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Indian Bank reported in line net interest income growth of 3% YoY. However, pre provision operating profit surpassed our expectation by a huge margin (24% higher), benefitting from higher recovery in bad debt and rise in forex and treasury income.
Profitability continued to benefit from tax write-backs for the second consecutive quarter.
Despite the sequential decline in gross non performing asset ratio by 15 basis points driven by corporate upgrades which underwent restructuring in Q1, Indian Bank’s asset quality trends were weak with elevated slippages at 4.9%, rise in total restructured book to 3.2% including those restructured under resolution plan 2.0, and sharp fall in collections from retail/micro small and medium enterprise portfolios in June-21 versus March-21.
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