IL&FS provision hits Indian Bank

Lender records Q4 loss; recovers ₹585.84 crore from an account with the NCLT

Public sector lender Indian Bank reported a standalone net loss of ₹189.77 crore during the fourth quarter ended March 2019 against a net profit of ₹131.98 crore in the year-earlier period, on higher provisioning towards bad loans.

“We have posted a net profit on a consolidated basis,” said Padmaja Chunduru, MD and CEO, Indian Bank.

“The loss on standalone basis was due to one-time higher provisioning of ₹220 crore made towards IL&FS and another company.”

“In the case of IL&FS, it is a running account and resolution is yet to happen. We have made 98% provision in the second account. Initially, the provisioning for these accounts was not there. All issues have been resolved. I am confident this would be a stable base from which the bank will grow. Our assets are well guarded and well provided for,” she said.

When it was pointed out that the bank’s full year net profit on a consolidated basis had dipped to ₹320.93 crore from ₹1,262.92 crore, she said it was due to depreciation on investment of ₹700 crore and lower profit on sale of investment worth ₹427 crore respectively.

Fresh slippages had been coming down sequentially, she added. During the quarter, total income stood at ₹5,537.47 crore against ₹4,954.21 crore.

Fall in net NPA

Gross non-performing assets reduced marginally to 7.11% of the gross advances from 7.37% while net NPAs came down to 3.75% from 3.81%.

The overall provisioning and contingencies for the March 2019 quarter were at ₹1,638.83 crore, higher than the ₹1,546.34 crore a year ago. Of this, the provisioning for bad loans was ₹1,432.94 crore against ₹1,772.03 crore. in the year-ago quarter.

During the year ended March 2019, the bank recovered ₹585.84 crore from one of the accounts by way of NCLT settlement. It also appropriated the recovery of ₹94.61 crore in a fully provided for NPA account.

For the provisions of the Insolvency and Bankruptcy Code, the bank is holding a total provision of ₹83.07 crore. Non-performing loan provision coverage ratio was 65.72%.

Ms. Chunduru said that global deposits for the year grew 16%, advances 15%, current account and savings account (domestic) 9%.

The bank had a well diversified loan book with retail, agriculture and micro, small and medium entreprises accounting for 58% and corporate 42%.

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