant innovation, we aim to simplify processes, enabling quick and convenient banking," the bank said in a statement on Thursday. The bank's NII, the difference between interest earned and interest expended, stood at Rs 5,741 crore, compared to Rs 4,684 crore during the second quarter of the previous financial year.


The bank's gross non-performing assets (NPA) for the quarter under review stood at 4.97 per cent of gross advances, a decrease from 7.30 per cent in the corresponding period of the previous year. Similarly, the net NPA improved from 1.5 per cent at the end of September 2022 to 0.60 per cent as of September this year.


The provision coverage ratio also improved to 95.64 per cent from 91.08 per cent at the end of September 2022. The bank's return on average assets increased to 1.06 per cent in the second quarter of FY24, up from 0.71 per cent in the second quarter of FY23. Its return on equity also rose to 19.90 per cent from 13.83 per cent in September 2022.


The total business of the bank recorded year-on-year growth of 10 per cent, reaching Rs 1,13,3091 crore in September 2023, from Rs 1,02,6801 crore in September 2022. Its advances increased by 12 per cent year-on-year to Rs 4,92,288 crore in September 2023 from Rs 4,37,941 crore in September 2022.



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Indian Bank Q1 results: Net profit rises 41%


Chennai-based Indian Bank on July 27 reported a 40.8 percent rise in net profit at Rs 1,708.8 crore for the April-June quarter of FY24, as against Rs 1,213 crore a year ago.


The public-sector lender's gross non-performing assets (GNPA) declined to 5.47 percent from 8.13 percent during the quarter, while net non-performing assets (NNPA) fell to 0.70 percent from 2.21 percent.


Indian bank's Net Interest Income (NII) has jumped 26 percent to Rs. 5703 in June 2023 from Rs. 4534 in June 2022. However, CASA deposits increased by 5 percent y-o-y to Rs. 250242 crores in June 2023. The provision coverage ratio (PCR) has improved by 702 bps YOY 95.10 percent from 80.80 percent in June 2022.


Total income in the first quarter of the current fiscal rose to Rs 14,759 crore as against Rs 11,758 crore, Indian Bank said in a regulatory filing. The lender's interest income also increased to Rs 13,049 crore from Rs 10,153 crore in the same quarter a year ago.


However, the capital adequacy ratio of the bank declined to 15.78 per cent at the end of June compared to 16.51 per cent in the year-ago period.

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Indian Bank Q4 net profit up 48% as NII rises 29%

 



State run Indian Bank posted a 48 per cent rise in consolidated net profit at Rs 1,520 crore in Q4 FY23, compared to Rs 1,024 crore in the same period in FY22 and helped by a rise in income and improved asset quality.


The Chennai-based lender’s total income during the quarter under review picked up by 25 per cent to Rs 14,416 crore as against Rs 11,556 crore in Q4 FY22. As on March 31, 2023, the company’s gross non-performing assets (NPA) were 5.95 per cent of the gross advances, as compared to 8.47 per cent during the same period in 2022. Similarly, net NPA was seen at 0.90 per cent of gross advances as on March 31, 2023 as compared to 2.27 per cent during the same period in 2021-22.



Net interest income (NII), which is the difference between interest earned and interest expended, was seen at Rs 5,519 crore in Q4 FY23, increasing 29 per cent when compared to Rs 4,271 crore during the same period in FY22.


Indian Bank's board recommended a dividend of Rs 8.60 per equity share (86 per cent of paid up equity capital of the bank) for FY23. The lender reported an earning per share (EPS) of Rs 12.20 for the period compared to Rs 8.22 for the period ended March 31, 2022.


In Q4 FY23, the bank’s return on average assets was seen up at 0.89 per cent from 0.62  per cent in the Q4 of FY22. Its total capital adequacy ratio (CAR) during the quarter remained the same as Q4FY22 at 16.84 per cent.  


During the entire financial year 2022-23, the bank’s net profit increased by 35 per cent to Rs 5,572 crore as against Rs 4,142 crore in 2021-22. Its total income during the year under review was up by 14 per cent to Rs 52,790 crore as against Rs 46,268 crore in 2021-22.



