Indian Bank benefits from restructuring

By Our Corporate Reporter

CHENNAI, APRIL 28. Indian Bank has achieved the targets set out in its three year restructuring plan in relation to recovery of non-performing assets, growth in deposits and advances and realising higher profits, said Ms. Ranjana Kumar, Chairperson and Managing Director. Announcing the pre-audit provisional results for 2000-01 and plans for 2001-02 at a press conference here, she said the global NPA recovery was Rs. 549 crores, of which the domestic NPA share was Rs. 482 crores. The gross domestic NPA had come down to about Rs. 2,200 crores from Rs. 2,836 crores - that is, to 23 per cent of gross credit from 33 per cent in the previous year.

Under the RBI's compromise policy, sanctions were accorded for recovering Rs. 495 crores under 27,975 accounts up to March 31 while Rs. 160 crores had so far been recovered in 13,760 accounts (provisional), she said.

Under the restructuring plan, the bank expected to achieve a more than doubling of the operating profit for 2000-01 against Rs. 23.85 crores in 1999-2000. The CMD said the Centre was now favourably disposed to recapitalise the bank for achieving the required capital adequacy ratio. The bank has so far relieved 3,046 employees under the VRS and 300 more will be relieved by the end of May.

The global business of the bank rose to Rs. 32,752 crores. Global deposits stood at Rs. Rs. 21,721 crores and global credit at Rs. 11,031 crores. Domestic deposits increased by 14.62 per cent to Rs. 20,575 crores against 12.48 per cent in the previous year. The cost of deposits has fallen to 7.90 per cent from 8.41 per cent.

Gross domestic credit increased by 10.68 per cent against 11.05 per cent. The bank is focusing its attention more on retail financing and these now constitute about 30 per cent of total advances.

The CMD said the operating profit of overseas branches had increased by over 40 per cent. The gross NPA level of these branches was Rs. 308 crores against Rs. 519 crores, a drop of 40 per cent. The Singapore branch and the foreign currency banking unit, Colombo have been actively participating in international syndications for financing Indian public sector undertakings, financial institutions and leading Indian corporates.

The bank had entered into an MoU with HDFC Standard Life for distributing the latter's insurance policies. This would provide scope for improving the non-interest income of the bank.

Twenty branches in Chennai have been identified for this purpose. The bank had commissioned 54 ATMs of which 12 each are in Chennai and Mumbai. The ATM card base had increased to over 1.25 lakhs from 14,700 a year ago.

Elaborating the bank's plan for 2001-02, the CMD said the global business was projected to go up by over Rs. 5,000 crores or 16.5 per cent and deposits by 16.3 per cent to Rs. 25,000 crores. The net NPA is expected to drop to single digit level by end March 31, 2002, she said.

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