1. IDBI stock falls 9% after Q4 results as NPA and net loss nearly double

IDBI stock falls 9% after Q4 results as NPA and net loss nearly double

Shares of IDBI bank tanked 8.95% to Rs 70.00 on the BSE today after the state-owned bank reported its earnings for the fourth fiscal quarter of 2017.

By: | Published: May 18, 2017 7:03 PM
On account of a steep rise in provisions for loans, the bank’s net loss in the quarter ended 31 March nearly doubled to Rs 3,199.76 crore from Rs. 1,735.81 crore in the corresponding quarter last year.

Shares of IDBI bank tanked 8.95% to Rs 70.00 on the BSE today after the state-owned bank reported its earnings for the fourth fiscal quarter of 2017. On account of a steep rise in provisions for loans, the bank’s net loss in the quarter ended 31 March nearly doubled to Rs 3,199.76 crore from Rs. 1,735.81 crore in the corresponding quarter last year.

Provisions jumped 39.54% to Rs 6,209.58 crore from Rs 4,450.15 crore on-year basis. Gross non-performing assets (NPAs) soared 79.91% on-year basis to Rs 44,752.59 crore from Rs 24,875.07 crore and 26.98% sequentially from Rs 35,245.33 crore.

Gross NPAs stood at 21.25% of total loans at the end of Q4 FY17 compared to 15.16% in Q3 FY17 and 10.98% in Q4 FY16. Net NPAs were at 13.21% compared to 9.61% in Q3 FY17 and 6.78% in Q4 FY16.

Net interest income, the income earned by giving out loans, rose 14.44% on-year to Rs 1,633.29 crore from Rs 1,427.24 crore. Other income fell 21.17% on-year to Rs 1,061.52 crore from Rs1,346.53 crore. Deposits increased 1.06% on-year to Rs 2.69 lakh crore, while advances declined 11.61% to Rs 1.91 lakh crore.

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On 10 May, IDBI Bank’s shares had fallen close to 5.12 percent during intraday trade on NSE as the Reserve Bank of India (RBI) had started a “prompt corrective action” (PCA) for the public sector bank over its high bad loans and negative return on assets. “This action will not have any material impact on the performance of the bank and will continue to improve the internal controls of the bank and improvement in its activities,” the bank had said after the banking regulator took that decision.

Under the PCA, IDBI Bank faces restrictions on distributing dividends and remitting profits. The owner, in this instance the government, may be asked to infuse capital into the bank. That apart, the bank would also be stopped from expanding its branch network. It would need to maintain higher provisions and cap management compensation and directors’ fees. Earlier, the central bank had initiated a PCA against Indian Overseas Bank in 2015 and against United Bank of India in 2014. The RBI had barred United Bank of India from taking an exposure of more than Rs 10 crore per client.

  1. A
    Abhishesh
    Jun 24, 2017 at 10:37 am
    Maximum profit earn satisfication
    Reply

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