IDFC First Bank Q2 Net profit declines 73%

IDFC First Bank announced its July-September quarter results for fiscal 2024-25 (Q2FY25) on Saturday, October 26, reporting a decline of 73.3 per cent in net profit to ₹200.7 crore, compared to ₹751.3 crore in the corresponding period last year. The private sector bank was formed by merging the banking arm of project financer Infrastructure Development Finance Company (IDFC) and Capital First.

The bank said its net profit was impacted by prudent provisions of ₹568 crore, including Rs. 315 crore in the microfinance institution or MFI business (due to stress in the MFI industry) and ₹253 crore in one Maharashtra-based toll account (recent waiver of toll fees at Mumbai entry points).

IDFC First Bank's net interest income (NII)—the difference between interest earned and paid—rose 21 per cent to ₹4,788 crore compared to ₹3,950 crore in the year-ago period. The bank's core operating profit (excluding trading gain) grew by 28 per cent year-on-year (YOY) from Rs. 1,456 crore in Q2 FY24 to Rs. 1,857 crore in the year-ago period.

Including trading gains, core operating profit increased by 30 per cent year over year. Asset quality improved, as gross non-performing assets (NPA) were 1.92 per cent as of September 30, 2024, against 2.11 per cent as of September 30, 2023. The net NPA or bad loans was 0.48 per cent as of September 30, 2024, against 0.68 per cent as of September 30, 2023.

Provisions for Q2 FY25 stood at ₹1,732 crore, primarily because of a prudent provisioning buffer of ₹568 crore created for MFI business ( ₹315 crore). Operating income grew 21 per cent from Rs. 5,380 crore in Q2 FY24 to Rs. 6,515 crore in Q2 FY25. Operating expenses grew by 18 per cent YoY from Rs. 3,870 crore in Q2 FY24 to Rs. 4,553 crore in Q2 FY25.

Customer deposits increased by 32.4 per cent YoY from Rs. 1,64,726 crore as of September 30, 2023, to ₹2,18,026 crore as of September 30, 2024. Retail deposits grew by 37.4 per cent YoY to Rs. 1,75,300 crore from Rs. 1,27,595 crore in the year-ago period. CASA deposits grew by 37.5 per cent from Rs. 79,468 crore as of September 30, 2023 to Rs. 1,09,292 crore.

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IDBI Bank Q2 results: PAT up 39%

 

IDBI Bank on Friday reported a 39 per cent surge in net profit at Rs 1,836 crore for the quarter ended September 30, 2024 on the back of improvement in interest income.

The LIC-controlled bank had earned a net profit of Rs 1,323 crore in the year-ago period.

Total income rose to Rs 8,754 crore in the quarter under review, from Rs 6,924 crore in the same period a year ago, IDBI Bank said in a regulatory filing.

Net interest income of the bank improved to Rs 3,875 crore in the July-September quarter, from Rs 3,066 crore in the September quarter of 2023, registering a growth of 26 per cent.

Net interest margin increased to 4.87 per cent, from 4.33 per cent at the end of September 2023.

Asset quality of the bank witnessed an improvement with gross non-performing assets (NPAs) rising to 3.68 per cent of gross advances at the end of the September quarter of 2024, as against 4.90 per cent a year ago.

Net NPAs or bad loans also declined to 0.20 per cent, as against 0.39 per cent in the year-ago period.

Capital Adequacy Ratio of the bank increased to 21.98 per cent, from 21.26 per cent at the end of September 2023.

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ICICI Bank Q2 net profit jumps 14% on-year

 

ICICI Bank's Q2 FY25 standalone net profit rose by 14.5 percent on-year to Rs 11,746 crore, from Rs 10,261 crore in the year-ago period, exceeding Street expectations. A Moneycontrol poll of brokerages had forecasted the bank’s profit at Rs 10,989 crore.

The private sector lender’s net interest income (NII) increased by 9.5 percent to Rs 20,048 crore, but it missed Moneycontrol poll estimate of Rs 20,845 crore. ICICI Bank reported its net interest margin (NIM) at 4.27 percent, which fell from 4.36 percent seen in the previous quarter and 4.53 percent in the year-ago period.

