The Hindu : Revamp puts Indian Bank on steady road

Online edition of India's National Newspaper
Monday, May 05, 2003

Business

Business

Revamp puts Indian Bank on steady road

By K.T. Jagannathan and S. Raghuraman

CHENNAI MAY 4 . Indian Bank has reported a net profit of Rs.188.83 crores for the 12-month ended March 31, 2003, up from Rs. 33 crores last year.

The chairperson and managing director, Ranjana Kumar, said the bank proposed to pare prime lending rate by 0.25 per cent to 11.50 per cent from June this year. The bank was also toying with the idea of reducing deposit rates as well. The asset-liability management committee of the bank was seized of the deposit rate cut issue and a final view would be taken very soon, she said. It should be noted that nearly a quarter of its total deposits came through savings accounts. Not surprisingly, the bank has managed to bring down the average cost of funds to 6.63 per cent in 2002-03 from 7.63 per cent in 2001-02.

The bank, whose total income during 2002-03 grew by Rs. 261.05 crores to Rs. 3,056.91 crores, was also contemplating to recruit 200 probationary officers this year. Further, it would take on board freshly 58 officers of cadres, drawn from diverse specialised fields.

The recruitment move comes on top of nearly 3,295 employees leaving the bank under the voluntary retirement scheme during 2002-03. The operating profit of the bank was up by 92.1 per cent to Rs. 590.25 crores. Net interest income had risen by 54.5 per cent to Rs. 820.39 crores.

Even excluding the interest earned on recapitalisation from the Government of India, the operating profit stood at Rs. 470 crores, the net interest income at Rs. 169 crores and the net profit at Rs. 69 crores, a growth of 108 per cent over the previous year's figure of Rs. 33 crores. After transferring to reserves out of the current year net profit, the accumulated loss stood at Rs. 3,849.63 crores.

Total business at the end of March 31, 2003 crossed the Rs. 40,000-crore mark. It went up by Rs. 1,000 crores from the pre-restructuring level of Rs. 29,351 crores during 1999-2000 to Rs. 40,169 crores now. Total global deposits of stood at Rs. 27,016 crores at the end of March 2003, from Rs. 23,029 crores in 2001-02.

These had grown by about Rs. 8,362 crores from the pre-restructuring level of Rs. 17,951 crores in 1999-2000. Gross advances had grown by Rs. 13,153 crores from Rs.12,183 crores in 2001-02. The gross NPA (non-performing assets) had come down to Rs. 1,630 crores as on March 31, 2003 from Rs. 3,355 crores in 1999-2000. This worked out to 12.9 per cent of total advances as compared to 32.8 per cent in 1999-2000.

The net NPA was Rs.755 crores (6.15 per cent) against Rs. 1,327 crores (16.18 per cent) in 1999-2000. The return on assets had improved to 0.65 per cent from 0.14 per cent in 2001-02. The share of retail credit in domestic credit rose to over 20 per cent what with the launch of re-structured products such as home, vehicle, educational and personal loans.

Printer friendly page
Send this article to Friends by E-Mail

Business

Stories in this Section

Concerns over sustainability

Revamp puts Indian Bank on steady road

RBI against uni-directional perceptions on rupee

Bank stocks steal limelight

Technology development, credibility and economics

Centre keen on single law for SSIs