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Indian Bank withdraws a dividend of Rs 6 per share; the stock drops more than 4%

NEW DELHI: Shares of slid as much as 4.46% on Thursday after the state-run lender withdrew a dividend of Rs 6 per share.

The bank’s board had recommended the dividend on May 10 when reporting results for the March quarter. It reported a 59% drop in net profit to Rs 131.98 crore for the quarter ended March 31 as provisions for bad debts nearly tripled.

The bank had reported a profit of Rs 319.70 crore during the same period of 2016-17.

Total revenue in the quarter, however, rose to Rs 4,954.20 crore from Rs 4,601.89 crore in the same period a year ago.

Gross non-performing assets (NPA) in the quarter fell slightly to 7.37% from 7.47%, but provisions for bad debts tripled.

In absolute terms, the gross NPA was Rs 11,990.14 crore, down from Rs 9,865.13 crore a year ago.

Public sector banks have been rocked under piles of NPAs. In its latest edition of the Financial Stability Report, RBI said state-run lenders accounted for 85% of almost 6,500 cases of fraud, amounting to more than Rs 30,000 crore.

RBI also said PSBs lacked effective credit screening and monitoring, leading to a high volume of loan fraud. The regulator also pointed out that while the operational risk oversight frameworks of public and private sector banks were not different, the significant differences achieved in operational risk called for deeper introspection of the effectiveness of processes among banks. public lenders.

As of 10:58 a.m., the company’s shares were each trading at 336.15 on the BSE, down 3.27%.