IDBI Bank’s net profit rose 60% year-on-year in the December quarter due to a strong growth in loans and lower provisions.
The bank posted a bottomline of Rs 927 crore, up 12% on quarter. Gross advances rose 18% Y-o-Y to Rs 1.47 trillion as on December 31, with retail making up 52% of the book, according to an investor presentation by the bank.
The composition of retail and wholesale advances stood at 33:67 on December 31. Corporate advances comprised 37% of the bank’s overall loan book a year ago.
The fall in the bank’s corporate loan book has been triggered by the transfer of bad loans to the National Asset Reconstruction Company, Deputy Managing Director Samuel Joseph said on the sidelines of the result announcement.
On the liability side, deposits rose 5% Y-o-Y to Rs 2.3 trillion. Specifically, bulk deposits witnessed the highest growth, rising 45% Y-o-Y . Current deposits also grew 6% y-o-y, according to the presentation. On the other hand, retail deposits fell 0.6% Y-o-Y.
The ratio of current account savings account deposits comprise 54.44% overall deposits as on December 31. It was at 54.69% a year ago.
The bank’s net interest income rose 23% Y-o-Y to Rs 2,925 crore in October-December. Net interest margin rose to 4.59% in October-December from 3.88% a year ago.
Gross non-performing asset ratio improved to 13.82% as on December 31 from 21.68% a year ago. Gross non-performing asset ratio stood at 16.51% on September 30.
Net non-performing asset ratio improved to 1.07% as on December 31 from 1.81% a year ago. Net non-performing asset ratio stood at 1.15% as on September 30. Of the total gross non-performing assets of Rs 23,535 crore, assets worth Rs 21,166 crore were fully provided for, the bank said in the investor presentation.
Provision coverage ratio improved to 98% from 97.10 %.
Earlier this month, the bank transferred a large corporate account worth Rs 3,750 crore to the National Asset Reconstruction Company, its maiden bad loan transfer.
This will help the bank reduce its gross non-performing asset ratio by 2.2%, said Rakesh Sharma, managing director and chief executive officer.
The bank intends to transfer loans worth Rs 10,000-11,000 crore to the asset reconstruction company. This will reduce the gross non-performing asset ratio by nearly 4%.