State-owned Indian Bank has clocked 55.86 per cent growth in its net profit at Rs 861.33 crore for the financial year ended March 31, 2020, as compared to Rs 380.13 crore in the previous fiscal. For the fourth quarter of fiscal 2020, the public sector lender reported a net loss of Rs 217.7 crore as against loss of Rs 190 crore in the year-ago period due to higher provisions.
For FY20, Indian Bank's total income increased to Rs 24,726.78 crore from Rs 21,073.50 crore in the financial year ended March 31, 2019. In January-March quarter of FY20, Indian Bank, which has merged Allahabad Bank with itself, posted total income of Rs 6,334.36 crore compared to Rs 5,537.46 crore during same period last year.
Net Interest Income (NII), or the core income a bank earns by giving loans, rose 13.6 per cent to Rs 2,002.7 crore in Q4 FY20 from Rs 1,763.5 crore in the corresponding period last year. Other income increased to Rs 841.6 crore from Rs 569.6 crore in the year-ago period.
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The Chennai-based bank's provisions stood at Rs 1,891.9 crore in Q4 FY20 as against 1,638.8 crore in Q4 FY19 and Rs 1,529.3 crore in December quarter of FY20. Non-Performing Loan Provision Coverage ratio was 73.05 per cent as of March 31, 2020.
On the asset quality front, gross non-performing assets (GNPA) rose by 2.1 per cent to Rs 14,150.8 crore from Rs 13,862.3 crore in the previous quarter. Gross NPA as a percentage of gross advances fell by 30 basis points (bps) to Rs 6.88 per cent from 7.21 per cent, while net NPA fell by 40 bps to 3.13 per cent from 3.5 per cent.
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The bank in its financial audit report has declared no dividend to be proposed for FY20, in line with the Reserve Bank of India's circular on divided payment. The RBI on April 17, 2020, had announced that banks will not make any further dividend payouts from profits pertaining to the financial year ended March 31, 2020 until further instructions, with a view that banks must conserve capital in an environment of heightened uncertainty caused by COVID-19.
On impact of COVID-19 crisis on its result, Indian Bank said that the extent to which the pandemic will affect the financial performance will depend on future developments, which are highly uncertain. "The situation continues to be uncertain and the bank is evaluating the situation on an ongoing basis," it said.
Major challenges for the bank would be from extended working capital cycle and reduced cash flows. The bank's capital and liquidity position is strong and would continue to be the focus area for the Bank during this period, it added.
Following Q4 earnings, shares of Indian Bank closed Tuesday's trade at Rs 68.90 apiece, up 7.07 per cent, on the Bombay Stock Exchange.