The bank also reported non-interest income growth of 10.8 percent to Rs 6,496 crore, with a 13.3 percent rise in fee income to Rs 5,894 crore, largely driven by contributions from retail, rural, and business banking customers.

ICICI Bank's loan portfolio showed steady expansion, with domestic loans growing 15.7 percent year-on-year to Rs 12.43 lakh crore. Total deposits at the end of the quarter were also up 15.7 percent on-year at Rs 14.98 lakh crore, with the average CASA ratio recorded at 38.9 percent.

Asset quality continued to be robust, with the gross NPA ratio narrowing to 1.97 percent at September 30, 2024 compared to 2.15 percent on June 30, 2024. Net NPA ratio remained nearly flat at 0.42 percent at the end of September, against 0.43 percent in the previous quarter. The provisioning coverage ratio on non-performing loans stood at 78.5 percent.

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MD, CEO and Head of Banks in India (Updated)

We are sharing with you the List of Important Office Holders, Bank CEO and MD’s Name in India. It will help you in upcoming IBPS,SSC and other competitive exams.

Nationalised Banks

--> State Bank of India (SBI)–Shri Dinesh kumar Khara (Chairman)
--> Bank of Baroda (BoB)–Shri Debadatta Chand (MD & CEO)

--> Bank of India (BoI)–Shri Rajneesh Karnatak (MD & CEO)
--> Bank of Maharashtra (BoM)–Shri Nidhu Saxena (MD & CEO)
--> Canara Bank– Shri K Satyanarayana Raju (MD & CEO)
--> Central Bank of India–Shri Matam Venkata Rao (MD & CEO)
--> Indian Bank–Shri Shantilal Jain (MD & CEO)
--> India Post Payment Bank (IPPB)- Shri  R Viswesvaran (MD & CEO)
--> Indian Overseas Bank (IOB)–Shri Ajay Kumar Srivastava (MD & CEO)
--> Punjab and Sind Bank–Shri Swarup Kumar Saha (MD & CEO)
--> Punjab National Bank (PNB)–Shri Atul kumar Goel (MD & CEO)
--> UCO Bank–Shri Ashwani Kumar (MD & CEO)
--> Union Bank of India–Ms. A. Manimekhalai (MD & CEO)

Private Banks

-->  Axis Bank–Shri Amitabh Chaudhry (MD & CEO)
-->  AU Small Finance Bank –Shri Sanjay Agarwal (MD & CEO)
-->  Bandhan Bank–Shri Chandra Shekhar Ghosh (MD & CEO)
--> Catholic Syrian Bank–Shri Pralay Mondal (MD & CEO)
--> City Union Bank–Dr. N. Kamakodi (MD & CEO)
--> Development Credit Bank (DCB)–Shri Praveen Kutty (MD & CEO)

--> Dhanlaxmi Bank– Shri Ajith Kumar K.K. (MD & CEO)
--> Equitas Small Finance Bank - Shri Vasudevan P. N. (MD & CEO)
--> Federal Bank–Shri KVS Manian (MD & CEO)
--> HDFC Bank–Shri Sashidhar Jagdishan (MD & CEO)
--> ICICI Bank– Shri Sandeep Bakhshi (MD & CEO)
--> IDBI Bank Ltd–Shri Rakesh Sharma (MD & CEO)
--> IDFC First Bank–Shri V Vaidyanathan (MD & CEO)
--> IndusInd Bank–Shri Sumant Kathpalia (MD & CEO)
--> Jammu & Kashmir Bank–Shri Baldev Prakash (MD & CEO)
--> Karnataka Bank–Shri Srikrishnan Harihara Sarma (MD & CEO)
--> Karur Vysya Bank–Shri B Ramesh Babu (MD & CEO)
--> Kotak Mahindra Bank–Shri Ashok Vaswani (MD & CEO)
--> Lakshmi Vilas Bank–Shri Parthasarathi Mukherjee (MD & CEO)
--> Nainital Bank–Shri Nikhil Mohan (Chairman and CEO)
--> RBL Bank–Shri R Subramaniakumar (MD & CEO)
--> South Indian Bank–Shri P R Seshadri (MD & CEO)

