The bank’s net profit grew by 24% to ₹2,973 crore when compared with ₹2,403 crore in the year-ago period, supported by higher income and lower provisions.
“The results are in line with our expectations, considering the challenges we’ve faced in achieving consistent growth in the past,” said Binod Kumar, MD & CEO of Indian Bank.
The Chennai-headquartered bank’s operating profit rose 6% to ₹4,770 crore in Q1 FY26 from ₹4,502 crore in the year-ago quarter. However, operating profit saw a slight sequential decline due to one-time gains in the previous quarter. “We had received interest from an income tax refund in the March quarter and incurred some half-yearly charges then, which were not applicable in June. These will reappear in the September quarter,” Kumar said.
Net interest income (NII) rose by 3% year-on-year to ₹6,359 crore (₹6,178 crore), while interest income increased 8% to ₹16,283 crore (₹15,039 crore). Non-interest income saw a sharp 28% jump to ₹2,439 crore, compared to ₹1,906 crore in Q1 FY25.
Total provisions declined by 14% to ₹1,797 crore (₹2,099 crore). Fresh slippages also reduced significantly to ₹1,334 crore from ₹1,928 crore a year ago. Of this, the agriculture segment accounted for ₹553 crore, MSME ₹513 crore and retail ₹262 crore. There was minimal slippage from large corporate accounts—just ₹6 crore.
Asset quality improved further, with Gross NPA falling to 3.01% and Net NPA down to 0.18%. The Provision Coverage Ratio (PCR) stood at a strong 98.2%. Credit cost dropped sharply to 0.28% from 0.81%, reflecting lower provisioning needs.
Total recoveries, including cash recoveries and upgrades, amounted to ₹2,059 crore in Q1, surpassing fresh slippages. This compares with ₹1,937 crore in the same period last year. “We’ve set a full-year recovery target of ₹5,500–6,500 crore. Of this, ₹2,059 crore has already been achieved in Q1. In AUCA (written-off accounts), we’ve recovered ₹800 crore against a full-year target of ₹2,000 crore,” Kumar said.
The slippage ratio declined from 1.5% in June 2024 to 0.9% in June 2025, indicating improved credit discipline.
Indian Bank’s total business grew 10.25% YoY to ₹13.45 lakh crore. Deposits stood at ₹7.44 lakh crore as of June 30, 2025, marking a 9.26% growth.
Notably, MSME credit showed strong traction, growing 14% in Q1 FY26 after remaining in the single digits previously. “Earlier, MSME credit growth was around 5–6%. It improved to 11–12% in March and has now reached 14%. We are encouraged, though we remain in a ‘wait-and-watch’ mode,” Kumar added.
The bank has projected a credit growth of 10–12% for FY26. The deposit growth is expected to range between 8% and 10%