Indian Bank Q4 Decoded | Growth, Asset Quality & Fundraising Plans | Binod Kumar Live

Added: 2026-05-07

[00:00:12]Good morning ladies and gentlemen. the fourth quarter earnings uh for uh uh the 3 months gone by as also the full impact of the financial year in terms of earnings is upon us and BTTV gets you the best earnings that corporate India has come up so far and in that connection we are doubly pleased to welcome an outperforming uh uh PSU enterprise Indian bank from uh uh the PSU banking space and joining us to discuss uh uh the Way ahead and the three months gone by as also the financial year is Shri Beninodkumar managing director and CEO of Indian bank. I'll also request the PCR to kindly uh put out the long-term chart of Indian bank. Ladies and gentlemen, this stock is a super outperformer. The one-year return on Indian bank despite the last uh two months of pain is 41%.

[00:01:10]Each year over the last 3 years Indian bank has appreciated 36% and in the last 5 years each year the return has been 49% each year the bank has outperformed not only the BSC bank but a large number of its peers as well and the reasons is what Mr. Kumar and I are going to discuss. The numbers are right there in front of your screen as far as performance is concerned. uh let's uh uh Mr. Kumar firstly a very warm welcome and uh uh a fabulous performance on both uh uh the financial metrics as well as the stock market metrics. Let us start with your view on uh uh the outlook for credit growth for the current financial year and which of the segments where do you think uh this growth will come from either retail or corporate or MSME what are the bank's thoughts?

[00:02:06]Thank you. Thank you for having me here.

[00:02:08]As far as credit or growth is G given, we have given guidance of between 11 to 13%. And I believe although there are many headwinds, West Asia crisis is there. We are struggling with the tariff also since August. But still if you see India outlook, India country as a whole GDP outlook remains positive. So I believe if GDP outlook is to remain positive, credit growth will also be there. If I talk of particularly my bank, RAM sector has been my strength.

[00:02:40]If you see RAM sector last year has grown by 15 more than 15%. Uh out of that retail has grown by 18.72%. MSME also grown at very healthy rate of 16.39%.

[00:02:52]Even corporate where we were struggling last year my growth in corporate was only 3%.

[00:02:58]But this year if you see even in corporate I have grown by 19.19%.

[00:03:03]So allon performance has improved for the last >> year and I expect it to continue in the coming year also.

[00:03:16]Okay, ladies and gentlemen, net profit for the year gone by hit 12,156 crores uh which is an appreciation of about 11 11 12% on the previous year and uh net profit uh is up by 5% yearonear for the quarter gone by at 3,13 cr rupees. There is improvement in operating profit. Nest interest income has gone up by 11.3% yearonear to 7,19.

[00:03:49]In fact, all across uh the financial metric, uh the bank has come up with a phenomenal performance. Let's now uh Mr. Kumar focus on the margins and the profitability part of uh your business.

[00:04:06]Cost of funds has fallen by 33 basis points year toear to 4.88% 88%. Uh how has this improvement come by? Do you think uh this is a secular process for the coming quarters as well?

[00:04:22]No, I think see main reason for reduction in cost of fund is decrease in because of report rate impact. If you see in the year repo rate has gone down by 125 basis point. So that that is the major contribution. However, uh bulk rate throughout the year has remained elevated. So we have taken certain measures and which is reflected in our kasa growth also. Kasa also we have grown by 10.85%.

[00:04:50]And we have almost maintained last year it was little about 40%, this year also kasa 39.67%, we have maintained even current saving fund account has grown by more than 10% and current account grown by 12%. So it is mix of a strategy to maintain kasa and to maintain between the bulk. We have also deployed many strategy relying on the salary account relying relying on the various float account various collection accounts we are trying. So these mixed strategy has helped us in bringing down our cost of deposit.

[00:05:27]Okay. uh a word that you might share on uh uh the expansion plans. Uh uh if you look at the present uh structure of the bank uh in terms of branch growth uh you have about 6,1 domestic branches uh of which 2011 are rural. Uh what is the outlook in terms of physical branch expansion for uh the current calendar and the current financial year?

[00:05:56]If you see last year I have given guidance that I will be opening 300 branches in three year. Last year I have opened 102 branches. This year also I will be opening around 100 branches. And I just sharing one data branches which has completed last year 57 branches has completed one year. So in that per branch business we have garnered around 30 cr. So 1,500 cr more than 1,500 cr business we have garnered in the new branches. So that is a very good good connect with the customers that help in establishing good connect.

[00:06:33]Okay, fair point. Uh in the last one year uh of course the digital business whether it's UPI or how uh businesses transacted uh over the internet platform has increased dramatically over the last decade. But how is it positioned? Uh how was it positioned in the quarter gone by and in the calendar year in the financial year compared with the same metrics uh a quarter ago and a year ago.

[00:07:01]>> So if you see now we are very much focused on the digital adoption. uh our 94% of transactions are happening digitally which was 92% a year ago a year a year year and a half ago. So we are maintaining consistently around 94% transaction in the even last quarter it was 94%. But ultimately because there is a beyond this it will be very difficult to increase. But where we are focusing we are focusing on some other areas like loan book now now we are trying that our loan book should be digitally sourced without human intervention. Last year growth in the loan book is around 67%.

[00:07:44]Uh and total as of now my total digitally sourced business we have started when I made a statement it was around 15%. with and given a statement that ultimately my target is to reach up to 50% digital digitally sourced business and presently I'm happy to say that I have already reached 18% almost 18% of my business is digitally sourced one example I will give uh last last quarter my total FD which is being made online was around 40%. So with little focus on that now it has touched up to 62%.

