IDBI moves to increase asset size beyond Rs 90,000 crore by FY06

Mumbai, Aug 1 | Updated: Aug 2 2005, 05:30am hrs
IDBI Ltd has firmed up plans to increase its asset size beyond the Rs-90,000 crore mark by the end of the current fiscal.

At present, we have accorded certain huge sanctions. These sanctions should make it much easier for us to achieve the target, said IDBI Chairman V P Shetty. IDBI reported a net profit of Rs 109 crore for the quarter ended June 30, 2005.

In line with intensifying its corporate lending activity, IDBI now plans to enhance its exposure to film financing. The bank plans to add another Rs 150-200 crore to its current portfolio of credit to the glamour world of Bollywood.

The bank also plans to expand its exposure in existing well-run companies. We are cautious in taking any green-field projects for now, said Mr Shetty.

Despite the robust credit off-take in the system, the bank plans to increase its total deposits to Rs 16,800 crore by the end of this fiscal even as it increased its deposits to Rs 16,851 crore. Earlier, IDBIs retail portfolio was home-heavy, but now the bank has earmarked an additional growth of Rs 1,000-2,000 crore in its personal loan segment. Furthermore, the bank anticipates that its total business growth will surpass the Rs-1,50,000 crore mark by March-end 2006, aided by a 200-branch network.

In the reporting quarter, the banks total income aggregated Rs 1600.68 crore while the total expenditure of IDBI was Rs 1442.28 crore for the quarter under review. The interest income of the bank stood at Rs 1,331.85 crore in the April-June quarter of 2005 while its other income was Rs 268.83 crore. The financial result of the reporting quarter is not comparable with that of the corresponding quarter last year as the amalgamation of the erstwhile IDBI Bank with IDBI was effective from October 1, 2004.

The net NPAs of the bank stood at 1.5%, while its capital adequacy ratio stood at 16.2% as of June-end 2005 as against 15.5% as of March-end 2005.

The cost of funds moved down to 7.14% during April-June 2004 on the back of banks emphasis on reducing interest expenses and access to low-cost deposits follwing the merger of IDBI Bank with IDBI Limited.