Indian Bank Q2 Results: Net profit rises 11.5% to Rs 3,018 crore as asset quality improves

State-owned Indian Bank reported a modest 11.5% rise in net profit at Rs 3018 crore for the second quarter to September 30, as compared with Rs 2706 crore in the year ago period, on account of single digit increase in earnings even as its provisions stood lower.

The bank's operating profit stood 2.3% higher at Rs 4837 crore against Rs 4729 crore. Net interest income rose by about 6% at Rs 6551 crore. Other income rose by about 3% at Rs 2487 crore. Total provisions were lower at Rs 739 crore as compared with Rs 1099 crore.

The net interest margin for the quarter stood at 3.23% against 3.39% in the year ago period.

"The pressure on NIM will continue in the third quarter when a majority of the repricing of the MCLR-linked loans takes place. There will be repricing of deposits too but repricing of loans will outweigh that," managing director Binod Kumar told ET.

The bank's advance grew 12.7% year-on-year to Rs 6.20 lakh crore while total deposits expanded by 12% to Rs 7.77 lakh crore. The low cost current and savings account ratio to total deposits fell to 38.9% at the end of September from 40.5% a year back refelcting the challenge banks are facing in low-cost deposit mobilisation.

Its gross non-performing assets ratio fell to 2.6% at the end of the reporting cycle from 3.48% a year back. Net NPA stood at 0.16% against 0.27%.

The bank's share price fell 0.47% to Rs 771.65 on BSE.