Public sector lender Indian Bank expects to generate Rs 1,000-1,500 crore in treasury income during the current financial year, after recording better-than-expected earnings from the segment in the first quarter, Managing Director and CEO Binod Kumar said. The bank had initially expected Rs 300 crore of treasury income in Q1, but earned around Rs 500 crore.
Treasury income comprises trading income and interest income from investments. The bank’s latest target comes as it also seeks to strengthen its loan book through retail, agriculture and MSME lending, which currently accounts for 65 per cent of its overall advances.
Gold Loan Book Seen Crossing Rs 1.5 Lakh Crore
Indian Bank expects its gold loan portfolio to cross Rs 1.5 lakh crore this financial year, from around Rs 1.25 lakh crore currently. Kumar expects the segment to grow by about 20 per cent, with the increase driven by higher loan volumes rather than gold prices. The gold loan book grew around 30 per cent last year, helped by a sharp rise in gold prices. Kumar expects growth to moderate this year, with the expansion coming primarily from higher tonnage.
The bank is also targeting an improvement in asset quality, with gross non-performing assets (NPAs) expected to fall to 1.5-1.6 per cent and net NPAs to 0.15-0.2 per cent by the end of FY27. It plans to sell around Rs 200 crore of bad loans to an asset reconstruction company during the year.
Overseas Fundraising Adds To Growth Plan
Indian Bank has raised USD 400 million through four-year bonds issued by its GIFT City branch and plans to raise USD 1 billion from overseas markets by the end of 2026 under the special regulatory window. The bank expects to raise the remaining USD 600 million during the third quarter.
The lender also expects FCNR(B) deposits to reach around USD 2 billion by August 31, from USD 1.5 billion already mobilised. The bank’s low-cost current account and savings account (CASA) deposits account for around 40 per cent of total deposits, while management continues to focus on improving branch-level mobilisation.