CHENNAI: Indian Bank has reported continued improvement in its performance on all fronts with the net profit rising by 20.7 per cent to Rs. 164.81 crore in the first three months ended June 30, 2006, from Rs. 136.57 crore in the year-ago period.

Addressing presspersons here on Friday, K. C. Chakrabarty, Chairman and Managing Director of the bank, said the overall business of the bank grew by 18.4 per cent to Rs. 10,290 crore from Rs. 55,998 crore on a year-on-year basis.

Total deposits increased by Rs. 5,126 crore (14.04 per cent) to Rs.41,637 crore from Rs. 36,511 crore (June 2005). Net advances rose by Rs. 5,164 crore (26.5 per cent) to Rs. 24,651 crore from Rs.19,487 crore. A noteworthy feature of the performance was the consistent achievement of parameters in respect of lending to priority sector, Mr. Chakrabarty said.

On the interest rate front, Mr. Chakrabarty said, the interest rate increase was a normal process. "We need to give higher rate of interest on deposits to mobilise more deposits. Naturally there will be an increase in interest rate on advances.

Unless major banks increase interest rates, it is not possible for us to increase interest rates", he said. However interest rate hike will be in non-productive sectors such as housing loans, he said. To mobilise deposits, the bank may announce innovative deposit schemes on August 15, as it enters the centenary year. Many more new schemes will be launched throughout centenary year. In pursuit of taking technology to the common man, the bank intends bringing all branches under CBS (core banking solutions) before the end of its centenary year on August 14, 2007, he said.

For the quarter ended June 30, 2006, deposits grew by Rs. 832 crore and net advances by Rs. 2,165 crore. Business per employee improved to Rs. 3.09 crore as on June 30, 2006, from Rs.2.58 crore (June 2005).

The gross non-performing assets (NPA) declined to Rs. 648 crore (2.58 per cent) as on June 30, 2006, from Rs.736 crore (3.68 per cent) as on June 30, 2005. The net NPA recorded a sharp decline to Rs. 141 crore (0.57 per cent) from Rs. 202 crore (1.04 per cent). During the first quarter, total NPA recovery was higher at Rs.75.13 crore, as compared to Rs.70.45 crore for the first quarter of last year.

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