Despite provisions more than doubling from the year-ago period, state-owned lender IDBI Bank on Thursday reported more than 78% year-on-year rise in its net profit for the June quarter to R241.10 crore, benefiting from a significant improvement in net interest margin and a rise in other income.
The bank’s total income for the quarter stood at R8,219.43 crore, up 4% year-on-year.
Net interest income (NII), is the difference between interest earned and interest paid, stood at R1,706 crore, 14% higher than in the same quarter last year. Net interest margin (NIM) expanded by 25 basis points to 2.08%, against 1.83% last year.
The lender’s provisions for the quarter under review, at R2,432.24 crore, were more than double compared with the quarter ended June 2015. According to chief financial officer RK Bansal, R1,049 crore of the total was made toward standard assets, which include assets that have undergone strategic debt restructuring (SDR) and some of those that the Reserve Bank of India (RBI) had identified in its asset quality review last year.
In terms of the asset quality, IDBI Bank witnessed a rise in non-performing assets (NPA) during the quarter. Gross NPAs as percentage of total loans stood at 11.92%, 528 bps higher compared with the corresponding quarter a year ago and 94 bps higher against the March quarter. Net NPA as a percentage of total loans rose 429 basis points on year and 69 basis points on quarter to 7.47%.