In This Article:
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Business Growth: Overall business growth of 10%.
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Deposit Growth: Deposits increased by 8%.
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Credit Growth: Credit grew by 12%, with retail credit up by 15%, agriculture by 16%, MSME by 8%, and corporate by 9%.
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CASA Ratio: Maintained at 40.47%.
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Operating Profit: Increased by 10%.
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Net Profit: Grew by 36%.
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NII Growth: Net Interest Income increased by 8%.
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Bad Debt Recovery: Improved by 44%.
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Gross NPA: Reduced from 3.77% to 3.48%.
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Net NPA: Decreased with a provision coverage ratio increase from 96.6% to 97.7%.
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ROA: Improved from 1.06% to 1.33%.
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ROE: Increased to 21%.
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Cost Income Ratio: Slightly increased to 45%.
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Capital Adequacy Ratio: 16.55%, rising to 17.84% with half-yearly profit.
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Collection Efficiency: Maintained at 95%.
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Digital Transactions: 91% to 92% of transactions are digital.
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UPI Users: Increased by 27% year-over-year.
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Net Banking Users: Grew from 98 lakh to 1.11 crore.
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Credit Card Users: Increased by 50% from 1.77 lakh to 2.65 lakh.
Release Date: October 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Indian Bank (BOM:532814) reported a 36% increase in net profit, driven by an 8% growth in net interest income and a 44% recovery in bad debts.
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The bank's business grew by 10%, with credit growth at 12% and retail credit increasing by 15%.
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Asset quality improved, with gross NPA reducing from 3.77% to 3.48% and net NPA decreasing, supported by a provision coverage ratio increase from 96.6% to 97.7%.
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The bank maintained a strong capital adequacy ratio of 16.55%, which increases to 17.84% when including half-yearly profits.
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Digital transformation initiatives have been successful, with 91% to 92% of transactions now occurring digitally, and significant growth in UPI users and net banking users.
Negative Points
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Business growth in the first half of FY25 was relatively low, with deposit growth at only 0.75% and credit growth at 3.16%, raising concerns about meeting full-year targets.
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The SMA book increased slightly due to a large government-guaranteed account, indicating potential stress in certain segments.
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The bank's reliance on borrowings has increased, which could impact liquidity and financial stability if not managed carefully.
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There is a need to raise significant deposits and disburse substantial credit in the remaining months to meet annual targets, posing a challenge.
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The housing finance book saw a significant reduction, with a major account being prepaid, impacting the overall loan book mix.
Q & A Highlights
Q: What is the roadmap for achieving the growth targets in deposits and credit for FY 25, given the current growth rates? A: Shri Shanti Lal Jain, MD & CEO, explained that the growth in the first half is on track with previous trends. The bank has sanctioned 20% more than last year, with a strong pipeline of undisbursed term loans and working capital limits. The focus remains on profitable growth rather than just credit growth.