'No sign of MSME stress despite US tariffs, West Asia tensions'

Indian Bank reported an 11% year-on-year rise in its net profit to €12,156 crore in FY26, driven by higher interest income from its core business.

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Managing Director and Chief Executive Officer Binod Kumar tells Narayanan V about key profit drivers, FY27 outlook, and the impact of the West Asia conflict on its portfolio. Excerpts:

What are the key highlights of FY26 performance?

Our total business grew 12.79% (14.95 lakh crore) with deposits up 12.29% (8.28 lakh crore) and advances 13.43% (% 6.67 lakh crore). A key highlight was CASA. In March 2025, our CASA ratio was 40.17%, which fell to 38.28% in June 2025. We then focused on improving CASA, and it has steadily risen to 38.87% in September, 39.08% in December, and now 39.67%. On the advances side, the RAM (retail, agri, MSME) segment was a key driver. Within this, retail grew 18%. MSME advances, where we earlier saw 5—6% growth, rose 16.39% this year. Corporate lending also improved — from 3% growth last March to 9.29% this year, despite shedding low-yielding advances. Despite a 125-bps rate cut, our net interest income increased, and domestic net interest margin declined only 12 bps to 3.36%.

How do you handle the CASA mobilisation challenge?

After the dip in June 2025, we focused sharply on CASA. There are structural shifts. Rising financial literacy is turning people into investors, rather than savers, and government transactions are moving to just-in-time flows. These are realities we have to accept.