The bank board has also cleared a plan to raise equity capital aggregating up to Rs 4,000 crore through various modes, including follow-on public offer (FPO), rights issue, qualified institutional placement (QIP) or combination in 2023-24.


The board approved raising around Rs 3,000 crore through the issuance of Basel III Compliant AT 1 Perpetual Bond or Tier-2 Bond in one or more tranches during the current or subsequent financial years based on requirement.


The bank’s cost-to-income ratio improved to 46.47 per cent in March 2023 from 53.03 per cent in March 2022. Its domestic NIM improved to 3.59 per cent during the period from 2.87 per cent last year, advances too increased by 14 per cent YoY to Rs 4,73,586 crore in March 2023 from Rs 4,15,625 crore in March 2022.


RAM (Retail, Agriculture and MSME) advances grew by 12 per cent YoY to Rs 2,72,679 crore from Rs 242,700 crore last year. RAM contribution to gross domestic advances was 61 per cent with retail, agri and MSME advances growing by 13 per cent, 16 per cent and 7 per cent YoY respectively.


Home Loan (Including mortgage) grew by 11 per cent YoY, auto loan by 28 per cent and Personal Loan by 46 per cent during the period. The bank’s deposits increased by 5 per cent YoY and reached Rs 621,166 crore in March 2023. Its CASA ratio stood at 42 per cent. 


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Indian Bank Q1 net profit rise 4%

 


State-run Indian Bank has posted a 4 per cent increase in net profit for the first quarter of the financial year 2022-23 to Rs 1,311 crore as compared with Rs 1,259 crore during the same period during the last financial year.


Total income of the bank during the April-June quarter of 2022-23 also increased by 3 per cent to Rs 11,898 crore from Rs 11,553 crore in the year ago period. The bank’s operating profit for June 2022 was seen up by 4 per cent at Rs 3,575 crore from Rs 3,435 crore in June 2021.


The gross non-performing assets decreased by 156 basis points (bps) to 8.13 per cent of the gross advances as of June 2022, from 9.69 per cent during the same time last year. Its net non-performing assets also reduced by 135 bps to 2.12 per cent from 3.47 per cent in June 2021. Non-performing asset provision coverage ratio improved by 608 bps to 88.08 per cent during the first quarter of 2022-23 from 82 per cent in Q1 of 2021-22.


During the period under review, the net interest income increased by 13 per cent to Rs 4,534 crore from Rs 3,995 crore during the same time last financial year. Non-Interest income (excluding treasury income) grew by 37.67 per cent to Rs 1,736 crore in June 2022 from Rs 1,261 crore during the same quarter last financial year.


Deposit increased by 8 per cent year on year and reached to Rs 5,84,251 crore in April to June quarter of 2022. CASA also grew by 8 per cent. Advances increased by 9 per cent to Rs 4,25,203 crore during the quarter, from Rs 3,89,626 crore in June 2021.


“The core operations of the bank have contributed to this growth. This is because our retail credit has gone up by 14 per cent, housing loan by 11 per cent, auto loan by 22 per cent, personal loan by 32 per cent and gold loan by 42 per cent. Along with this CASA has grown by 8 per cent. So the result is increase in NII and other income,” said

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Indian Bank Net profit rise 34% in Q3

 


Indian Bank reported a 34 per cent year-on-year (YoY) rise in net profit at Rs 690 crore for the December quarter, despite a 21 per cent growth in provisions and contingencies. Net profit was Rs 514 crore in the year-ago period.

The bank saw a 30 per cent rise in earnings from treasury operations, unlike most of its peers, helping its profit numbers.

Its net interest margin from domestic operation was at 3.03 per cent for the December quarter against 2.89 per cent for the preceding quarter. The NIM was 3.13 per cent in the year-ago period.

The bank's operating profit rose 16 per cent to Rs 3,288 crore for the quarter against Rs 2,846 crore in the year-ago period. Net interest income was at Rs 4,395 crore compared with Rs 4,314 crore over the same period. The bank set aside Rs 2,493 crore for provisions and contingencies in the quarter under review against Rs 2,061 crore it did earlier.

Its gross non-performing assets ratio stood at 9.13 per cent at the end of December as against 9.56 per cent three months prior to that. Net NPA was at 2.72 per cent against 3.26 per cent.

