IDBI Bank Q3 results: Net profit up

IDBI Bank on Thursday reported a standalone net profit of Rs 378 crore for December quarter of the current fiscal year as bad loans shrank.

The bank had posted a net loss of Rs 5,763 crore for the year-ago period.

Total income, however, fell during the quarter under review at Rs 5,932.25 crore as against Rs 6,215.60 crore in the same period of 2019-20 as interest income came down.

Interest income of the lender was down at Rs 4,563.98 crore during the quarter as against Rs 4,937.24 crore in the year-ago period, the bank said in a regulatory filing.

However, the net interest income grew 18 per cent to Rs 1,810 crore.

Net Interest Margin (NIM) improved by 60 basis points to 2.87 per cent in the third quarter as compared to 2.27 per cent in the same period a year ago, IDBI Bank said in a release.

The bank's asset quality improved as gross non-performing assets (NPAs) or bad loans reduced to 23.52 per cent of the gross advances as of December 31, 2020 as against 28.72 per cent by the same period a year ago and 25.08 per cent by the end of September 2020.

Net NPAs decreased to 1.94 per cent from 5.25 per cent.

In value terms, gross NPAs were worth Rs 37,559.39 crore at December-end 2020 as against Rs 49,502.68 crore by the end of same month a year ago. Net NPAs were valued at Rs 2,410.90 crore, lower than Rs 6,805.49 crore.

However, the overall provisions for bad loans and contingencies were kept higher at Rs 796.31 crore for December quarter 2020-21 as against Rs 521.95 crore kept aside for the year-ago period.

But out of this, the provisions for bad loans were substantially lower at Rs 48.52 crore as against Rs 440 crore a year ago.

Provision Coverage Ratio (including technical write-offs) improved to 97.08 per cent as on December 31, 2020 from 92.41 per cent a year ago and 95.96 per cent by the end of September 2020.

IDBI Bank said it raised equity capital of Rs 1,435.18 crore during the quarter through QIP.

The tier 1 capital improved to 12.22 per cent from 10.16 per cent and CRAR (capital to risk weighted assets ratio) improved to 14.77 per cent from 12.56 per cent, it added.

Among others, during the quarter ended December 2020, the bank has sold 23 per cent stake out of 48 per cent holding in its joint venture IDBI Federal Life Insurance Company (now Ageas Federal Life Insurance Company Ltd).

The post-sale holding in the joint venture is 25 per cent as on December 31, 2020, the bank said.

Further, in accordance with the RBI guidelines relating to COVID-19, the bank has cumulative COVID-19 related provision of Rs 436 crore as on December 31, 2020.

The provision made by the bank is more than minimum required as per the RBI guidelines, it said.

The bank has made provision of Rs 70 crore during the quarter (Rs 270 crore as on September 30, 2020 has been continued), towards the provisioning requirement for cases to be restructured under the resolution framework.

The cumulative provision is Rs 340 crore as on December 31, 2020, said the lender.