Indian Bank

After the Bank announced its Q3FY13 numbers, it was the top loser on the BSE. The stock tumbled down after the Bank posted a set of dismal numbers for Q3FY13. Both – its performance as well as asset quality had deteriorated. NII at Rs 1,143.5 crore, down over 2% (YoY) and net profit slipped to Rs.331 crore, down by a sharp 37%. Sequentially, Gross NPA rose from 2.06%to 3.18% and Net NPA too rose sharply from 1.33% to 2.17%. Capital adequacy ratio at end of Q3 stood at 13.07%.

The Bank has explained that lower profit was due to a provision of Rs. 40 crore towards pension corpus, adhoc provision of Rs. 15 crore towards expected wage revision and an extra allocation of Rs. 96 crore towards restructured assets. Also the YoY base effect is at work as net profit of Q3Fy13 included a credit of Rs. 52.33 crore due to reversal of provision in respect of tax liability and it earned a profit of Rs.51 crore from forex portfolio.  For 9MFy13, the company has said that it has made an NPA recovery of Rs 442 crore plus upgradation of NPAs to standard accounts to the tune of Rs 360 crore. And thanks to the easing by RBI, the bank would be left with an additional Rs 330 crore. Having enough capital, it does not expect and need any capital infusion from the Govt. Following RBI’s rate cut, it has reduced the base rate by 30 bps to 10.2% and a 25 bps cut in its BPLR (benchmark prime lending rate) to 14.50%, effective February 9.