Indian Bank (INDIANB) Q2 24/25 earnings summary

Executive summary

• Net profit for Q2FY25 rose 36% year-over-year to ₹2,707 Cr; H1FY25 net profit up 38% to ₹5,110 Cr, with operating profit for Q2FY25 at ₹4,728 Cr, up 10% YoY.

• Advances grew 12% YoY to ₹6.93 lakh Cr; deposits up 8% YoY to ₹7.0 lakh Cr; retail credit rose 15%, agriculture 16%, MSME 8%, and corporate 9%.

• Asset quality improved: Gross NPA at 3.48% (down 149 bps YoY), Net NPA at 0.27% (down 33 bps YoY); PCR at 97.7%.

• Digital transactions accounted for 91-92% of total, with strong growth in mobile banking, UPI, and e-deposit adoption.

• CASA ratio remained above 40%.

Financial highlights

• Net Interest Margin (NIM) was 3.39% globally and 3.49% domestically for Q2FY25; NII for Q2FY25 at ₹6,194 Cr, up 8% YoY.

• Return on Assets (ROA) for Q2FY25 at 1.33%; Return on Equity (ROE) at 21%.

• Cost-to-income ratio stood at 44-45%.

• Capital Adequacy Ratio at 16.55% as of September 2024.

• Liquidity Coverage Ratio (LCR) improved to 120-122%.

Outlook and guidance

• Deposit growth guidance of 8-10% and credit growth of 11-13% reaffirmed, with current performance tracking guidance.

• NIM guidance of 3.40% expected to be maintained or exceeded.

• Asset quality expected to improve further, with collection efficiency at 95%.

• Board approved capital plan for FY25: ₹5,000 Cr equity and ₹2,000 Cr AT-1/Tier-II instruments.

• Recovery guidance for the year is INR 7,000-7,500 crore.