Indian Bank

Dear esteemed Stakeholders,

It is with great pride, on behalf of the Board of Directors, theManagementteam, and the dedicated members of IndianBank, that I present our Annual Report for FY25. It gives me immense pleasure to share with you that amidst the backdrop of global challenges marked by intensified trade and tariff tension and volatility in the financial markets the Bank has demonstrated remarkable resilience and navigated these complexities with resounding success.

At Indian Bank, we firmly are deeply connected to the value we create for our stakeholders, including shareholders, employees, customers, and the wider community. Before we delve into the performance highlights of the Bank, let us first take a look at the prevailing global and domestic macroeconomic landscape.

Global Economy: Uncertainty Prevails

The global economy continues to be characterised by prolonged and challenging period of unprecedented shocks. The IMF projects global growth at 2.8% in 2025 and 3.0% in 2026, which is below historical (2000-19) average of 3.7%.

Inflation, down from multi decade highs, followed a gradualbutunevendecline toward central bank targets. As per the IMF, global headline inflation is expected to reach 4.3% in 2025 and 3.6% in 2026 with significant upward revisions for advanced economies and slightly downward revisions for EMDEs (Emerging Market and Developing Economies) in 2025. Global central banks have cautiously eased monetary policy, but actions remain divergent as central banks responded to their own evolving growth-inflation dynamics. Escalation of trade tensions and high levels of policy uncertainty are expected to have significant impact on global economic activity. Going forward, expectations are that the global growth will weaken further.

Indian Economy: Remains Resilient

Despite the global headwinds, the Indian economy remained resilient with strong domestic growth with aggregate demand in the economy remaining strong. The country?s economic growth accelerated to 6.15% Y-o-Y in Q3FY25, up from an upwardly revised economic growth of 5.58% in the previous quarter. However, it is lower than the growth rate of 9.51% Y-o-Y (revised) in the same period last year. The RBI lowered the growth projection for FY26 by 20 bps to 6.5%, taking into account headwinds from external sector, including recent tariffs imposed. While the GDP growth of India is below its potential, it remains the fastest-growing major economy in the world. Inflationary pressures have begun to ease, with retail inflation falling to an almost six-year low of 3.34% in Mar?25 remaining within RBI?s tolerance band. The near-term inflation outlook has improved due to moderation in food prices. The RBI has brought down inflation projection for FY26 to 4% from 4.2% earlier as prospects for agriculture remain bright due to healthy reservoir levels and crop production.

During FY25, the high-frequency indicators showed mixed trends. The industrial growth (IIP) decelerated. Some indicators are also signalling uptick in production activity, with improvement noted in manufacturing PMI, e-way bill, higher GST collection. The Indian rupee, after months of depreciation, appreciated in Mar?25 even in the face of global turmoil indicating investor confidence and strong forex reserves.

Looking ahead in FY26, with inflation under control, a stable currency, proactive monetary support, and reform-led fiscal momentum, India?s economic fundamentals remain solid. These factors together form a strong shield, insulating the country from the worst of global disruptions and setting the stage for sustainable, inclusive growth.

Banking Sector

Global factors such as the pause in rate cuts by the U.S. and the ongoing tariff war led to a flight of FDI, resulting in tight liquidity conditions in the country. However, the Reserve Bank of India (RBI) responded proactively with a range of measures, including a reduction in the Cash Reserve Ratio (CRR), repo rate cuts, adjustments in regulatory norms, Open Market Operations (OMO), Variable Repo Rate (VRR) and currency swaps. These timely interventions effectively stabilized the situation. In addition, the Government?s strong push for infrastructure development and tax reliefs in the budget are fuelling credit growth and deposit mobilization. The RBI?s proactive regulatory measures including easing liquidity norms, revising risk weights for NBFCs and releasing the draft guidelines on gold lending and stressed asset securitisation are aimed at reinforcing thefinancial Against this background of the macroeconomic scenario, I would like to highlight your Bank?s financial performance during FY25.

