Indian Bank has identified eight accounts worth Rs 1,900 crore to be transferred to National Asset Reconstruction Company Ltd (NARCL) in the first phase, its managing director and CEO Padmaja Chunduru revealed.

The state-run bank has taken board approval to buy a stake of 9.9% in NARCL, Chunduru added.

For the quarter ended June, Indian Bank posted a standalone net profit of Rs 1,182 crore, up 220% year-on-year but down 31% sequentially.

The bank amalgamated Allahabad Bank with itself effective 1 April 2020

"The factors which led to profit during the quarter were control over interest expenses, maintaining interest income and also due growth in non-interest income. The synergies of the amalgamation also helped us in reducing the cost of funds," Chunduru told reporters on Monday.

Net interest income (NII) grew 3% year-on-year to Rs 3,994 crore in the fiscal first quarter compared to Rs 3,874 crore a year ago.

Non-interest income was up 41% to Rs 1,877 crore, against Rs 1,327 crore. The rise was on account of higher recovery in bad debts and an increase in foreign exchange (forex) income, the bank said in a statement.

Domestic net interest margin (NIM) improved by 51 basis points (bps) to 2.85% in the quarter ended June versus 2.83% a year ago.

Gross non-performing assets (GNPAs) improved to 9.69% from 10.90%. Net NPAs stood at 3.47% compared to 3.76%.

Fresh slippages in the reporting quarter stood at Rs 4,204 crore.

Cash recovery stood at Rs 657 crore and upgradation at Rs 1,647 crore. The recovery target in FY22 is Rs 5,000 crore, Chunduru said.

Provisions and contingencies for Q1 FY22 stood at Rs 2,290 crore as against Rs 2,384 crore a year ago.

Total capital adequacy ratio (CRAR) increased by 247 bps to 15.92%.

Advances grew 6% to Rs 3,89,625 crore in the June quarter compared to Rs 3,66,787 crore a year ago. Total deposits grew 10% to Rs 5,40,082 crore as of June 2021 as against Rs 4,89,109 crore in June 2020.

Chunduru expects demand in corporate loans to improve going ahead. The lender has a corporate loan pipeline of Rs 20,000 crore which will be disbursed in third and the fourth quarter of the current fiscal.

In the past one year, the lender has rationalised 230 branches and is looking to rationalise 70 more branches during this fiscal, Chunduru added.