State-run IDBI Bank today said its net losses widened to Rs 5,663 crore in the quarter ending March 2018 due to higher provisioning for bad loans.
The bank had reported a net loss of Rs 3,200 crore in the year-ago period. For the full year, the bank reported a net loss of Rs 8,238 crore compared with Rs 5,158 crore in FY17.
“I can announce very well today, which I was not able to announce earlier, that most of the legacy issues on asset quality have been recognised and there is an increase in provision coverage ratio,” the bank’s managing director and CEO, M K Jain told reporters here today.
Net Interest Margin (NIM) declined to 1.19 per cent in the quarter from 1.75 per cent in the year ago period. IDBI Bank’s gross non-performing assets (NPA) soared to 27.95 per cent of its loans compared to 21.25 per cent while net NPAs stood at 16.69 per cent compared to 13.21 percent.
In absolute terms, gross bad loans stood at Rs 55,588 crore, up from Rs 44,753 crore in March 31, 2017.
Total provisions stood at Rs 10,544.34 crore. The provisioning for NPAs were raised to Rs 10,773.30 crore in the fourth quarter of the fiscal ended March 2018, up from Rs 6,054.39 crore parked aside in the year ago period.
The city-based lender has received board approval to sell bad loans worth Rs 21,397 crore.
“Today, board has approved to put out on sale NPA book of Rs 21,397 crore, consisting of 30 accounts, which is basically large corporate. Obviously, there will be a process and in a couple of months, and then we will see how much we are able to work out,” Jain added.
Fresh slippages in the quarter were Rs 12,823 crore of which, Rs 9,647 crore came on account of the Reserve Bank’s February 12 circular on resolution of stressed assets. Recovery and upgradation stood at Rs 2,383 crore during the reporting quarter.
Jain said in the current financial year, the bank will de-grow its corporate loan book, while it will continue to grow on the retail side.
“The internal target fixed for increase in the retail book is 23 per cent in this financial year. If we reach around 20 per cent, that is good enough. The overall loan book may shrink a little bit,” Jain added.
It has received in-principle approval from it’s Board for buyback of foreign currency medium-term notes bond (MTN bonds) upto USD 1,490 million in tranches during the current financial year.
It also got an in-principle approval to divest partial stake in IDBI Asset Management to a strategic investor, subject to compliance and regulatory nod.
Jain also said that as a part of its turnaround strategy it plans to trim down the operations in Dubai. The bank’s shares ended at Rs 65.10 a piece, down 3.13 per cent on BSE, which closed 0.76 percent up.