It saw fresh slippages of Rs 2,732 crore while cash recovery from bad loans was Rs 1,096 crore. The company plans to transfer five NPA accounts totalling Rs 1300 crore into the bad bank initially, managing director Shanti Lal Jain said.

He is expecting the bank to achieve an 8 per cent rise in advances for FY21 even as its advances growth so far remained muted at 3 per cent YoY at Rs 4 lakh crore.

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Indian Bank Q2 results: Net profit jumps 2.6x


State-owned Indian Bank has reported a 2.6-fold rise in net profit for the September quarter buoyed by earnings from treasury operation and bad loan recovery while it logged lower interest income and higher provisions. 
The net profit for the quarter was at Rs 1089 crore as against Rs 412 crore in the year-ago period.

Its quarterly net interest margin (NIM) from domestic operation fell to 2.89 per cent from 3.06 per cent in the same period last year. Net interest income declined by 1 per cent at Rs 4084 crore as compared with Rs 4144 crore over the same period.

The bank’s managing director Shanti Lal Jain, who took charge on September 1, exuded confidence that interest income would rise with higher credit offtake which is expected going forward with the economic recovery.

Its operating profit rose 11 per cent at Rs 3276 crore as against Rs 2942 crore, riding on 26 per cent higher non-interest income at Rs 1966 crore as against Rs 1558 crore in the year-ago period. Non-interest income was buoyed by recovery of bad debts as well as higher forex income, Jain said.

The lender made a total recovery of Rs 3426 crore including upgradation of accounts as compared with Rs 1168 crore earlier. Provisions & contingencies for the second quarter ending September 30 were at Rs 2187 crore, 13.6 per cent lower compared with Rs 2530 crore earlier.

The bank’s gross non-performing assets ratio improved to 9.56 per cent at the end of the quarter from 9.89 per cent a year back. Net NPA however rose to 3.26 per cent as against 2.96 per cent over the same period.

It has seen fresh slippages of Rs 3952 crore with the classification of Srei Group’s account as NPA contributing Rs 1828 crore to it. "The slippage is due to one NBFC group account. We are not overly concerned over asset quality in the future," Jain said.

Its advances grew by 5 per cent to Rs 3.86 lakh crore, primarily driven by growth in retail, agriculture and MSME lending. Loans to these sectors constitute 60 per cent of the bank’s total advances.
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Indian Bank posts multifold jump in Q1 net profit

 


State-owned Indian Bank on Monday reported a multifold jump in its net profit to Rs 1,182 crore for the first quarter ended June 30, 2021. The bank had reported a net profit of Rs 369 crore in the corresponding quarter a year ago.


Total income during April-June 2021 inched higher to Rs 11,500.20 crore, from Rs 11,446.71 crore in the year-ago period, Indian Bank said in a regulatory filing.


Its interest income was down five per cent to Rs 9,624 crore in the first quarter of the current financial year, against Rs 10,120 crore a year ago.


On the asset quality front, the lender's gross non-performing assets (NPAs) fell to 9.69 per cent of the gross advances as of June 30, 2021, from 10.90 per cent by the end of June 2020.


Net NPA or bad loans also softened to 3.47 per cent from 3.76 per cent.


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Indian Bank reports huge net profit in Q4

 


Indian Bank on Friday reported a net profit of Rs 1,708.85 crore in the March-ended quarter. The lender had posted a net loss of Rs 217.74 crore in the same quarter of the preceding financial year 2019-20.


Sequentially, the bank had posted a net profit of Rs 514.29 crore in the December quarter of the financial year 2020-21.


The bank said figures of March 31, 2020, are related to standalone Indian Bank financing for the pre-amalgamation period, hence not comparable with the post amalgamation financials of December 2020 and March 2021.


The erstwhile Allahabad Bank was amalgamated into Indian bank with effect from April 1, 2020.


Total income during the January-March quarter of 2020-21 increased to Rs 10,647.87 crore. It was Rs 6,334.37 crore in the same period of 2019-20, Indian Bank said in a regulatory filing.


