Indian Bank targets sub-2% gross NPA, sees strong Q2 FY26 growth

Indian Bank announced its Q2 FY26 results, reporting total business growth of 12.34% to reach INR 13.97 trillion, with sequential growth of 3.85%. Advances grew by 12.65% year-on-year and 3.19% sequentially. The bank maintained its CASA ratio at 38.87% and achieved a healthy CD ratio of less than 80%. Net profit increased by 1.51% sequentially and 11.49% annually, while operating profit rose by 1.40% sequentially and 2.31% annually.

A key highlight is the revision of gross NPA guidance to less than 2%, down from the previous target of less than 3%. The bank's provision coverage ratio improved from 98.20% to 98.28%, and credit cost decreased from 0.28% in Q1 to 0.26% in Q2. Gross NPA has fallen by 41 basis points from 3.01% to 2.60%, and net NPA stands at 0.16%. The bank also made a provision of INR 400 crore for SMA 1 in Q2.

Digital initiatives show significant progress, with 132 digital journeys launched and 166 fintech partnerships. The mobile app, INDSMART, has a rating of 4.4, and digital transactions have improved from 92% to 94% of total transactions. The bank also reported opening 1.77 lakh accounts in the salary segment and noted increased digital adoption in the MSME category, rising from 45% to 57%.