Indian Bank Q3 net down 20% as provisioning rises

Indian Bank has reported a 20% drop in net profit at Rs 264.50 Cr for the quarter ended December 31, 2013, against Rs 330.58 Cr in the corresponding previous-year period. T. M. Bhasin, Chairman and Managing Director of the bank, attributed the drop in net profit to additional provisions of around Rs165 Cr made towards pension fund and gratuity. The bank’s gross non-performing assets (NPA) grew to 3.42% (Rs 3,834.78 Cr) during the quarter, from 3.18% (Rs 3,180.12 Cr) in the same period of last year. The net NPA too rose to 2.25% (Rs 2,483.60 Cr) from 2.17% (Rs 2,141.86 Cr). However, Bhasin said the bank has made a robust recovery of 539 Cr during the quarter. The gross NPA has come down to 3.42%, from 3.76% for the quarter ended September 2013, aided by their sale to asset reconstruction companies. The bank has a provision coverage of 57.99%. During the quarter, non-performing assets aggregating to Rs 389.97 Cr (net of provisions) were sold to asset reconstruction companies for Rs 675.71 Cr. Bhasin said, in addition to the above, the bank has identified 19 large-value accounts (totalling around 300 Cr) to sell to ARCs.