--> Suryoday Small Finance Bank-- Shri R. Baskar Babu (MD & CEO)
--> Tamilnad Mercantile Bank– Shri Thiru K.V. Rama Moorthy (MD & CEO)
--> Ujjivan Small Finance Bank–Shri Sanjeev Nautiyal (MD & CEO)
--> Yes Bank –Shri Prashant Kumar (MD & CEO)

Last Updated on Jul,2024

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RBI's draft on tighter norms for infra project financing; what will its impact be?

The Reserve Bank of India (RBI) released a draft proposing tighter norms for lending and heightened monitoring for under-construction infrastructure projects.

On May 3, the RBI proposed that lenders should set aside higher provisions for all infrastructure projects that are under-construction, and also asked the lenders to ensure strict monitoring of any emerging stress.

Nifty PSU Bank index plunged around 3.2 percent. The top laggards on the index were Punjab National Bank, Canara Bank, Bank of Baroda and Union Bank, all slumping over four percent.

NBFCs such as REC, Power Finance and IREDA also crashed up to 12 percent as they are they focus on financing power projects, which are a significant part of the infrastructure pie.

Public-sector lenders are disproportionally impacted since public banks have a higher exposure to infrastructure loans.

The RBI note highlighted that the proposal was "taking into account the experience of banks with regard to financing of project loans."

Currently, India is seeing a boom in infrastructure and manufacturing projects, led by the central government's drive to boost the economy.

However, in the past, the domestic banking sector has faced large defaults on infrastructure loans, which pressured the banking system. RBI’s  proposed guidelines are an attempt to prevent any such cases reoccurring, given the ongoing thrust on infrastructure spending.

When a project is in the construction phase, the RBI proposed that lenders set aside a provision of five percent of the loan amount. This will reduced to 2.5 percent once a project is operational.

The required provisions will further be cut to one percent once the project has adequate cash flow to repay current obligations.

The lenders are required to make the five percent provision in a phased manner: two percent in FY25, 3.5 percent in FY26 and five percent by FY27.

Currently, lenders are required to have a provision of 0.4 percent on project loans that are not overdue or stressed.

Also, banks should have clear visibility on the date on which a project is expected to begin commercial operations and increase provisions in case operations are delayed. Any delay over three years in beginning an infrastructure project should change the classification of the loan from standard to stressed.

A Kotak Institutional Equities report said "the memories of the last corporate cycle are quite fresh." This, in turn, has created fresh concerns around the guidelines. However, the report noted that infrastructure loans in the banking system are relatively small at 8 percent of all loans compared to over 15 percent in FY15.

Additionally, the mix of these loans has a higher share of operational loans rather than under construction loans. Besides, the promoters that worked through the last corporate cycle have stronger balance sheets, added the brokerage.

JM Financial said the move will lead to lower returns for lenders in project finance and reduce the incremental appetite for such exposures, if the guidelines are implemented in the current form.

It is a prudent move from the risk management perspective, but it could be detrimental to growth in the infrastructure sector as it is capital-intensive.

When compared to private lenders, public-sector banks will see a larger impact if the draft is implemented. In a report, Kotak Institutional Equities noted that public banks have a higher exposure to infrastructure loans and less to commercial real estate.

On the other hand, private banks take an exposure to the sector through financing operational assets, instead of funding projects under construction.

JM Financial predicted that if the guidelines are implemented, the incremental credit costs for public sector banks would increased in the range of  12-21 bps.

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Will Bank Employees Get A 5-Days Banking ? Yes or No

The demand for a 5-day work week by bank employees is likely to be fulfilled soon, as an agreement in this regard has already been signed between the Indian Banks’ Association (IBA) and employee unions. Now, just the government’s approval is pending, which the bank employees expect to get through later in 2024.

Bank employee unions, like the United Forum of Bank Unions, have been pushing for a 5-day workweek with .......