Bank's Performance - FY25

I am happy to share that despite the challenging market scenario the Bank delivered a strong and healthy performance in the financial year 2024-25, marked by record highest net profit and exceptional asset quality. Our total business crossed 13.25 lakh crore, reflecting a strong year-on-year growth of 8.5 percent. Our deposit base expanded to 7.37 lakh crore, up by 7 percent, while gross advances stood at 5.88 lakh crore, registering a healthy 10 percent growth.

We maintained a robust credit-deposit ratio of nearly 80 percent, underscoring efficient fund deployment. This growth was primarily driven by our focused thrust on the Retail, Agriculture and MSME (RAM) sectors, which now contribute over 64 percent of our domestic credit portfolio. Retail and agriculture loans grew by 14 percent each, while MSME credit rose by 12 percent, showcasing our inclusive and balanced growth strategy. Under priority sector lending, Indian Bank has once again exceeded expectations. Our Priority Sector advances reached 44 percent of the Adjusted Net Bank Credit (ANBC) exceeding the mandated 40 percent by RBI. Credit to agriculture formed over 19.5 percent of ANBC.

We maintained our strong commitment to inclusive finance through focused lending to small and marginal farmers, weaker sections and micro-enterprises. Notably, our total disbursement to Self Help Groups and Joint Liability Groups during FY25 stood at 15,210 crore, supporting 3.22 lakh SHG/JLGs and positively impacting 37.96 lakh members. As part of the Government?s "Lakhpati Didi" initiative, Indian Bank launched a tailor-made scheme to finance women-led Agri and MSME enterprises. As of March 2025, 17,931 women-led units have been supported with 191 crore under this initiative, making us the top-performing public sector bank under the scheme in terms of disbursed amount.

Our MSME portfolio also saw robust traction, with the Bank achieving 104 percent of its annual target in Mudra loan, disbursing 8,760 crore against the target of 8,400 crore. Under the Stand-Up India scheme, we achieved 118 percentoftheallocatedtarget,reaffirming our commitment for fostering entrepreneurship at the grassroots level.

This year, we registered one of the highest profit as Net profit surged by 35 percent to 10,918 crore. Operating profit grew 13 percent to 18,998 crore and net interest income increased by 8 percent to 25,176 crore. These results reflect our sound fundamentals and prudent management.

Our cost of deposits rose moderately to 5.12 percent amidst tight liquidity conditions but this was balanced by an improved yield on advances at 8.75 percent and yield on investments at 7.17 percent. Despite industry-wide margin pressures, we sustained a healthy domestic net interest margin of 3.51 percent.

Asset quality improved remarkably. Gross NPA declined to 3.09 percent and net NPA fell to a record low of 0.19 percent. Our provision coverage ratio, including technical write-offs, rose to 98.1 percent one of the best among public sector banks underscoring our strengthened balance sheet.

Return on Assets improved to 1.32 percent and Return on Equity jumped to 20.76 percent. Earnings per share reached 81.06, while the book value per share increased to 423, reflecting the value we consistently deliver to shareholders. In line with our improved performance, the Board has recommended a dividend of 16.25 per share for the year.

Our capital adequacy ratio stands strong at 17.94 percent,ensuringampleheadroomfor growth. During 17.94 the year, we raised 10,000 crore in two tranches through the issuance of long-term infrastructure bonds, further strengthening our long term resoursces. FY25 has also been transformative on the digital front. Our total digital business more than doubled to 1.67 lakh crore. We launched 121 digital journeys, utilities & processes covering retail, agriculture, MSME, and corporate segments. Today, 95 percent of new savings accounts are opened digitally, and 92 percent of all transactions are conducted through digital channels. Our mobile banking app, IndSMART, was further upgraded with more than 280 functionalities with more than 1.94 crore users and a 4.3 rating on app stores. We launched a dedicated mobile banking platform for Corporate clients and expanded our fintech network to 167 firms, significantly enhancing our digital lending, payments and analytics capabilities.

We have invested in AI chatbots, cloud migration, CRM platforms, and are integrated with RBIH?s Unified Lending Interface, which processed over 5,000 crore worth of business. All these initiatives are part of "Project WAVE" our vision to build a World of Advanced Virtual Experience for our customers.

