INDIAN BANK 2023-24 Annual Report Analysis

Mon, 27 May

INDIAN BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

INDIAN BANK Income Statement Analysis

• Interest income during the year rose 23.7% on a year-on-year (YoY) basis.
• Interest expenses were up by 30.8% YoY during the same period.
• Operating expenses increased by 17.5% YoY during the year.
• The bank's net interest income (NII) increased by 15.0% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 3.2% in FY24 as against 3.2% in FY23.
• Other income increased by 10.0% YoY during the year.
• Net profit for the year increased by 51.1% YoY.
• Net profit margins during the year increased to 15.1% in FY24 from 12.4% in FY23.

INDIAN BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	449,852	556,497	23.7%
Other Income	Rs m	78,045	85,820	10.0%
Interest Expense	Rs m	247,173	323,408	30.8%
Net Interest Income	Rs m	202,679	233,090	15.0%
Operating Expense	Rs m	127,248	149,528	17.5%
Pre-provision Operating Profit	Rs m	153,476	169,381	10.4%
Provisions & Contingencies	Rs m	100,171	88,090	-12.1%
Profit before tax	Rs m	59,632	110,174	84.8%
Tax	Rs m	6,327	28,882	356.5%
Profit after tax	Rs m	55,723	84,194	51.1%
Minority Interest	Rs m	-12	-31	-157.0%
Net Interest Margin	%	3.2	3.2
Net profit margin	%	12.4	15.1

Don't Miss: Key Information for Long-term Investors

INDIAN BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 6,879.5 bn as compared to Rs 6,211.2 bn in FY23, thereby witnessing an increase of 10.8%.
• Advances for the year stood at Rs 5,148.9 bn as compared to Rs 4,492.9 bn during FY23, a rise of 14.6%.
• Cost of deposits for INDIAN BANK rose 18.8% and stood at 4.4%, while yield on advances rose to 7.9%.
• The lender's investments rose to Rs 2,152.4 bn during the year from Rs 1,883.7 bn in FY23.
• Borrowing stood at Rs 231.4 bn, a growth of 4.8% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 7,957.1 bn as against Rs 7,133.3 bn during FY23, thereby witnessing a rise of 11.5%.

INDIAN BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	495,068	602,482	21.7%
Advances	Rs m	4,492,940	5,148,891	14.6%
Deposits	Rs m	6,211,232	6,879,531	10.8%
Yield on advances	%	7.1	7.9
Cost of Deposits	%	3.7	4.4
Investments	Rs m	1,883,663	2,152,418	14.3%
Borrowings	Rs m	220,924	231,429	4.8%
Total Assets	Rs m	7,133,340	7,957,088	11.5%

Current Valuations for INDIAN BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 62.5, an improvement from the EPS of Rs 44.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 579.0, stands at 6.7 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.3 times, while the price to income ratio stands at 1.0 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	361.2	413.2
Earnings per share (Unadj.)	Rs	44.7	62.5
Diluted earnings per share	Rs	41.4	62.5
Avg P/E ratio	Rs	5.0	6.7
Avg P/ABV ratio	Rs	0.8	1.3
Avg Market Cap	Rs	278,481	566,196
Dividends per share (Unadj.)	Rs	8.60	12.00

Ratio Analysis for INDIAN BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 74.8x during FY24, from 72.3x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 11.80x during FY24, from 12.99x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): INDIAN BANK's capital adequacy ratio (CAR) was at 16.4% as on 31 March 2024 as compared to 16.5% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 14.0% during FY24, from 11.3% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.06% during FY24, from 0.78% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 16.60% during FY24, from 11.21% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. INDIAN BANK's gross NPA ratio stood at 4.0% as of 31 March 2024 compared to 6.0% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of INDIAN BANK was 0.4% in financial year 2024. This compared with 0.9% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	72.3	74.8
Debt to Equity Ratio	x	13.0	11.8
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	16.5	16.4
Return on Equity	%	11.3	14.0
Return on Assets	%	0.8	1.1
Return on Capital Employed	%	11.2	16.6
% of Gross NPAs	%	6.0	4.0
% of Net NPAs	%	0.9	0.4
Yield on Advances	x	7.1	7.9
Yield on Investments	x	6.4	6.6

To see how INDIAN BANK has performed over the last 5 years, please visit here.

INDIAN BANK Share Price Performance

Over the last one year, INDIAN BANK share price has moved up from Rs 277.3 to Rs 579.0, registering a gain of Rs 301.7 or around 108.8%.

Meanwhile, the S&P BSE BANKEX is trading at 56,223.1 (up 0.5%). Over the last one year it has moved up from 49,960.5 to 56,223.1, registering a gain of 6,262.6 points (up 12.5%).

Overall, the S&P BSE SENSEX is up 22.0% over the year.

(To know more, you can check out historical annual results for INDIAN BANK here and quarterly results for INDIAN BANK here)