For the full year of the financial year 2020-21, the net profit of the bank was recorded at Rs 3,004.68 crore. In the previous financial year, the bank had a total income of Rs 753.36 crore. The total income for the year was Rs 45,185.04 crore. Income in the preceding fiscal was at Rs 24,717.43 crore.


On the asset quality front, the bank's gross non-performing assets (NPAs) or the bad loans stood at 9.85 per cent of the gross advances by end of March 31, 2021. It was 6.87 per cent by March 2020.


In value terms, the gross NPAs of the bank stood at Rs 38,455.35 crore as against Rs 14,150.84 crore.


Net NPAs too rose at 3.37 per cent (Rs 12,271.13 crore) from 3.13 per cent (Rs 6,184.24 crore).


The bank made provisions for bad loans and contingencies worth Rs 1,752.48 crore for the March 2021 quarter. In the year-ago period, it was Rs 1,891.86 crore.


The board of directors of the bank has recommended a dividend of Rs 2 per equity share for the financial year 2020-21, the bank said.

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Indian Bank Q3 Profit more than doubles

 


State-owned Indian Bank on Friday reported more than doubling of its profit at Rs 514.28 crore for the third quarter ended December 2020. The bank's profit in the year-ago period stood at Rs 247.16 crore.

Total income during the quarter under review was Rs 11,421.34 crore, up from Rs 6,505.62 crore in the same period a year ago, Indian Bank said in a regulatory filing.

However, the bank's gross non-performing assets (NPAs) as a percentage of assets rose to 9.04 per cent during October-December 2020-21 from 7.20 per cent in the year-ago period.

The percentage of net NPA was lower at 2.35 per cent as against 3.50 per cent.

The bank further said it had made provisioning of Rs 2,314.35 crore towards bad loans and contingencies as against Rs 1,529.26 crore in the same quarter a year ago.

During the quarter ended December 31, 2020, the bank raised additional tier-1 capital in three tranches aggregating to Rs 2,000 crore through private placement of Basel III compliant AT 1 Perpetual Bonds.

Non-performing loan provision coverage ratio is 86.51 per cent as on December 2020, it said.

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Indian Bank Q2 net profit rises 15%


State-owned Indian Bank on Thursday reported a 15 per cent rise in net profit at Rs 412.28 crore for the second quarter ended September, despite increase in provisions for bad loans. The bank's net profit in July-September quarter of 2019-20 stood at Rs 358.56 crore.

The results are not strictly comparable with that of previous year's as Kolkata-based Allahabad Bank merged with Indian Bank on April 1, 2020.

Indian Bank's total income rose to Rs 11,669.11 crore during September quarter this year from Rs 6,045.32 crore in the same period of the previous fiscal, it said in a regulatory filing.

On asset quality front, gross non-performing assets (NPA) rose to 9.89 per cent of gross advances at the end of September 2020 from 7.20 per cent a year ago.

However, net NPA declined to 2.96 per cent of the advances at the end of second quarter of this fiscal from 3.54 per cent a year ago.

The bank's provisioning for bad loans and contingencies rose to Rs 2,284.11 crore during July-September quarter from Rs 909.36 crore in the corresponding quarter a year ago.

Provisioning for bad loans alone doubled to Rs 1,880.19 crore at the end of September 2020 from Rs 720.90 crore a year ago.

Provision coverage ratio rose to 84.39 per cent as on September 30, 2020.

The Chennai-based lender said the extent to which the COVID-19 pandemic will impact the bank's results will depend on future developments, which are highly uncertain.

Indian Bank's capital and liquidity position is strong and would continue to be the focus area, it said.

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Indian Bank Q1 results: Profit rises marginally, asset quality declines

State-owned Indian Bank on Friday reported a marginal 1 per cent rise in its standalone net profit at Rs 369.26 crore in the first quarter ended June 2020. Its net profit stood at Rs 365.37 crore in the same period a year ago. Sequentially, the lender had posted a net loss of Rs 217.73 crore in preceding quarter ended March 2020.

Total income of the bank almost doubled to Rs 11,446.71 crore during the April-June period of 2020-21 from Rs 5,832.12 crore in the year-ago same period, Indian Bank said in a regulatory filing.

