IDBI Bank profit jumps 46% in Q2 | The Financial Express

IDBI Bank profit jumps 46% in Q2

The pre-provisioning operating profit (PPOP) rose 64% to Rs 2,208 crore in Q2FY23, led by a 11% increase in non-interest income aided by sale of stake in its insurance joint venture Ageas Federal Life Insurance.

IDBI Bank profit jumps 46% in Q2
The net NPA ratio improved to 1.15%, lower by 56 bps YoY and 10 bps QoQ.

IDBI Bank on Friday reported a 46% year-on-year growth in its net profit to `828 crore for the three months ended September 30 despite an increase in its provisions. This is the highest-ever quarterly net profit for the bank, the lender said in a statement. Provisions rose 77% YoY to Rs 1,380 crore in Q2FY23

The pre-provisioning operating profit (PPOP) rose 64% to Rs 2,208 crore in Q2FY23, led by a 11% increase in non-interest income aided by sale of stake in its insurance joint venture Ageas Federal Life Insurance. The bank’s other income stood at Rs 1,087 crore.

Net interest margin (NIM) expanded by 135 basis points (bps) to 4.37% as of September 30. The bank over-performed on its NIM target of 3.25%, Rakesh Sharma, managing director & CEO, said.

The net interest income (NII) improved 48% to Rs 2,738 crore, helped by a  robust loan growth of 17% . Net advances stood at Rs 1.5 trillion as of September 30, of which 35% was corporate loans and the rest was retail.

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Of the total book, around 50% of loans are linked to repo rate lending rates (RLLR). While the lender has exceeded its credit growth target of 10-12%, the board is likely to raise the guidance in Q3FY23 meeting, Sharma said.

Deposits improved by 3% to `2.23 trillion, with the current account savings account (CASA) ratio at 56.19%, higher than 54.63% a year ago. Bulk deposits were at 5.53% of total deposits, compared with 6.56% a year ago. The bank saw a 16-bps reduction in cost of deposit to 3.44% due to higher CASA ratio.

Gross non-performing asset (NPA) ratio stood at 16.51% as on September 30, lower by 534 bps YoY and 339 bps sequentially. The net NPA ratio improved to 1.15%, lower by 56 bps YoY and 10 bps QoQ. The provision coverage ratio improved to 97.86% as on September 30 from 97.27% a year ago. The bank saw reduction in fresh slippages to Rs 524 crore in Q2FY23, compared to Rs 1,438 crore a year ago, with bulk of the slippages coming from retail.

The lender’s capital adequacy ratio improved to 19.48% as on September 30, against 16.59% a year ago.

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First published on: 22-10-2022 at 01:15 IST