Indian Bank conducted a conference call on 06 May 2024 to discuss its financial results for the quarter ended March 2024. Shanti Lal Jain, MD&CEO of the bank addressed the call:

Highlights:

 Business of the bank has increased by 12% driven by 13% growth in advance and 11% growth in deposits.

The bank has maintained the CASA ratio above 40%.

The retail, agriculture and MSME (RAM) loan book has expanded by 14% end March 2024, while its share in loan book has increased to 62% from 61% a year ago.

As per the bank, about 78% of the crop loan is a gold loan.

Within the RAM loan book, the retail loan book has expanded 15% and the agriculture by 19% end March 2024.

The grass NPA has reduced to 3.95% and net NPA to 0.43% end March 2024, while the bank has maintained a strong provision coverage ratio of 96.3%.

The fresh slippages of loans was at Rs 1238 crore, of which MSME segment witnessed slippages of Rs 644 crore, agriculture Rs 508 crore and retail Rs 126 crore  in Q4FY2024. The slippages from the restructured loan book were at Rs 124 crore.

There is reduction in the Tier II capital on account of the repayment of the bonds with sufficient liquidity. The bank has witnessed 100 bps improvement in capital on account of capital raise but there was impact of 57 bps on account of RBI guidelines.

The capital adequacy is sufficient to take care of 12 to 13% credit growth in FY25.

The bank continues to record higher recoveries and upgradations than slippages of loans.

The recoveries and upgradations stood at Rs 8800 crore compared with fresh slippages of Rs 6700 crore in FY2024.

The bank has witnessed recovery of Rs 2850 crore from the AUC accounts in FY2024.

The bank has transferred 6 accounts with exposure of Rs 3000 crore to NARCL, while the bank has received bids four accounts and five accounts are under process.

The share of digital transaction has increased to 89% end March 2024 from 85% end March 2023.

Standard asset provisions of the bank stands at Rs 7900 crore .

The bank is expecting the operating expenses of Rs 9000 crore for FY2025.

The bank expect margins to be maintained 3.3-3.4% for FY25

Credit cost is expected to be low given low net NPAs and marginal SMA loan book.

The written off of the bank stands at Rs 39000 crore, while the bank is targeting recoveries and upgradations of Rs 7000 to 8000 crore for FY202.

About 60% of the loan book of the bank is linked to the MCLR.