IDBI Bank posts Rs 144 crore profit in Q1

The bank has seen reduction in the number of customers opting for moratorium.

Life Insurance Corporation (LIC)-owned IDBI Bank on Tuesday reported a net profit of Rs 144 crore in the June quarter as net interest income growth was healthy, provisions were lower and asset quality improved. The lender had earlier reported a net loss of Rs 3,801 crore in the corresponding quarter last year. Total provisions declined 86% year-on-year (y-o-y) to Rs 888 crore in the June quarter. The lender has provided Rs 189 crore on account of Covid-19. The bank has also made a recovery of Rs 528 crore in the current quarter and aims to recover Rs 1,000 crore every quarter this financial year.

The bank has seen reduction in the number of customers opting for moratorium. Total 56% of the loan book was under moratorium as on June 30, compared to 66% in the earlier. Rakesh Sharma, managing director & chief executive officer, IDBI Bank said, “61% of large and mid-corporates and 55% of retail book is under moratorium.” The moratorium figures also include customers who has made part payment, he added.

Rakesh Sharma also said that 90% of retail borrowers who availed moratorium had a Credit Information Bureau of India (CIBIL) score of 700 and above.

The lender’s net interest income (NII) grew 22% year-on-year (y-o-y) to Rs 1,773 crore. Similarly, net interest margin (NIM) improved to 2.81% in the June quarter, showing y-o-y growth of 68 basis points (bps). The share of current account savings account (CASA) in total deposits improved to 47.55%, showing an improvement of 440 bps y-o-y.

The asset quality of the bank showed improvement in the June quarter. The gross non-performing assets (NPAs) improved 72 bps to 26.81%, compared to 27.53% in the previous quarter. Similarly, net NPAs came down 64 bps to 3.55% from 4.19% in the March quarter. First time NPAs came down to Rs 69 crore, compared to Rs 3,486 crore in the same quarter last year.

The provision coverage ratio (PCR) improved to from 94.71% as on June 30, 2020. The bank claims to have declared highest PCR in the industry. The capital adequacy ratio of the bank stood at 13.37% in the June quarter.

The bank will write to Reserve Bank of India (RBI) for coming out of prompt corrective action (PCA) framework. “We will write to RBI today or tomorrow,” Sharma said. RBI had kept the bank in PCA framework, under which the central bank puts partial restrictions on loan disbursements. The regulator had taken action after a massive asset quality deterioration, losses in the books and lower capital levels.