Indian Bank
NSE Symbol INDIANB
The
Quarterly results of Indian Bank for Q4 FY 12 indicate a slight downturn in
profitability – mainly due to higher NPAs and Provisions as reviewed below :
Interest on Advances in Q4 FY 12 stands at Rs.2413.54 cr ; down by -3.23%
from Q3 FY 12 (Rs.2494.16 Cr); and up by 21.63% from Q4 FY 11 (Rs.1984.26 Cr).
Income on Investments in Q4 FY 12
stands at Rs.772.68 cr ; up by 6.53% from Q3 FY 12 (Rs.725.32 Cr); and up by 27.68
% from Q4 FY 11 (Rs.605.15 Cr).
Interest Earned in Q4 FY 12
stands at Rs.3191.06 cr ; down by -1.02% from Q3 FY 12 (Rs. 3224.01 Cr); and up by 23.01% from Q4 FY
11 (Rs.2594.18 Cr).
Other Income in Q4 FY
12 stands at Rs.306.97 cr ; up by 9.15% from Q3 FY 12 (Rs.281.25 Cr); and up by
13.01% from Q4 FY 11 (Rs.27162 Cr).
Total Income in Q4 FY
12 stands at Rs.3498.02 cr ; down by -0.21% from Q3 FY 12 (Rs.3505.26 Cr); and
up by 22.06% from Q4 FY 11 (Rs.2865.80 Cr). Growth in total income is
unimpressive.
Interest Expended in Q4 FY 12 stands at Rs.2108.46 cr ; up by 2.65% from
Q3 FY 12 (Rs.2053.98 Cr); and up by 42.16% from Q4 FY 11 (Rs.1483.17 Cr).
Net Interest Income in Q4 FY
12 stands at Rs.1082.60 cr ; down by -7.47% from Q3 FY 12 (Rs.1170.03 Cr); and
down by -2.56% from Q4 FY 11 (Rs.1111.01 Cr). NII has fallen with reference to
both the compared quarters.
Total Expdr(Excl.
provisions) in Q4 FY 12 stands at Rs.2700.75
cr ; up by 4.13% from Q3 FY 12 (Rs.2593.69
Cr); and up by 37.6% from Q4 FY 11 (Rs.1962.78 Cr). Expenditure has grown more
than proportionately compared to Income.
Operating Profit in Q4 FY 12 stands at Rs.797.28 cr ; down by -12.54%
from Q3 FY 12 (Rs.911.56 Cr); and down by -11.71% from Q4 FY 11 (Rs.903.02 Cr).At
operating level, there is a downslide in both quarters.
Provisions in Q4 FY 12 stands at Rs.561.85 cr ; up by 137.94%
from Q3 FY 12 (Rs.236.13 Cr); and up by 343.11% from Q4 FY 11 (Rs.126.80 Cr).Provisions
in Q4 have climbed very high compared to both
quarters.
Profit before tax in
Q4 FY 12 stands at Rs.235.43 cr ; down by -67.65% from Q3 FY 12 (Rs.727.76 Cr);
and down by -69.67% from Q4 FY 11 (Rs.776.22 Cr). PBT has come down very
sharply compared to both quarters.
Tax Expense in Q4 FY 12
stands at Rs(-)109.99 Cr;compared to Rs.201.84 cr in Q3 FY 12; and Rs.33737 Cr
in Q4 FY 11.
Net Profit in Q4 FY 12
stands at Rs.345.42 cr ; down by -34.32%
from Q3 FY 12 (Rs.525.93 Cr); and down by -21.29% from Q4 FY 11 (Rs.438.86 Cr).
NPT is down with reference to both quarters.
Face Value is Rs.10; Paid-up Equity stands at 429.77 Cr.
Capital Adequacy Ratio in Q4 FY 12
stands at 12.67%; compared to 10.98% in Q3 FY 12; and 12.83% from Q4 FY 11. CAR
stands comfortable.
