Indian Bank managing director and CEO Binod Kumar has said that pressure on lending margins would stay but be subdued by repricing in deposits.

Kumar has revised downwards its bad loans projection for the financial year by 1%, while sticking to the other parameters like recoveries and growth in credit and deposits.

For the quarter ended September, Indian Bank has posted net profit of Rs 3,018 crore, up 11.5% from Rs 2,707 crore a year ago.

The state-owned bank’s net interest income, or the difference between interest earned and interest paid, stood at Rs 6,551 crore in the September quarter, up 5.76% from Rs 6,194 crore in the same quarter last year. 

Operating profit stood 2.3% higher at Rs 4,837 crore from Rs 4,728 crore.

NIM

The bank’s net interest margin (NIM) for the fiscal second-quarter stood at 3.23% against 3.39% in the earlier year.

"There will be some pressure on NIM in the third quarter but it will not be very high,” Kumar told analysts. “Around 40% of the MCLR-linked loan book will be repriced in the next quarter. Also, 21% of the deposits will be repriced in the same quarter.” 

Bad loans

The lender’s asset quality improved, with gross non-performing assets (NPA) ratio declining to 2.6% as on 30 September 2025, compared to 3.48% a year back and 3.01% a quarter ago. 

Net NPA stood at 0.16% versus 0.27% a year ago and 0.18% sequentially.

Fresh slippages stood at Rs 1,132 crore in the September quarter, while total recoveries and upgrades were at Rs 1,641 crore. The slippage ratio improved to 0.79% from 1.06% in the same quarter last year.

Provisioning against bad loans were lower at Rs 739 crore as against Rs 1,099 crore a year ago. Sequentially, it was at Rs 691 crore in the June quarter.

Provision coverage ratio stood at 98.28% as on 30 September 2025, improving from 97.60 in September 2024.

Loan book at Rs 6.20 lakh cr

The bank's gross advances rose 12.7% year-on-year to Rs 6.20 lakh crore as of 30 September 2025.

The RAM (retail, agriculture and MSME) loan segment grew by 15.57% YoY to Rs 3.76 lakh crore, contributing 65.50% of the lender’s domestic advances.  

Domestic advances rose 11.73% YoY to Rs 5.74 lakh crore, led by growth in the RAM portfolio. While retail loans rose by 18.58% to reach Rs 1.30 lakh crore, agri grew 13.98% to Rs 1.46 lakh crore and MSME by 14.10% to Rs 98,956 crore.

Deposits at Rs 7.77 lakh cr

Total deposits expanded 12.09% YoY to reach Rs 7.77 lakh crore as on 30 September, with low-cost current and savings accounts (CASA) rising 7.23% to Rs 2.88 lakh crore. CASA accounts for 38.87% of total deposits, down from 40.47% a year ago. 

Total biz at Rs 13.97 lakh cr

The bank’s total business rose 12.34% YoY to Rs 13.97 lakh crore as of September 2025.

Guidance

Kumar said the guidance on gross NPA has been revised downward to 2% from earlier 3%. On others like recovery and business growth, the earlier estimates stand, he added.