Expect year on year loan growth of around 12 percent by end of Q4: Indian Bank

Indian Bank in the third quarter ended December, 2019 reported higher year on year (YoY) other income growth up by 133.3 percent at Rs 1038.6 crore and was up quarter on quarter (QoQ) by 40.8 percent. Other income aided topline growth for the bank. Operating profit was up 67.4 percent YoY at Rs 1918.8 crore and up 27.8 percent QoQ.

However, loan growth for the quarter was weak down 0.8 percent QoQ. Sharing further details, Padmaja Chunduru, managing director and CEO, Indian Bank, said, "This quarter has been really good for Indian Bank. It has shown improvement in all the spheres, whether it is business, income, profitability and assets quality."

The overall loan book has actually gone up. It is only the corporate loan book that declined, she said. "The overall advances have grown by almost 9 percent year-on-year (YoY). Retail, agriculture, MSME have shown a good growth 20 percent, 19 percent, 13 percent respectively, and only the corporate that has shown a de-growth," she added.

Going forward, in the last quarter, we expect enough approvals to be in place. The off-take should happen and so, we expect the loan growth to be at least 12 percent YoY, said Chunduru.

On the asset quality front, she said, "The gross non-performing assets (NPA) had actually come down from Rs 13,981 crore to Rs 13,862 crore, while the additional fresh slippages were Rs 2,138 crore, mainly because of one big chunky account of DHFL of Rs 1,325 crore. So, if one were to net that off, then actual slippages have been reduced and much in-line with last quarter."

"So the bank is in a situation where the retail, agriculture and MSME (RAM) slippages are much in control. Corporate also is placed better for the quarters ahead,” she added.

Moreover, there has been a Rs 350 crore recovery and a Rs 100 crore upgradation, she said, adding that there has also been a write-off of Rs 1,700 crore. "So, net-net the gross NPA percentage is retained at 7.2% as of last quarter and the net NPA has come down 4 basis points (bps) to 3.5 percent,” she stated.