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Dolat Capital Report
Indian Bank reported healthy profitability metrics, benefitting from higher net interest margin, better than expected other income and lower opex. Core pre-provision operating profit margin strengthened to 2.1% for the quarter.
Slippages at 3.1% improved QoQ but remained elevated led by continued stress from micro, small and medium enterprise book, resulting in credit costs of 2% for the quarter.
Headline asset quality strengthened with 30 bps sequential moderation in gross non-performing asset ratio to 8.1% and stable provision coverage ratio at 75%. However, restructured book at ~4.5% is higher versus peers (~2.5%) and delinquencies from the MSME book have remained high even as corporate stress has declined materially.
This is partly due to Indian Bank's higher share of MSME loans at 18% of advances.
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