Indian Bank reported a 32% surge in Q4FY25 net profit to Rs 2,956 crore, driven by higher interest income and improved asset quality. The state-owned lender's impressive full-year performance showcased 35% growth to Rs 10,918 crore, while total business crossed Rs 13 lakh crore milestone.
The bank's core income metrics showed significant improvement during the quarter. Interest income expanded by 8% to Rs 15,856 crore, while interest expense increased by 10% to Rs 9,467 crore. Net interest income grew moderately by 6.2% to Rs 6,389 crore for Q4FY25
However, domestic net interest margin faced slight pressure, declining to 3.48% from 3.52% in the corresponding quarter last year. Binod Kumar, MD and CEO of Indian Bank, attributed this NIM contraction to the impact of repo rate cuts on lending rates combined with elevated deposit costs.
"The marginal decline in NIM is primarily due to passing on repo rate benefits to borrowers while deposit rates remained elevated. The pressure will ease as the differential between fixed deposit and CASA rates narrows," Kumar explained during the earnings briefing.
Indian Bank achieved a major milestone by crossing the Rs 13 lakh crore mark in total business, registering an 8.5% year-on-year growth to Rs 13.25 lakh crore as of March 2025. The bank's balanced growth strategy was evident in its portfolio composition.
Deposits expanded by 7.1% year-on-year to Rs 7.37 lakh crore, while advances demonstrated stronger momentum with 10.2% growth to Rs 5.88 lakh crore. The bank maintained a healthy CASA ratio of 40% for domestic deposits, providing stability to its funding base.
The state-owned lender's asset quality showed significant enhancement during the reporting period. Gross non-performing assets declined substantially to 3.09% of gross loans from 3.95% a year ago. Net NPAs improved dramatically to 0.19% from 0.43% in the previous year's comparable quarter.
Fresh slippages increased marginally to Rs 1,393 crore from Rs 1,238 crore in Q4FY24, but remained manageable within the bank's risk parameters. The improved asset quality reflects stricter underwriting standards and better recovery mechanisms implemented by the bank.
The retail, agriculture, and MSME (RAM) segments contributed approximately 64% to the bank's Rs 5.46 lakh crore domestic advances book, demonstrating the success of the bank's diversification strategy. Corporate loans accounted for the remaining 36% of the portfolio, maintaining a balanced risk profile.
This strategic focus on RAM segments aligns with India's economic priorities and provides stable revenue streams for the bank. The segment's robust growth reflects confidence among retail borrowers and small businesses in the current economic environment.
Indian Bank's Q4FY25 results demonstrate resilient financial performance with 32% profit growth and significantly improved asset quality. Despite NIM pressure from repo rate cuts, the bank's diversified portfolio and strategic focus on retail banking position it well for continued growth. The Rs 13 lakh crore total business milestone reflects the bank's expanding market presence.