With regard to June 2019 quarter and sequential January-March 2020 period numbers, the bank said the figures are related to standalone Indian Bank financials for pre-amalgamation period, hence not comparable with post amalgamation financials for the quarter ended June 30, 2020.

Allahabad Bank was merged into Indian Bank with effect from April 1, 2020.

Asset quality of the bank witnessed worsening with the gross non-performing assets (NPAs) rising to 10.90 per cent of the gross advances as on June 30, 2020 as against 7.33 per cent by the year-ago same period.

In value terms, the gross NPAs stood at Rs 39,965.02 crore as against Rs 13,511.21 crore.

Net NPAs or bad loans on the other hand came down to 3.76 per cent from 3.84 per cent. In value terms, they were higher at Rs 12,754.74 crore as on June 30, 2020 as against Rs 6,824.24 crore by June 2019.

Bank's provisioning for bad loans and contingencies for the June quarter of FY'21 rose to Rs 2,139.12 crore from Rs 794.82 crore parked aside for the same quarter of FY'20.

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Indian Bank Q4 results: Posts net loss of Rs 218 crore


Public sector lender Indian Bank has slipped into the red in the fourth quarter with Rs 218 crore net loss on account of higher provisions. It had made profits in the previous three quarters while suffered Rs 190 crore loss in the year ago period.

Its operating profit rose 37 per cent at Rs 1,703 crore compared with Rs 1,245 crore in the year ago period. Total income rose 14 per cent at Rs 6,334 crore over Rs 5,538 crore with net interest income growing at the same rate at Rs 2,003 crore.

The year-on-year loss widened due to 34 per cent higher provisions and contingencies which was seen at Rs 1,921 crore, the bank said.

The bank has shown improvement in asset quality with gross non-performing assets ratio falling to 6.9 per cent at the end of March from 7.11 per cent, while the net ratio was at 3.1 per cent from 3.75 per cent.

Its total business grew 8 per cent to Rs.4.66 lakh crore, contributed by 19 per cent credit growth to Rs.2.06 lakh crore and 7 per cent deposits growth to Rs 2.60 lakh crore. Growth in advances was led by the retail sector which grew 16 per cent and well supported by agriculture and the MSME sector with a growth of
14 per cent and 13 per cent respectively.

Allahabad Bank was merged with Indian Bank effective from April.

"The amalgamated entity would leverage on the combined strengths of both the banks to post impressive growth in FY21," Indian Bank chief executive Padmaja Chunduru said.
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Merger News: Mega merger of 10 PSU banks takes effect; all you need to know

The merger of ten government-run banks into four will come into force from April 1. The branches of the merging banks will operate as branches of the banks in which they have been merged. Customers of merging banks will also now be treated as customers of the banks in which these banks have been merged. The banks' merger was announced last year in August and the union cabinet gave the final approval on March 4. In the past, various other bank mergers have taken place. For instance, in 2017, the country's largest public lender - the State Bank of India took over five of its associates and Bharatiya Mahila Bank. Last year, Vijaya Bank and Dena Bank were merged with Bank of Baroda. Kotak Mahindra Bankcand ING Vysya Bank merger and amalgamation of Centurion Bank of Punjab Ltd. with HDFC Bank took place in 2014 and 2008, respectively.

Here are a few aspects of the PSU bank merger:
1. As per the latest merger- Oriental Bank of Commerce (OBC) and United Bank of India (UBI) will be merged with Punjab National Bank (PNB). The merged entity will become the second-largest state-run bank. The new entity will have a business of Rs 17.95 lakh crore and 11,437 branches.

2. The amalgamation of Syndicate Bank into Canara Bank will create the fourth-largest public sector bank with Rs 15.20 lakh crore business and a network of 10,324 branches.

3. Allahabad Bank branches will operate as those of the Indian Bank. The merger of Allahabad Bank with the Indian Bank will create the seventh-largest public sector bank with Rs 8.08 lakh crore business.

4. Branches of Andhra Bank and Corporation Bank will function as the branches of Union Bank of India. Andhra Bank and Corporation Bank's merger with Union Bank of India will create India's fifth-largest public sector bank with Rs 14.59 lakh crore business and 9,609 branches.