Basic EPS in Q4 FY 12 stands at Rs.7.77; compared to Rs.11.97 in
Q3 FY 12; and Rs.9.94 in Q4 FY 11. It is to be seen if INDIAN BANK is able to
arrest the down slide in Profitability in Q1 FY 13, by bringing down NPAs and
Provisions, and vigorously enhancing the Income streams.
Gross/Net NPA in Q4 FY 12
stands at Rs.1196.83 cr ; up by 72.13% from Q3 FY 12 (Rs.695.31 Cr); and up by 201.44%
from Q4 FY 11 (Rs.397.04 Cr). Increase in Net NPAs in absolute numbers and percentages shows a
big increase in current quarter.
% of Gross/Net NPA in Q4 FY 12 stands at 1.33%;
compared to 0.8% in Q3 FY 12; and 0.53%
from Q4 FY 11.
Return on Assets in Q4 FY 12 stands at 0.99%; compared to 1.53% from Q3
FY 12; and 1.46% from Q4 FY 12. Due to the above reasons, ROA has fallen very
sharply.
REVIEW OF ANNUAL RESULTS
(consolidated)
FY12 vs FY 11 vs FY 10
Interest on Advances in FY 12(Consolidated) stands at Rs.9420.26 cr; up 33% from FY 11 (Rs.7099.01Cr); and up 63% from FY 10 (Rs.5789.91
Cr).
Income on Investments in FY 12(Consolidated) stands at
Rs.2790.33 cr; up 25% from FY 11 (Rs.2230.54 Cr); and up 40% from FY 10
(Rs.1995.22 Cr).
Interest Earned in
FY 12(Consolidated) stands at Rs.12227.72
cr; up 31% from FY 11 (Rs.9362.76 Cr);
and up 56% from FY 10 (Rs.7845.02 Cr).
Other Income in
FY 12(Consolidated) stands at Rs.1194.71
cr; up 1% from FY 11 (Rs.1188.06 Cr); and up 0% from FY 10 (Rs.1192.29 Cr).
Total Income in
FY 12(Consolidated) stands at Rs.13422.43
cr; up 27% from FY 11 (Rs. 10550.82 Cr);
and up 49% from FY 10 (Rs.9037.31 Cr). Total Income has grown
reasonably over
the last 2 years.
Interest Expended in FY 12(Consolidated)
stands at Rs.7806.36 cr; up47% from FY
11 (Rs.5320.03 Cr); and up 72% from FY 10 (Rs.4547.89 Cr).
Employees cost in
FY 12(Consolidated) stands at Rs.1488.66
cr; up 11% from FY 11 (Rs.1337.92 Cr);
and up 22% from FY 10 (Rs.1216.35 Cr).
Other Operating Expenses in FY 12(Consolidated)
stands at Rs.706.93 cr; up 18% from FY
11 (Rs.597.87 Cr); and up 35% from FY 10 (Rs.525.31 Cr).
Operating Expenses in FY 12(Consolidated)
stands at Rs.2195.59 cr; up 13% from FY
11 (Rs. 1935.79 Cr); and up 26% from FY 10 (Rs.1741.66 Cr).
Total Expenditure(excl. provisions) in
FY 12(Consolidated) stands at Rs.10001.95
cr; up 38% from FY 11 (Rs.7255.82 Cr);
and up 59% from FY 10 (Rs.6289.55 Cr).Total
expenditure has grown up more than proportionately, compared to previous 2
years. This has brought down
Operating profit considerably.
Operating Profit in FY 12(Consolidated) stands at Rs.3420.48 cr; up 4% from FY 11 (Rs.3295 Cr);
and up 24% from FY 10 (Rs.2747.76 Cr).
Provisions in
FY 12(Consolidated) stands at Rs.1201.60
cr; up 87% from FY 11 (Rs.641.75 Cr); and up 2% from FY 10 (Rs.1183.82 Cr).
There is huge increase in Provisions compared to FY 11.
