IDBI Bank Ltd asset quality deteriorated as gross non-performing assets (NPAs) increased 17% q-o-q to Rs 9,370 crore. As a ratio, gross NPAs increased to 4.98%, up 64 bps from the preceding quarter, while net NPAs moved up by 66 bps from the June quarter to 2.82%.
As a result, provisions for bad loans remained elevated at Rs 878 crore in the second quarter compared to Rs 829 crore in the previous quarter. Provisions were nearly double the Rs 494 crore set aside in the same quarter last year.
The IDBI Bank stock fell to Rs 65.90 on Wednesday on the BSE, down 3.94% from the previous close.
A steep drop in treasury income also played a part in the bank's weak earning performance during the quarter. Segmental results showed the treasury division reported a loss of Rs 16 crore during the quarter compared to a profit of R49 crore in the previous quarter.
The bank also declared a market-to-market hit to its bond portfolio of Rs 186.35 crore due to the spike in bond yields during the quarter. Of this, the lender recognised Rs 93.18 crore in the current quarter. Operationally, the bank's performance remained steady. Net interest margins expanded 5 bps q-o-q to 2.17%, despite a tough funding environment.
Advances at the bank rose 10.35% to R1,83,586 crore against Rs 1,66,370 crore as at end of September 2012. Deposits increased to Rs 2,02,559 crore at end of September 2013 from Rs 1,80,087 crore at end of Q2 in 2012, reflecting a growth of 12.48%.