According to a recent press report Indian Bank has announced seven per cent increase in net profit to Rs 439 crore in the fourth quarter of 2010-11.The bank had recorded Rs 410 crore profit for the same period last year. The board of directors has recommended a dividend of 75 per cent which is Rs 7.5 per share.
Mr. T.M. Bhasin, Chairman and Managing Director, Indian Bank, said that the financial year of 2010-11 was a challenging one for the bank since it had to make provisions for gratuity and pensions. The provisions for gratuity and pensions amounted to Rs 814 crore which would be repaid over a period of five years. This means that one fifth of the sum will be treated as expenditure in the current year’s profit and loss account.
He added saying that the bank’s profits came from lending, rather than treasury, where the yield was negative. He also said that the bank was interested in growing profits rather than the size of the balance sheet. The bank has a portfolio of over 42 loan products ranging from regular Home loan and car loan to NRI plot loans and agriculture produce marketing loan.
The bank had recovered about Rs 756 crore in 2010-11 from its bad debts where it has reduced its total bad debts to Rs 740 crore for the fourth quarter from Rs 988 crore in the first quarter. The bank expects to grow its loan book by 22 per cent for the current financial year.