IDBI Bank on Friday reported a net loss of Rs 5,662.76 crore during the January-March quarter, wider than the Rs 3,199.8 crore loss reported in the same period last year, owing to an 80% year-on-year (y-o-y) jump in provisions. The bank also reported its highest ever gross non-performing asset (NPA) ratio at 27.95%, up 323 basis points (bps) sequentially. Provisions for NPAs stood at Rs 10,773.3 crore in the March quarter, 78% higher than what it had reported in Q4FY17. The net NPA ratio rose 67 bps sequentially to 16.69%.
However, the bank was profitable on an operating profit level with pre-provisioning operating profit at Rs 2,361.92 crore, up 126% y-o-y. Much of this was a result of a 277% growth in non-interest income to Rs 2,699.68 crore as the bank earned Rs 4,408 crore from sale of non-core assets.
Net interest income — the difference between interest earned and interest expended — fell 44% y-o-y to Rs 915 crore in Q2 FY18. Net interest margin — a key measure of profitability — dropped 97 bps sequentially to 1.19% in Q4. IDBI Bank reported fresh slippages of Rs 12,823 crore, of which Rs 9,645 crore was as a result of the Reserve Bank of India’s February 12 circular which withdrew all existing restructuring schemes for stressed accounts.
Managing director and CEO MK Jain said that the board had approved a proposal to put out on sale an NPA book worth Rs 21,397 crore, consisting of 30 large-corporate accounts.
“Obviously, there will be a process and in a couple of months, we have to run that process and then we will see how much we are able to work out,” Jain said.
IDBI Bank’s gross advances fell 6% y-o-y to Rs 1.99 lakh crore and its total deposits fell 8% y-o-y to Rs 2.48 lakh crore at the end of the March quarter. Jain said the bank would work to reduce its corporate exposure. “Seeing the quality of loan book on the corporate side, we will continue to de-grow in this financial year as well. On the retail side, we will continue to grow,” he said, adding, “The internal target fixed for increase in the retail book is 23%. If we reach around 20%, that is good enough. The overall loan book may shrink a little bit.”
Shares of IDBI Bank on the BSE ended 3.13% lower than their previous close at Rs 65.10 on Friday.