City-based government-owned lender Indian Bank closed the third quarter of the current fiscal with a 37 percent fall in net profit and a steep hike in non-performing assets (NPA).
The bank closed the third quarter with a net profit of around Rs.331 crore, down from Rs.526 crore posted during comparable period the previous fiscal.
Announcing the results for the third quarter ended Dec 31, 2012, chairman and managing director T.M. Bhasin said here Sat: "The fall in profit is due to provision of Rs.40 crore towards pension corpus for second time option given to VRS (voluntary retirement scheme) optees and an adhoc provisio of Rs.15 crore towards expected wage revision. Additionally, Rs.96 crore has been provided towards restructured assets."
According to Bhasin, during the third quarter of the last fiscal, there were two exceptional income items comprising of reversal of provision amounting to Rs.52 crore towards deferred tax liability and an one time income of Rs.51 crore from foreign exchange portfolio.
Queried about the bank's gross NPA standing at Rs.3,180 crore at the end of the nine month period ending Dec 31, 2012, an increase of Rs.1,330 crore since the close of last fiscal, Bhasin said: "The jump in NPA is due to technical reasons and we are confident that the accounts would turn good during the course of the year."
Indian Bank's total income went up to around Rs.3,787 crore during the third quarter from around Rs.3,505 crore earned during the quarter ended Dec 31, 2011.
Bhasin said the recent easing of the policy rates by the Reserve Bank of India (RBI) will give the bank around Rs.330 crore for lending and the bank would cut its lending rates.
According to Bhasin, the bank is ready for implementing the Aadhar card linked direct cash transfer scheme in Puducherry and Chitoor district in Andhra Pradesh.
"In Puducherry the number of beneficiaries is estimated at 15,000 and in Chitoor it is over 100,000,a Bhasin said.