Exceptional Items in FY 12(Consolidated)
stands at Rs(-)52.33 Cr.
Profit before tax in FY 12(Consolidated)
stands at Rs.2271.21 cr; down -14% from
FY 11 (Rs.2653.25 Cr); and up 45% from FY 10 (Rs.1563.94 Cr).PBT has come down
compared to previous year due to higher provisions.
Tax Expense in FY 12(Consolidated) stands at Rs.524.62 cr; down(-)43% from FY 11 (Rs.925.10
Cr); and up 8914% from FY 10 (Rs.5.82 Cr).
Net Profit in FY 12(Consolidated) stands at Rs.1746.59 cr; up 1% from FY 11 (Rs.1728.15 Cr);
and up 12% from FY 10 (Rs.1558.12 Cr).The lower Tax has helped in positive
growth by 1% YoY.
Consolidated NPT in FY 12(Consolidated) stands at Rs.1765.83 cr; up 1% from FY 11 (Rs.1745.41 Cr); and up 12% from FY 10 (Rs.1569.81 Cr).There
is a small increase in the consolidated net profit in FY 12 over the 2
preceding years.
Face Value stands at Rs.10.
Paid-up Equity stands at Rs.429.77Cr.
Reserves stands at Rs.8916.54 Cr.
Capital Adequacy Ratio in FY 12 stands at 12.78%; compared to 12.83% in FY 11; and 12.26%
in FY 10.
Basic EPS for FY 12 stands at Rs.40.01; compared to
Rs.39.53 in FY 11; and Rs.35.44 in FY 10. EPS has grown over the 2 years, but
the increase is very small.
Return on Assets stands at 1.32% in FY 12; 1.55% in FY
11; and 1.68% in FY 10. Compared to most other Banks, ROA is impressive in
respect of Indian Bank.
Public holding (%) in Indian Bank is very
low at 20%. Indian Bank may need to public sources for funds.
Gross/Net NPA stands at Rs.1196.83 in FY 12;up 201%
from FY 11 (Rs.397.04Cr); and up 726% from FY 10 (Rs.144.93 Cr).
% of Gross/Net NPA stands at 1.32% in FY 12;
0.53% in FY 11; and 0.23% in FY 10. This heavy increase in NPA % is a cause for
concern.
The NPAs have particularly
increased in Q4 FY 12. It is not clear whether special reviews are being conducted by
all PSBs in Q4 FY 12 to bring all NPAs into account – as some PSBs have
reported significantly Higher NPAs in Q4 FY 12 -compared to other quarters. It is 201% YoY in Q4 FY 12 for Indian Bank.
Some other PSBs too have exhibited such High increase. But some PSBs like Bank of Baroda are still in very Good position.
It is significant, that there is no such pattern in
private sector Banks. Most Private sector Banks have comfortable levels of Asset quality.
At this point of time, the Net NPAs
quantity may still be within the zone of comfort (in PSBs), but the RISE% is definitely
not in zone of comfort for some like Indian Bank.
The Basic EPS for FY 12 is
Rs.40.01. The current Market price is Rs.179.65.
The
52 week high is Rs.265.00 ((09-FEB-12);
while the 52 week low is Rs.166 (21-DEC-11).
The
PE Ratio is 4.49. Indian Bank is a strong Bank with good fundamentals. It has
produced strong growth in the past few years.The downturn in Q4 is a matter of
concern. But, this increase in NPAs may be a one-off pattern, unlikely to
repeat in future quarters-especially, if the Bank takes strong remedial
measures.
OTHER DETAILS
(From Bank Press release etc)
Ø GLOBAL
BUSINESS GREW BY 16.8 %
Ø GLOBAL
DEPOSITS GREW BY 14.2 %
Ø GLOBAL
ADVANCES GROWTH AT 20.4 %
Ø NET
INTEREST MARGIN AT 3.43 %
Ø CORE
OPERATING PROFIT UP BY 6.9 %(Y-O-Y)
Board of Directors has proposed a dividend
of 75 %.
