Chennai: Indian Bank met or exceeded nearly all of its FY26 guidance metrics, with the cost-to-income ratio the lone miss at about 46% versus a 45% target, the public sector lender's MD & CEO Binod Kumar told TOI.
Core Profitability Stable
The bank's core profitability remained stable, with net interest margin (NIM) at 3.24% for FY26—above the guided range of 3.15%–3.20%. Despite a 125-basis-point rate cut, Return on assets (RoA) held largely steady at 1.31%, compared with 1.32% a year earlier. Net interest income grew by 11% in Q4 and 7% in FY26, he said.
Asset Quality Improvement
The bank attributed the performance to broad-based growth across segments and improved asset quality. Its stress book declined sharply to 4.73% in FY26 from 8.06% a year earlier, while gains were seen across deposits, CASA (current account savings account) ratio, recoveries, and both gross and net NPAs. Its FY26 net profit grew by 11% to Rs 12,156 crore (Rs 10,918 crore in FY25), while the March 2026 quarter profit grew by 5% to Rs 3,103 crore. Kumar said profitability in Q4FY26 was partly tempered by additional provisions of around Rs 600 crore during the year, including Rs 310 crore linked to exposures sensitive to the West Asia situation. He described these as precautionary, noting that there is no visible stress so far, but flagged risks if geopolitical tensions persist.
Business Growth and Lending
Its total business is on the verge of crossing Rs 15 lakh crore (Rs 14.95 lakh crore in FY26, up 13% over FY25). Corporate lending recovered, growing 9.3% from 3% a year earlier, as the bank cut low-yield assets and reduced NBFC exposure by Rs 8,000–9,000 crore. Retail and MSME lending remained key drivers.
MSME and Retail Focus
MSME advances grew 16.3%, supported by sanctions of about Rs 48,000 crore to roughly 6 lakh accounts. The bank reiterated its strategic focus on RAM (retail, agriculture, and MSME), targeting an increase in MSME share to 20% and retail to 25% over the next five years—both already tracking ahead of plan.
Deposit Mobilisation
CASA mobilisation, which had come under pressure in Q1FY26, improved steadily through the year to 39.67% by March, following targeted interventions such as expansion in salary accounts, revival of 3.4 million inoperative accounts, and increased deployment of QR codes and POS machines to capture transaction balances.
Outlook
On the macro outlook, Kumar remained optimistic despite West Asia concerns, saying the government's focus on sustaining GDP growth should support credit demand and banking sector expansion. The bank is projecting deposit growth of 9%–11% and advances growth of 11%–13%, with a reassessment planned during September if needed.