[00:08:21]So gradually we are product wise we are focusing and seeing that how we can source all the businesses digitally.

[00:08:32]>> Okay. Uh let's look at the financial metrics uh a little bit more. Uh uh the operating profit growth was a bit anemic 5.3%.

[00:08:43]And uh when you compare it with the net interest income growth of about 11.3% uh it was substantially low. What is the reason why uh the growth in operating profit is uh uh dramatically lower than the improvement in NI.

[00:09:03]>> See we have made some provision in AS15 staff expenses. So because of that little bit of we we have made some uh last quarter also we have made in excess of 900 this quarter also we have made excess in 850. So because of that only there is marginal impact on the operating profit otherwise things are intact.

[00:09:24]Mhm.

[00:09:26]Okay fair point. Uh let's look at the other parts of your business uh in terms of how the performance has shaped up uh on the non-performing part. So uh gross ladies and gentlemen gross uh net non-performing assets have come down dramatically uh to less than 2% from 3.1% of outstanding uh uh loans. Uh Mr. Kumar is this uh linked to credit growth or have non-performing loans actually become uh paying or have you recovered a lot more than what was anticipated earlier from uh defaulters? What was the reason behind this dramatic fall in G&PA?

[00:10:17]>> So it is coupled impact of both credit growth and recovery. If you see since last September 202 2022 my recovery is odd facing slippages even in this quarter recovery is more than the slippages recovery was 14,000 1,499 and slippages was 1,355 because of that not only in percentage term absolute term also my gross NPA has come down and we we endeavor this year also to bring it down further in the range of 1.5 to 1.60 6%.

[00:10:55]>> Okay. So, it'll be below 1.5 you say.

[00:10:58]>> Yeah.

[00:10:58]>> Between 1 point around 1.5 you can say.

[00:11:05]>> Okay. Fair point. Uh let's also uh pay attention to the other part of uh the priority sector lending. uh this is uh uh 41.5% versus the government requirement of 40%. uh uh do you see uh priority sector lending increasing over the coming quarters or are you happy with 41.7%.

[00:11:31]>> I mean I'm happy with more than 40% any point of time but I see there will there good demand in MSME also and agriculture sector also. So there will be robust growth in both agriculture and MSME and we will be easily we'll be easily maintaining more than 41% at least.

[00:11:53]Okay. Uh so that takes care of profit uh uh priority sector growth. In terms of expansion, you've talked about the 300 branches. What all spends are you incurring on the digital space?

[00:12:09]digital space per year we are incurring around 2,000 cr and that's why I'm saying we have to take benefit of all that 2,000 cr and we are very in very focused way we are interacting with our customer motivating our staff to educate the digital age option we have gone to the extent if somebody is visiting the branch of course he's always welcome but I have told my people to get to make him transaction himself self. So if they are educated four five times that they will not learn in single time but if they are educated four five times then automatically they will learn and they may they may not visit the like to visit the branch otherwise they are always welcome but for transaction I I expect that they need not to come to branch >> okay okay finally Mr. Kumar there is this growing awareness of uh uh the digital fraud that is happening uh within uh the banking sector. Uh this unfortunate thing is rising dramatically and the government and the RBI and banks such as yours have taken lots of strong steps to either stamp this out completely or maybe reduce it to the bare minimum. uh the recent meeting with the finance ministry on uh uh digital assets such as mythos and anthropic uh what was the discussion and how uh are PSU banks in general and Indian bank in particular looking at this problem and trying to solve it. See that meeting was basically to sensitize that yes there is a challenge so banks should be ready with anything comes bank should be prepared banks should be ready with that and we not only at Indian bank level industry level also we we are setting up few committees based on that some action I mean action will be initiated and we are very confident that all these challenges because all banks has very robust mechanism plus RBI after going through all these RBI has very recently also So issued a circular that gives lot of idea how banks should react and we we are further strengthening our cyber security team. Uh from within also those who have knacked for the AI and we are also looking for some outside expert also. Uh here I would like to also add one thing. We are also strengthening our subcommittee of board IT strategy committee wherein already we have one expert and we are in the process of hiring I mean as adviser from a very reputed institute. So we are strengthening our overall IT security system IT strategy team so that in case something we we remain ready.

[00:15:00]>> Okay. And my final question Mr. Kumar was the one where we started the fabulous outperformance of uh uh Indian bank on the stock markets despite all the constraints that you face in terms of stricter governance norms from the regulator as also uh from your parents the ministry of finance a view or thoughts or uh some look ahead statements that you may want to share with existing shareholders and future ones.

[00:15:31]See strength of Indian bank has if you see our what our strength is steady growth that I can assure the investors that we will keep on giving a steady growth maybe not very volatile we will we may not be very aggressive on the portfolio front also because uh and this is the time risk is always built up in the good time. So this is the time we that's why we remain always cautious and we uh not only for the growth any even on on my in my day-to-day business decisions I think whether I'm earning something out of it or not well not only for the growth so we maintain a very balanced strike between growth and our bottom line so that will be our philosophy and that we will maintain.

[00:16:22]Okay Mr. Mr. Kumar here is wishing you all the best for the quarters ahead.

[00:16:26]Let's hope that GNPA slips further much below 1.5% and both profit and profitability at Indian bank over the coming quarters uh meets and exceeds your guidance. Thank you for your time Mr. Kumar.

[00:16:42]>> Thank you. Thank you for having me here.

[00:16:47]>> Okay, that ladies and gentlemen was Mr. Benodkumar, MD and CEO at PSU uh Lender Indian Bank. Thank you for watching.