Indian Bank reports 11.5 per cent growth in net profit, asset quality improves

Binod Kumar, MD & CEO, Indian Bank, at a press conference in Chennai
| Photo Credit:
Bijoy Ghosh

Indian Bank reported an 11.5% year-on-year increase in net profit at ₹3,018 crore for the second quarter ending September 2025 (Q2FY26). This growth was supported by a 12.7% annual rise in gross advances and a 5.8% expansion in Net Interest Income (NII) to ₹6,551 crore. The bank also demonstrated improved asset quality during this period.

Net Interest Margins (NIM) saw a marginal decline, settling at 3.23% compared to 3.39% during the same quarter last year.

For the six-month period ending September 2025 (H1FY26), net profit rose 17.2% year-on-year to ₹5,991 crore, while NII increased by 4.35% to ₹12,910 crore.

Retail, Agriculture & MSME (RAM) advances grew robustly by 15.6% year-on-year to ₹3,75,660 crore in Q2FY26, comprising 65.5% of gross domestic advances. Retail loans led this growth with an 18.6% annual increase.

The bank’s asset quality strengthened as Gross Non-Performing Assets (GNPA) improved by 88 basis points to 2.6%, while Net Non-Performing Assets (NNPA) declined by 11 basis points to 0.16%.

Total deposits reached ₹7.77 lakh crore, marking a 12.1% increase year-on-year. However, the domestic Current Account Savings Account (CASA) ratio decreased to 38.9% from 40.5% in Q2FY25, reflecting ongoing challenges in low-cost deposit mobilization.

The state-run bank’s total business expanded by 12.4% to ₹13.97 lakh crore as of September 2025. MD and CEO Binod Kumar affirmed that the institution is surpassing its initial fiscal year targets, expecting sustained growth momentum without obstacles.

Corporate credit grew by 5.1% year-on-year, with sanctions increasing over 60% in H1FY26. Kumar highlighted a robust corporate pipeline of approximately ₹60,000 crore, driven by demand from renewable energy, data center operations, and power transmission sectors.

Addressing potential impacts of GST reforms, Kumar projected increased credit demand during Q3FY26, particularly in consumer segments like automotive financing.

Digital channels contributed ₹1,23,585 crore to business in H1FY26, representing 12-13% of total business volume. Kumar outlined plans to elevate this share to 40% within the next three years through continued digital transformation initiatives.

Published on October 16, 2025