5. The government had front-loaded Rs 68,855 crore to take care of the bank-merger plan.

6. Punjab National Bank was given Rs 16,091 crore, Union Bank of India Rs 11,768 crore, Canara Bank Rs 6,571 crore and Indian Bank Rs 2,534 crore. Allahabad Bank was provided Rs 2,153 crore, United Bank of India Rs 1,666 crore, Andhra Bank Rs 200 crore, Indian Overseas Bank Rs 4,360 crore and UCO Bank Rs 2,142 crore.

7. According to the government, the merger of the 10 banks will lead to the creation of stronger establishments. This merger would follow in the example of the amalgamation of Bank of Baroda, Vijaya Bank, and Dena Bank last year.

8. With this mega-bank mergers, the number of PSBs will get consolidated from 27 banks in 2017 to 12 banks in 2020.

9. The new 12 public sector banks will be -- six merged banks and six independent banks. State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Union Bank of India, Indian Bank will be the six merged banks. And Bank of India(BoI), Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab and Sind Bank, which have a strong regional focus, will remain independent entities.


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PSU banks announce share-swap ratios ahead of April 1 merger

Following the footsteps of State Bank of India and Bank of Baroda, the boards of 10 public-sector banks on Thursday approved mergers and issued share-swap ratios to create four large banks in the economy.
The four anchor banks will be Punjab National Bank, Canara Bank, Union Bank of India, and Indian Bank. The merger will be effective from April 1.
Last year, Bank of Baroda took over Vijaya Bank and Dena Bank. Before that, State Bank of India (SBI) had merged all its five associate banks with itself to enter the global top 50 banks’ list in terms of size. Punjab National Bank (PNB) will merge with United Bank of India and Oriental Bank of Commerce to create the largest bank in the country after State Bank of India.

According to notifications to the stock exchanges, Delhi-based PNB will issue 1,150 shares for 1,000 shares of Oriental Bank of Commerce, and 121 shares for 1,000 shares of United Bank of India.
Mumbai-based Union Bank of India will take Andhra Bank and Corporation Bank. Union Bank of India will issue 325 shares for 1,000 shares of Andhra Bank, and 330 shares for 1,000 shares of Corporation Bank.
Bengaluru-based Canara Bank will issue 158 shares for 1,000 shares of Syndicate Bank.
Allahabad Bank said for every 1,000 shares (face value Rs 10) of Allahabad Bank, there would be 115 shares (face value Rs 10) of Indian Bank.
The Union Cabinet had approved the consolidation to build the mega banks “to create more efficient and bigger public sector banks in the challenging environment to meet the credit needs of a growing economy and to achieve operational efficiency by scale of business”. The amalgamation will lead to a wide geographical reach, technology adaption, and, more importantly, better utilisation of scarce capital.
A grievance redress system has been put in place, and a committee has been formed headed by a retired judge. If shareholders have any issue with the swap ratio — for example, if they feel they didn’t get enough time or if they need information — they can raise it. This is the board-approved swap ratio.
“After the committee receives all the grievances, it will have seven days to recommend changes, if needed, which will be the final swap ratio,” said a top official of a PSB to be merged.
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Indian Bank Q3 profit jumps 62%

State-owned Indian Bank on Friday reported 62.3 percent jump in net profit at Rs 247.16 crore for December quarter 2019-20, mainly due to reduction in bad loans.

The bank's profit in the year-ago period stood at Rs 152.26 crore. Total income during the quarter under review was  Rs 6,505.62 crore, up from Rs 5,269.10 crore in the same period a year ago, Indian Bank said.

The bank's net non-performing assets (NPAs) as a percentage of assets reduced to 3.5 percent during October-December 2019-20 from 4.42 percent in the year-ago period.

Similarly, the percentage of gross NPA was lower at 7.2 percent as against 7.46 percent.

In absolute terms, net NPAs stood at Rs 6,487.58 crore. This compares with Rs 7,571.07 crore in the third quarter of
the last financial year.

The bank further said it had made provisioning of Rs 1,529.26 crore towards bad loans and contingencies. During
October-December 2018-19, the provisioning stood at Rs 923.67 crore.

