Indian Bank Q4 FY25 Profit Jumps 32% Amid Persistent Staff Shortage
Indian Bank Q4 FY25 profit rises 32% YoY to Rs. 2,956 crore. NPAs improve sharply. Board approves record Rs. 16.25/share dividend.
Author: Neha Bodke
Published: 17 hours ago
Indian Bank reported strong financial results for the quarter ended March 31, 2025 (Q4 FY25), with its standalone net profit rising 32% year-on-year to Rs. 2,956 crore. The public sector lender demonstrated a firm grip on asset quality, cost control, and credit growth—leading to one of its best quarterly performances to date.
The results were declared after the bank’s board meeting on May 3, 2025. With a sharp drop in bad loan provisioning and improved interest income, Indian Bank beat street expectations. It also declared the highest dividend in its listed history, reflecting strong capital buffers and profitability.
Image: Indian Bank’s Q4 FY25 net profit rose 32% YoY to Rs. 2,956 crore, supported by a solid 8.4% increase in interest income to Rs. 15,856 crore.
Growth in Profitability
Indian Bank's net profit for Q4 FY25 rose from Rs. 2,247 crore in the same quarter last year to Rs. 2,956 crore, largely due to an 8.4% increase in interest income, which stood at Rs. 15,856 crore for the quarter. This was aided by growth in retail, agriculture, and MSME lending, along with better margins. Operating profit for the quarter rose steadily, and the cost-to-income ratio remained under control.
Provisions for non-performing assets (NPAs) declined significantly to Rs. 794.60 crore, a 36% reduction from the previous year. This reduction was possible due to improvements in loan recoveries, resolution of stressed accounts, and a more stable borrower environment.
Sunil Kumar, Tamil Nadu BEFI President in a conversation with Kanal stated, “Instead of creating job opportunities for regular employees, the bank is increasingly relying on casual or outsourced workers, effectively replacing permanent staff with multiple temporary workers. This may contribute to higher profits, but it also places a significant strain on frontline staff, who are directly dealing with customers.”
He further added, “The shortage of manpower among frontline employees is particularly problematic, especially in rural and remote areas. This shortage compromises the quality of service and the well-being of staff, who are already facing significant challenges in their daily roles.”
Image: Provisions for bad loans dropped 36% YoY, while gross and net NPAs improved to 3.09% and 0.19% respectively—among the best in the PSU banking space.
Remarkable Improvement in Asset Quality
Asset quality showed a major turnaround, with Gross NPA falling to 3.09% as of March 2025, compared to 3.95% a year earlier. Net NPA improved sharply to just 0.19%, one of the lowest levels among public sector banks.
The bank’s Provision Coverage Ratio (PCR) reached a strong 98.10%, indicating a healthy buffer for future contingencies. The capital adequacy ratio (CRAR) under Basel III norms also improved to 16.77%, showing the bank is well-capitalized for further growth.
[Read more: Indian Bank Employees Protest Staff Shortage, Announce Nationwide Strike]
Balance Sheet Expansion
Indian Bank’s gross advances expanded to Rs. 5.88 lakh crore, marking a 10.1% year-on-year growth. Deposit base stood at Rs. 7.37 lakh crore, reflecting a 7% increase. The CASA (Current Account Savings Account) ratio remained stable at 40.42%, maintaining a low-cost deposit advantage.
Return on Assets (ROA) stood at 1.35%, while Return on Equity (ROE) came in at 21.02%, demonstrating stronger profitability and efficient use of shareholder capital.
Image: Advances grew 10.1% YoY to Rs. 5.88 lakh crore, while total deposits reached Rs. 7.37 lakh crore, maintaining balance sheet strength and CASA stability.
Record Dividend Declared
The Board of Directors recommended a final dividend of Rs. 16.25 per share, which amounts to 162.5% of the face value—its highest-ever payout. The dividend is subject to shareholder approval at the upcoming annual general meeting.
Future Outlook
Indian Bank continues to deepen its focus on the retail and MSME segments while pushing digital transformation. The bank has already launched three Digital Banking Units (DBUs) in line with RBI’s initiative, and is expected to roll out more in the coming quarters. Management emphasized disciplined growth, improved recoveries, and tech-led customer experience as strategic pillars for FY26. However, the unresolved issue of staff shortage stands in contrast to the bank’s ambitious growth story.
[Read more: https://www.indianbank.in/wp-content/uploads/2025/05/Audited-Financial-Results-for-Financial-Year-ended-on-March-31-2025-Consolidated.pdf]
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