Indian Bank, the state-owned public sector lender, announced its financial performance for the third quarter of fiscal year 2026 on Thursday, showcasing robust growth across key metrics. The bank reported a net profit of ₹3,061.48 crore for the quarter ended December 2025, marking a significant increase of 7.3% compared to ₹2,852.36 crore in the same period last year.
Financial Highlights and Performance Indicators
The bank's Net Interest Income (NII), a crucial measure of core profitability, witnessed a healthy rise of 7.5% year-on-year, reaching ₹6,895 crore in Q3 FY26 from ₹6,414 crore in the previous year. This growth underscores the bank's effective management of interest-earning assets and liabilities.
Pre-Provisions Operating Profit (PPOP) for the December quarter also saw an upward trend, increasing by 5.77% to ₹5,023.58 crore from ₹4,749.42 crore on a year-on-year basis. This indicates strong operational efficiency before accounting for potential loan losses.
Provisions and Asset Quality Improvements
In a positive development, provisions and contingencies for Indian Bank declined to ₹857.02 crore in Q3 FY26, down from ₹738.60 crore in the previous quarter and significantly lower than ₹1,059.13 crore in the year-ago period. The Provision Coverage Ratio improved by 19 basis points year-on-year to 98.28% in December 2025, up from 98.09%, reflecting enhanced buffer against bad loans.
Asset quality showed marked improvement sequentially during the quarter. The Gross Non-Performing Assets (NPA) ratio decreased to 2.23% from 2.60% quarter-on-quarter, while the Net NPA ratio dropped to 0.15% from 0.16%. In absolute terms, gross NPAs fell by 11.56% to ₹14,268.38 crore from ₹16,134.66 crore, and net NPAs declined by 1.56% to ₹967.55 crore from ₹982.98 crore quarter-on-quarter.
The slippage ratio, indicating new bad loans, decreased to 0.69% in December 2025 from 0.79% in September 2025 and 0.78% in December 2024, showcasing better loan monitoring and recovery efforts.
Capital Adequacy and Business Growth
Capital Adequacy Ratio of the public sector lender improved by 66 basis points to 16.58%, with CET-I ratio rising by 127 basis points year-on-year to 14.54%. Tier I Capital also improved by 77 basis points year-on-year to 14.54% in December 2025, indicating strong capital buffers to support future growth.
On the business front, Gross Advances increased by 14.24% year-on-year to ₹6,38,848 crore in December 2025 from ₹5,59,199 crore in December 2024. Total deposits grew by 12.62% year-on-year, reaching ₹7,90,923 crore compared to ₹7,02,282 crore. Current, Savings, and CASA deposits expanded by 19.13%, 8.45%, and 9.86% year-on-year respectively, with the Domestic CASA ratio standing at 39.08% as of December 31, 2025. The Credit-Deposit ratio was reported at 80.77%.
Branch Network and Market Performance
Indian Bank operates an extensive network with 5,965 domestic branches, including 2,001 in Rural areas, 1,592 in Semi-Urban regions, 1,191 in Urban centers, and 1,181 in Metro categories. The bank also maintains 3 overseas branches and 1 International Banking Unit (IBU) at Gift City. Additionally, it has 5,624 ATMs and BNAs, along with 16,247 Business Correspondents (BCs) to enhance customer reach and service delivery.
In terms of stock market performance, Indian Bank share price has demonstrated strong momentum. The stock gained 11.55% over the past month and surged 40% in the last six months. On a yearly basis, the PSU bank stock has jumped 69%, delivering multibagger returns of 867% over the past five years. At 1:45 PM on the announcement day, Indian Bank shares were trading 2.46% higher at ₹869.80 apiece on the BSE, reflecting investor confidence in the bank's financial health and growth prospects.