We have been focussing on strengthening our core IT infrastructure and this was further reinforced with the successful deployment of a dual private cloud infrastructure. This enabled seamless year-end operations and allowed for temporary infrastructure provisioning without incurring additional costs showcasing our agility and cost efficiency.

The Bank?s strategy for Financial Inclusion sets forth a vision of universal access to formal financial services. It emphasizes making financial services available, accessible and affordable in a safe and transparent manner. This multi-dimensional approach is supported by key initiatives like Pradhan Mantri Jan Dhan Yojana (PMJDY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and crucially, the Atal Pension Yojana (APY) a flagship pension scheme for the unorganized sector.

As of March 2025, we operate 235.29 lakh PMJDY accounts, with 18.52 lakh new accounts added during the year. Under Social Security Schemes, Bank enrolled 21.02 Lakh Customers in PMJJBY and 33.05 Lakh Customers in PMSBY till 31st Mar?25. In Micro Pension Scheme APY, during FY25 Bank has added 6.38 lakh fresh enrolments with an Average Account Per Branch (AAPB) of 106 against proportionate target of 90 as of 31st Mar?25. Indian Bank remains steadfast in its mission to empower communities by fostering financial literacy and enhancing employability. The Bank is providing training and awareness programs to help individuals, particularly in rural areas, acquire skills and knowledge for better financial decisions and improved livelihoods. Our skill development initiatives through Indian Bank Self Employment Training Institutes (INDSETIs) trained 36,565 candidates against a target of 35,601, achieving 103 percent through 1,203 training programmes. Our 42 Financial Literacy Centres reached over 1.6 lakh citizens. At Indian Bank, we believe that the growth of the Bank is deeply rooted in the growth of its employees. Recognizing this, we continue to invest in robust learning and development programmes that build capabilities across all levels. Special emphasis has also been placed on nurturing women leaders, fostering an inclusive and empowered workforce that drives sustainable success. In this direction, we launched special program "Rising Star" to support leadership grooming and create the future leadership pipeline. The Bank has two Centre of Excellence for skill building wherein capacity build up was done in functional of credit and collections and people excellence. We also initiated a Leadership Board under the Rewards & Recognition Scheme, trained 217 women leaders in 7 batches, and conducted 81 cross-bank training programmes with 1,959 participants. Altogether, 23,196 unique employees were trained through 1,392 training programmes this year.

Our efforts have been recognized with numerous accolades.

The Bank received prestigious SKOCH Award for "Project WAVE", - Indian Bank's digital transformation journey and for "SMA Collection Proclivity Predictor"- a model built to predict the probability of default for Special Mention Accounts (SMA) and reduce risks by outlining a targeted collection journey.

At Tamil Nadu Leadership Awards 2024, the Bank received CEO of the Year Award and Best Public Sector Bank Award.

At the EASE 6.0 Reforms Index awards, the Bank was awarded as the second-best improver in the Top Improver category and it secured the third position in the People & HR Operations category.

The Chief Financial Officer of Indian Bank was honoured with the prestigious Best CFO Award at the ASSOCHAM 3rd Vibrant Bharat CFO Summit & Awards held in New Delhi.

The Bank was recognized at ASSOCHAM's 11th MSME Excellence Award & Conference in New Delhi, receiving accolades for Excellent Customer Service for MSMEs and being named the Best Technology Enabler of the Year for MSMEs.

Indian Bank was honoured during the ET Now Best BFSI Brands 2025 Conclave.

The Bank has received The Economic Times CIO Award for Enterprise IT Excellence 2025 for its exceptional achievement in implementing cutting-edge technology for a future-proof digital infrastructure.

• The Bank won the 5th edition of Most Trusted Brands in India 2025-26 by Marksmen Daily. Indian Bank is committed to more than just financial success we actively give back to the community through impactful CSR initiatives. This year, we donated an ambulance to Rajiv Gandhi Government General Hospital and provided computers, lab infrastructure etc to schools in Perambur, Karnal, and Mylapore. We sponsored cervical cancer vaccines in Meerut, supported physically challenged women and girls, funded 750 dialysis procedures in Mumbai and constructed a 200-meter athletic track at IBEA School, Kurichi. Additionally, we contributed to environmental sustainability by sponsoring sapling plantations around the Jagannath Shrine in Chennai. Through these efforts, we continue to promote social responsibility, inclusion and sustainable development.

