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Saturday, October 18, 2008

Depreciation, tax nibble away Indian Bank’s profits

‘Bank will not drop lending rates unless deposit rates fell first’.

— Bijoy Ghosh

Mr M.S. Sundara Rajan, Chairman and Managing Director, Indian Bank, flanked by the Executive Directors, Mr Anup Sankar Bhattacharya (left), and Mr A. Subramanian, at a press conference in Chennai on Saturday.

Our Bureau

Chennai, Oct. 18 A 47 per cent growth in advances helped Indian Bank turn in an operating profit of Rs 532 crore for the quarter ended September – 55 per cent more than in the corresponding quarter of last year.

But provision for depreciation, and tax, took away most of it and the bank was left with a net profit of Rs 283 crore, only 14 per cent higher.

Sources explained that the bank decided to take a part of the deferred tax liability in the second quarter itself, whereas for last year, it was taken only in the final quarter. As a result, ‘tax expense’ rose to Rs 140 crore, compared with Rs 46 crore previously.

Also, the bank provided Rs 247 crore for depreciation (mainly of the value of investments in bonds) as against nil in the corresponding quarter of last year.

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