Indian Bank Gross Advances Saw Growth of 12.7% YoY to Rs 5.4 Lakh Crore

Indian Bank, a prominent public sector lender, has demonstrated notable growth in its financial metrics for the April–June quarter of FY24. The bank’s provisional figures reveal significant advancements across various sectors, highlighting its strong performance in the current fiscal year.

Significant Increase in Gross Advances and Total Business

According to the business update released by Indian Bank, the gross advances increased by 12.7% on a yearly basis, reaching Rs 5.40 lakh crore in the April–June quarter. This substantial growth in advances underscores the bank’s ability to expand its lending operations effectively.

The bank’s total business saw an impressive year-on-year rise of 10.9%, amounting to Rs 12.21 lakh crore for the quarter-ended June. In comparison, the total business stood at Rs 11.01 lakh crore during the same quarter last year. This growth trajectory illustrates Indian Bank’s continued expansion and market penetration.

Deposits and Fundraising Initiatives

Indian Bank reported a commendable 9.5% increase in total deposits, which reached Rs 6.81 lakh crore in Q1 FY25, compared to Rs 6.22 lakh crore in the corresponding period of the previous year. The growth in deposits indicates a robust customer base and trust in the bank’s financial stability.

In May, the board of directors approved a proposal to raise up to Rs 12,000 crore through equity and debt, aimed at further strengthening the bank’s capital base and supporting its future growth plans.

Performance in Q4FY24 and FY24

The bank’s financial performance in Q4 FY24 and the entire FY24 highlights significant growth across various metrics:

Business Growth: 12%

Deposit Growth: 11%

Credit Growth: 13%

In the deposit segment, Current Account (CA) deposits grew by 8%, while savings deposits increased by 7%. The domestic CASA (Current Account Savings Account) ratio was maintained above 42%, showcasing the bank’s strong deposit mobilization capabilities.

Sector-wise Credit Growth

Indian Bank witnessed notable growth in its credit portfolio:

Retail Credit: 15%, driven by a 49% increase in auto loans and an 11% rise in housing loans.

Personal Loans: 10%

Agriculture Credit: 19%, mainly due to a 27% increase in gold loans within crop loans.

Investment Credit: 10%

Agri Allied: 62%

MSME Credit: 6%, with standard MSME growing by 10%

Corporate Credit: 10%

Profitability and Income Growth

Indian Bank’s profitability witnessed substantial growth:

Net Profit for FY24: 53%

Profit Before Tax (PBT): 85%

Net Interest Income (NII): 15%

Non-Interest Income: 10%

Additionally, trading profit surged by 127%, fee-based income by 11%, PSLC commission by 37%, and miscellaneous income by 27%. Despite the rise in expenditure, mainly due to a 23% increase in salary expenses and digitization costs, the bank’s overall profitability improved significantly.

Improvement in Asset Quality

The bank’s asset quality showed remarkable improvement:

Gross NPA: Reduced from 11.39% at the start of the amalgamation journey to 3.95%

Net NPA: Reduced to 0.43%

Provision Coverage Ratio: Improved to 95%-96%

Stock Performance

On Monday, Indian Bank’s share price was down by 1.05% at Rs 533.20. The stock opened the session at Rs 538.85 and reached an intraday high of Rs 540. Despite the minor dip, the stock has gained approximately 27% in 2024.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.