Indian Bank (INDIANB) Q4 17/18 earnings summary

Executive summary

• FY18 business grew 17.91% to ₹3,71,020 crore; deposits rose 14.13% and advances 23.14%, with market share gains in both.

• Operating profit rose 25% to ₹5,000.99 crore, while net profit declined to ₹1,258.99 crore from ₹1,405.68 crore.

• Asset quality ratios improved year over year, but capital adequacy fell to 12.55%; the year included a ₹78.98 crore AS 10 depreciation charge that reduced net profit.

Financial highlights

• Total income increased 6.95% to ₹19,519.49 crore; interest income was ₹17,113.65 crore and other income ₹2,405.84 crore.

• Operating expenses rose to ₹3,668.40 crore from ₹3,356.73 crore; total expenditure was ₹14,518.50 crore, up 1.88%.

• Net interest margin was 2.90%; EPS was ₹26.21 versus ₹29.27, and book value per share was ₹329.53.

• Net worth grew 9.44% to ₹15,826.98 crore; return on equity was 8.27%, down from 9.97%.

Outlook and guidance

• FY19 focus: sustainable, quality-led growth in retail, agriculture and MSME; build low-cost CASA deposits, protect asset quality and improve profitability and stability.

• Management expected growth to benefit from GST stabilization, a normal monsoon, higher infrastructure spending, reforms, PSB recapitalization and faster stressed-asset resolution under IBC.

• Market capital raising was planned for FY19 as needed, including up to ₹7,000 crore approved by shareholders, with a stated aim to reduce Government of India ownership below 75%.

• Risks to the outlook included crude-price volatility and trade protectionism, with potential inflation, current-account and external-demand effects.