The bank has provided Rs 1,004 crore for divergence in provisioning and also re-classified three standard accounts
amounting to Rs 184 crore as fresh NPA, Indian Bank said.

Briefing reporters, Indian Bank Managing Director and CEO Padmaja Chunduru said the third-quarter results were very
much in line with expectations.

"If you recall last quarter also we were talking of building the balance sheet strength and its resilience. I think that is very visible this quarter because there is secular growth across all verticals," she said.

To a query, she said the fresh NPA was from an account of DHFL and added the bank has more control over such accounts.

She said the net interest income and other income were under control while gross NPA was maintained at the same level of last quarter.

Chunduru said the bank during the quarter surpassed the Rs 4 lakh crore business mark during the quarter ending
31 December 2019.

Following the Centre's move to merge Indian Bank with Allahabad Bank, she said the business mark would double in
size by June 2020.

"The growth in business has been faster in the last two years and we expect it would be very fast going forward also,"
she said.

Asked if a name has been decided following the merger with Allahabad Bank, Chunduru said "we have discussed with
Allahabad Bank, we are discussing with our own staff and their staff."

"The name would be acceptable to everyone and would be something reflecting the country's own ethos. As of now Indian Bank name appeals to everyone," she said.

She said information technology major Tata Consultancy Services has been roped in as the IT partner for both the

banks (Indian Bank and Allahabad Bank) as the core banking system of both the banks were on same platform.
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Indian Bank Q2 net profit more than doubles


Indian Bank on Wednesday said its second quarter net profit more than doubled on higher other income and a decline in provisioning.

The bank posted a net profit of ₹358.56 crore for the three months ended 30 September compared with ₹150.14 crore in the year-ago period.

Profit was higher than the Bloomberg poll of five analysts, which had estimated a loss of ₹328.10 crore.

Other income, which includes core fee income, rose 72.22% to ₹737.65 crore in the three months from ₹428.32 crore a year ago.

Provisions during the quarter decreased 9.46% to ₹909.37 crore as against ₹1004.34 crore in the year-ago quarter. In Apr-Jun, the bank had set aside ₹794.82 crore in provisions.

Net interest income, or the difference between interest earned on loans and that paid on deposits, increased 7.63% to ₹1863.04 crore from ₹1730.93 crore in the corresponding period last year.

Gross non-performing assets (NPA), as a percentage of total advances, were at 7.2% in the September quarter compared with 7.33% in the June quarter and 7.16% in the year-ago quarter.

Post provision, the net NPA ratio was at 3.54% against 3.84% in the Apr-Jun quarter and 4.23% in the year-ago quarter.


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Indian bank Q1 result, net profit up 74%


Indian Bank on Monday posted a 74.55 per cent jump in its net profits for the April-June quarter. According to a top official, it recorded a net profit of Rs 365.37 crore.

Indian bank recorded net profits at Rs 209.31 crore during the corresponding quarter the previous year.

For the year ending March 31, 2019 the net profits were at Rs 321.95 crore.

Declaring the financial performance, Indian Bank managing director and Chief Executive Officer (CEO) Padmaja Chunduru said it is one quarter posting strong results.

“The bank has posted a healthy growth in all segments,” she told reporters.

On the total income for the April-June quarter, she said it grew to Rs 5,832.11 crore from Rs 5,131.96 crore registered the same period last year.

For the year ending March 31, 2019 total income of the bank was at Rs 21,067.70 crore.

On the 74.55 per cent jump in the net profits, Chunduru said they have been the highest strong point of this quarter.

“There is a 75 per cent increase (in net profits). This is because of arrest in fresh slippages, increase in recovery.

I think, we are back on track. We have been working on arresting fresh slippages,” she said.

According to her, the slippages were Rs 1,035 crore for the quarter under review period.

She said the bank has set a target of bringing down the slippages to around Rs 800-Rs 900 crore in the coming quarters.

“There is growth in RAM (retail, agriculture and micro, small and medium enterprises segments) with 25 per cent in retail, 25 per cent in agriculture and 10 per cent in micro, small and medium enterprises (MSMEs).

The overall capital adequacy ratio is at 13.62 per cent. This is what gives us more comfort and confidence. We are building assets in a very prudent way”, she said.