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IDBI Bank's Q4 net profit surge 44%

IDBI Bank on Saturday posted a 44% increase in net profit at Rs 1,628 crore in Q4 of the financial year 2023-24 against Rs 1,133 crore in the same period a year ago.

The private lender's total income increased to Rs 7,887 crore from from Rs 7,014 crore in this period of the fiscal year 2022-23.

In 2022-23, its profit was at Rs 3,645 crore. Total income for fiscal year 2023-24 was at Rs 30,037 crore, up from Rs 24,942 crore in financial year 2022-23.

Net Interest Income of the bank increased by 12% in the March quarter to Rs 3,688 crore, as against Rs 3,280 crore in the fourth quarter of 2022-23.

Net non-performing assets (NPA) ratio was at 0.34 per cent as on March 31, 2024, against 0.92 which was a year ago.

The board of IDBI Bank following the announcement of the quarterly proposed a dividend of 15% subject to shareholders' approval.

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AU Small Finance Bank Q4 Profit falls 13%

 

AU Small Finance Bank on Wednesday reported a 12.7 per cent fall in profit at Rs 371 crore in March quarter due to increased provisions and a one-time expense for acquisition of Fincare. The bank's net profit was Rs 425 crore in the year-ago quarter.Net profit, excluding exceptional items, stood at Rs 428 crore in the fourth quarter of FY24, up 1 per cent compared to Rs 425 crore in the corresponding period a year ago.

The net profit of the bank in the full financial year 2023-24 rose by 7.4 per cent to Rs 1,535 crore as against Rs 1,428 crore in the previous fiscal.During the latest fourth quarter, the bank's total income increased to Rs 3,385 crore as compared to Rs 2,608 crore in Q4 of FY23, AU Small Finance Bank said in a regulatory filing.Net Interest Income (NII) grew 10 per cent to Rs 1,337 crore compared to Rs 1,213 crore in Q4 FY23, it said.

The bank declared a dividend of Rs 1 per share for FY24 subject to shareholders' approval.
Bank's asset quality witnessed a marginal deterioration with gross NPA (non-performing asset) at 1.67 per cent in March 2024 as against 1.66 per cent in March 2023.

Net NPA stood at 0.55 per cent of net advances in March 2024 as against 0.42 per cent in the year-ago period.As a result, provisions and contingency increased to Rs 132 crore from Rs 40 crore in the fourth quarter of preceding fiscal.

Besides, there was a one-time exceptional expenditure during the quarter. The expense amounting to Rs 76.80 crore, including stamp duty, has been incurred in relation to the acquisition and merger of Fincare Small Finance Bank, it said.

Considering the size, nature or incidence of these expenses, the same has been disclosed as exceptional item in the balance sheet, it added.During the reporting quarter, former RBI Deputy Governor H R Khan was appointed as chairman of the AU Small Finance Bank.The bank, during the quarter, started offering products and services to customers under the Authorized Dealer Category I (AD Cat-I) licence.

Sanjay Agarwal, founder, MD & CEO, of AU Small Finance Bank, said, "Our performance in the current quarter has remained absolutely on track with deposit growth outpacing advances growth, margins broadly remaining within our guided range and asset quality continuing to be robust." 

The merger with Fincare has received all regulatory approvals in record time, and from April 1, the merged entity has been operational as per the RBI's direction, he said.

The focus now shifts to ensuring a smooth and seamless integration within the next 9-12 months and delivering exceptional banking services and value to the customers, he said.

To ensure seamless transition and minimal customer disruption due to the merger, both the tech-led banks with their strong customer orientation have established a dedicated task force and equipped their call centres to answer all customer queries, he added.

AU Small Finance Bank (AU SFB) last month amalgamated Fincare Small Finance Bank (Fincare SFB), marking the first such consolidation in the sector.In an all-stock merger deal first announced on October 29, 2023, where the shareholders of Fincare SFB received 579 equity shares in AU SFB for every 2,000 equity shares held in Fincare SFB, the merger received final approval from RBI on March 4, 2024, with the effective date of April 1, 2024.With the merger, the bank now has 2,383 physical touchpoints across India.

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