Under our environmental sustainability efforts, we installed rooftop solar panels in 80 of 85 identified premises, expected to save 1.25 crore in electricity costs annually. We also installed rainwater harvesting systems in 39 locations and implemented a Records Management System in 3,537 branches, with work progressing in 2,319 additional branches.

As of March 2025, our physical infrastructure includes 5,901 brick and mortar branches, 3,078 ATMs, 2,190 BNAs and 3,102 passbook kiosks across the country. We serve customers through 20 Corporate Business Correspondents and a total of 14,667 BCs out of which 3,725 were deployed in FY25, supporting ease of banking across urban and rural India.

Additionally, we incorporated Indbank Global Support Services Limited as a Wholly Owned Subsidiary with the strategic objective of providing operational support and sourcing services to the Bank.

Ongoing Initiatives:

Our Bank is actively working on several projects that will strengthen our competitive edge in both business and operational capabilities. These initiatives span across specialised verticals, digitisation, process and product enhancements, operational transformation and HR transformation.

One of our key focus areas is the expansion of Resource Acquisition Centre (RACs). Currently, we have 100 RACs functioning with 403 dedicated Relationship Managers (RMs) and we plan to add 25 new RACs in FY26 to further strengthen our CASA portfolio and customer reach. We are embracing digital transformation to provide seamless banking solutions to our customers. One of the key upcoming initiatives is the MSME Customer App, which will serve as a comprehensive omni-channel platform catering to all banking requirements of MSMEs, including lending and beyond-lending services. To streamline MSME loan renewals, we are introducing MSMEAutoRenewal,ensuringefficiencyand ease for our customers.

The Bank is also focused on leveraging new-age tech such as AI/ Gen-AI and has developed a Knowledge Engine to assist the Employees. Additionally, we are in the process of developing an AI powered collections and recovery agent using Agentic AI.

Indian Bank has embarked on a digital transformation journey through the implementation of a cloud based NGCC platform in partnership with Teleperformance. The initiative enhances customer service across voice and digital channels, integrates advanced CRM and analytics and supports multilingual 24x7 operations from multiple locations. NGCC is poised to significantly improve response time, service quality and customer satisfaction at scale.

Our focus on financial inclusion will be further strengthened by introduction of four variants of MUDRA schemes in digital mode. For micro and small enterprises these products will simplify the credit accessibility. The renewal process for Kisan Credit Card holders will also be made more efficient through KCC Renewal. For our employees, we are enhancing benefits with digital loan processing for Staff Vehicle Loan and Staff Housing Loan. Supporting affordable housing and agricultural financing remains a priority, with initiatives such as PMAY and Agri Stack. We are also strengthening financial support for agricultural and allied sectors through Supply Chain Financeand the Agro Processing Module (OD/TL). Tailored financing solutions for agro-processing and storage infrastructure will be available through IB Star Agro Mill and Cold Storage (OD/TL).

To expand credit accessibility for professionals and businesses, we are introducing Loan Against Warehouse

Receipts and Ind Professional Special. Additionally, PMEGP and Personal Loan in seven variants will offer diverse loan products to meet varied customer needs. Loan Against Security, including NSC, KVP and Shares, along with IB Health Care will enhance financial flexibility for individuals.

Further supporting equipment financing and agricultural development, we are launching IND Equip & Wheels and Agri Term Loan, ensuring that our customers have access to the financial resources they need to grow and succeed.

Way Forward:

Going ahead, the Bank?s emphasis will be to adopt a multi-pronged approach focusing on Sustainable Business Growth, Customer Service Excellence, Digital Onboarding and Compliance Culture. This will include strengthening regulatory frameworks, leveraging technology for better customer outreach and operational efficiency and supporting key sectors like MSME, Agriculture and Retail customers.

Acknowledgement

I will take this opportunity to express my gratitude to all the members of Indian Bank family, our esteemed customers and various stakeholders for their support and contributions to the Bank?s performance and success. I would also like to acknowledge the support and guidance given by the Government of India, RBI and other regulatory bodies. We look forward to your continued support in achieving future goals.