Performance Highlights for the year ended
March 2012
Ø The
Bank recorded an Operating Profit of Rs.3,463 cr for the year ended March 2012
as compared to Rs.3,292 cr in the previous year, registering a growth of 5.2 %.
Ø Net
Profit was at Rs.1,747 Cr for the year ended March 2012 as compared to Rs.1,714
Cr in the previous year.
Ø Interest
Income improved by 30.6 %or Rs.2,870 Cr to Rs.12,231 Cr from Rs. 9,361 Cr.
Ø Total
Income improved by 27.7 %or Rs.2,920 Cr to Rs.13,463 Cr from Rs.10,543 Cr.
Ø Core
non-interest income improved by 9.5 %to Rs.992 Cr.
Ø Growth in CASA : 13%
Ø Domestic CASA share : 31.49% as
against 31.62% in 2010-11
Key Financial ratios
Ø NIM
was at 3.43 %.
Ø Cost
income ratio was at 38.7 %.
Ø Return
on Average Assets stood at 1.31 %.
Ø Net
worth improved to Rs.9,637.41 Cr from Rs.8,326.55 Cr.
Ø Book
value improved to Rs.214.94 (Rs.184.44 for March 2011).
Ø EPS
improved to Rs.39.57 from Rs.38.79.
Ø Provision
Coverage ratio was at 70.13 %.
Capital Adequacy
Ø As
per Basel II, the Capital to Risk weighted Assets Ratio (CRAR) was at 13.47 %(including
Tier I Capital Adequacy of 11.13 %) as against 13.56 %as on 31st March 2011.
Ø Business
Ø Overall
Business of the Bank improved to Rs.2,11,988 cr, up from Rs.1,81,530 cr
recording a growth of Rs.30,458 cr (16.8 %).
Ø Total
Deposits rose by 14.2 % to Rs.1,20,804 cr from Rs.1,05,804 cr.
Ø Gross
Advances increased by 20.4 % to Rs.91,184 cr from Rs.75,726 cr.
Ø Credit
Deposit ratio improved to 75.5 %.
Asset Quality/ NPA Management
Ø Gross
NPAs to gross advances was at 2.03 %.
Ø Net
NPAs to net advances was at 1.33 %.
Branch Network
Ø As
on March 31, 2012, the Bank had 1955 branches in India comprising of 520 Rural,
549 Semi Urban, 500 Urban and 386 Metropolitan branches.
Ø During
the year, the Bank opened 95 branches in India.
Some of the Notes
forming part of Audited
Financial Results of the Bank
for the Quarter / Year ended
March 31, 2012
Ø During
the year, Parent has changed its Accounting Policy in respect of provisioning
for Nonperforming assets as detailed below:
Ø Provisioning
for all non performing assets classified as substandard has been increased to 25%
from 01.04.2011 in place of 20%.
Ø Provisioning
for doubtful assets at the rates prescribed in IRAC Norms in respect of all advances
categorized under D1 and D2 from 01.07.2011 as against 100% followed upto 30.06.2011.
Ø Consequent
to the above mentioned changes, the Net Profit for the current year is higher
by R285.61 cr
Ø A sum
of R 92 cr has been charged to P & L Account towards transitional liability
for the year in compliance with the Revised AS -15 on Employee Benefits by the
Parent and the remaining unrecognized transitional liability as on March 31,
2012 is Nil.
Ø In
accordance with the guidelines of RBI on Second Option Pension and enhancement
in Gratuity Limits pertaining to existing employees, an amount of R 162.65 cr
and R 33.20 cr towards Pension and Gratuity respectively have been charged to P
& L Account being the proportionate sum for the current year by the Parent.
Remaining unrecognized liability pending amortization are R 487.93 cr and R
99.60 cr towards Second Option Pension and Gratuity, respectively.
Ø Provision
for tax expenses is net of reversal of R151.17 cr, being the provision of
earlier years considered as no longer required.
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