Indian Bank Q4 Review - Tax Reversal Aids Profitability; Asset Quality Remains Healthy: Dolat Capital
BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
Indian Bank reported weak net interest income and pre-provision operating profit growth of 1% and 6% YoY respectively on a merged basis, led by high interest reversals including those for previous quarter’s pro forma non performing assets.
Other income grew 25% QoQ, benefitting from higher treasury gains and steel account recovery.
Profit after tax was sharply higher owing to Rs 9 billion of tax write-backs and lower provisions, supporting return on asset of 1.1% for the quarter.
Asset quality trends continued to impress with FY21 slippages at 2.8% (4% pro forma in Q4), over 50 basis points sequential decline in pro forma non performing assets to 9.9%, and provision coverage ratio at 68%.
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