Noting that the bank witnessed over 300 per cent rise in transactions made through mobile banking, she said the bank planned to ramp up transactions made through the digital platform.

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Five PSU banks have over 70% NPA from industry in FY19


The non-performing assets (NPAs) in the industry sector accounted for over 50 per cent of the total bad debts in 18 of the 20 state-run banks in 2018-19, indicating the massive concentration risk still facing the banking sector.

Five state-run banks reported that bad debts from industry contributed more than 70 per cent of their total NPAs, according to Reserve Bank of India (RBI) data presented by the Finance Ministry to the Lok Sabha Monday.

Alarmingly, of these five banks, four are relatively smaller ones.

Andhra Bank had the highest share of industry bad debts at 86 per cent, followed by United Bank of India (UBI) at 78 per cent and Indian Bank at 74 per cent.

The country’s largest bank, State Bank of India (SBI) had 73 per cent of its bad debts from the industry sector, followed by Allahabad Bank at 70 per cent.

Only two banks saw the share of industry NPAs at less than 50 per cent — Syndicate Bank and Bank of India at 36 per cent and 49 per cent, respectively.

Industry issue
Basic metals and metal products, gems and jewellery, engineering, vehicles, construction and textiles have been the major groups within industry seeing high levels of stress, RBI had pointed out in its December 2018 report of trends and progress in banking in India.

In 2017-18, even though industry received 37.3 per cent of total loans and advances by all the banks, it contributed to about three-fourth of the total NPAs.

However, with resolution under the Insolvency and Bankruptcy Code (IBC) picking up pace in 2018-19, industry NPAs have been coming down and banks have been making better recoveries.

The gross NPAs of state-run banks as of March 2019 was at Rs 8.06 lakh crore, as against Rs 8.95 lakh crore in the year-ago period.

Steps taken to resolve bad debts
The Modi government has announced many steps over the last few years to tackle the burgeoning bad debt problem. These include enactment of the IBC, amendments to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, staffing the debt recovery tribunals, and asking banks to crack down on defaulters.

However, despite all these steps, resolution of bad debts has been a slow process, forcing the Modi government to go in for a massive bank capitalisation drive to ensure that state-run banks do not breach any regulatory capital requirements.

The government has also accelerated the bank consolidation drive by merging a big banks with smaller, lesser-performing ones to create a large competitive entity. The government merged State Bank of India with its associate banks and followed it with the merger of Bank of Baroda, Vijaya Bank and Dena Bank.
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Indian Bank opposes merger with OBC, says has well-laid out plan for 3 years

Oriental Bank of Commerce (OBC) may have floated the idea of a merger of two other state-run lenders – Indian Bank and Corporation Bank – into itself, but the Chennai-based bank doesn't seem to be interested. In a statement on Wednesday, Indian Bank said its board doesn't have any such proposal, showing its intent against any such potential merger into OBC should the government ask for its view. “There is no such proposal with the board of the bank,” it said. “The bank has a well-laid out business plan for the next three years, with a clear visibility on growth, earnings and asset quality that create significant value for all its stakeholders.”

Banking sources had told FE that OBC had sought the finance ministry's approval to combine with Indian Bank and Corporation Bank. The ministry would consider OBC's proposal and take a view soon, one of the sources had said.

OBC – which was facing restrictions under the central bank's Prompt Corrective Action (PCA) framework until early February – recorded a net profit of Rs 201.5 crore in the March quarter, compared with a net loss of Rs 1,650.22 crore a year earlier. Even sequentially, the profit surged 39%.

However, Corporation Bank's losses zoomed to Rs 6,581.49 crore during the fourth quarter of FY19, against Rs 1,838.39 crore a year before. Indian Bank saw a net loss of Rs 190 crore in the March quarter, against a net profit of Rs 132 crore in the same period last year.

While the headquarters of OBC is in Gurugram, those of Corporation Bank and Indian Bank are in Mangalore and Chennai, respectively.

Indian Bank's net NPA ratio was the lowest of the three – 3.75%, against OBC's 5.93% and Corporation Bank's 5.71%. At 11.29%, Indian Bank's tier-i capital was higher than OBC's 9.98% and Corporation Bank's 10.52%.
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