In 8th straight loss, IDBI Bank posts Rs 3,602-crore Q2 loss as provisions surge

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Mumbai | Published: November 15, 2018 1:19:49 AM

IDBI Bank on Wednesday reported a loss of Rs 3,602.49 crore for the quarter ended September, its eighth consecutive quarterly loss.

Total provisions at the bank rose 101.7% from the year-ago period to Rs 6,579 crore.

IDBI Bank on Wednesday reported a loss of Rs 3,602.49 crore for the quarter ended September, its eighth consecutive quarterly loss. Losses were due to a 92.9% y-o-y jump in provisioning for non-performing assets to Rs 5,481.64 crore. Total provisions at the bank rose 101.7% from the year-ago period to Rs 6,579 crore.

The lender witnessed a further deterioration in its asset quality, with gross non-performing assets (NPAs) rising 100 bps on a sequential basis to 31.8% of the loan book at the end of September. However, net NPAs fell 146 bps sequentially to 17.3%.
The bank is currently undergoing an ownership transition with Life Insurance Corporation buying a stake. Earlier this year, the government gave its nod for reducing its shareholding to below 50%, and acquisition of a controlling stake by LIC as the promoter.
Meanwhile, fresh slippages during the quarter were at Rs 3,489 crore, which as per the bank, were the lowest during the last six quarters.

Recovery from written-off accounts improved to Rs 148 crore for the quarter ended September, against Rs 34 crore for the same period last year.
The bank aims to focus on NPA resolution, recovery from written-off cases and improve the provision coverage, according to a filing with the stock exchanges.
According to an post-earnings analyst presentation by the bank, it has written off bad debts worth `115 crore during the quarter. The provision coverage ratio, meanwhile, saw an improvement to 68.72% for the latest quarter, against 54.56% in the same quarter last year.

IDBI Bank saw a 21.5% y-o-y decline in net interest income to Rs 1,300.86 crore.
NII is the difference between interest earned and interest paid by a bank. The lender’s net interest margin (NIM) fell 37 basis points from the end of June to 1.8%.

Total advances fell 7% y-o-y to Rs 1.92 lakh crore by the end of September, led by the corporate credit that fell 17% y-o-y to Rs 1.04 lakh crore and constituted 54% of the overall loan book.
Savings deposits grew 11% to Rs 57,035 crore for Q2FY19, compared with Rs 51,488 crore for Q2FY18. Average current account deposits fell 3% to `33,037 crore for the quarter, against Rs 33,888 crore in the year-ago period.
The current account savings account ratio as on September 30, 2018 stood at 38.13%, up from 35.34% as on September 30, 2017.

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