IDBI Bank’s first quarter standalone net profit rose 40 per cent year-on-year (y-o-y) to ₹1,719 crore despite decline in net interest income (NII) and other income. The bottomline was supported by write-back in provisions on non-performing assets (NPA) and investments.
The private sector lender had reported a net profit of ₹1,224 crore in the year ago period. LIC and the government are major stakeholders in the Bank, with 49.24 per cent and 45.48 per cent stake, respectively.
Net interest income declined 19 per cent y-o-y to ₹3,233 crore (₹3,998 crore).
Other incomes comprising commission, exchange and brokerage, profit/loss on sale of investments, revaluation of investments and on forex, recovery from written-off cases and miscellaneous income was down 6 per cent y-o-y at ₹805 crore (₹852 crore).
Operating profit was down 31 per cent at ₹2,076 crore (₹3,019 crore).
The bottomline was supported by write-back in provisions on NPA at ₹1,439 (against ₹581 crore provision in the year-ago period) and sharply higher write-back in provision on investments at ₹358 crore (₹54 crore).
Provision for standard assets jumped to ₹839 crore (₹489 crore).
Net interest margin declined to 4.18 per cent against 5.8 per cent in the year-ago period.
The position of GNPAs improved to 3.87 per cent of gross advances as at June-end 2024 against 4.53 per cent at March-end 2024. Net NPAs improved to 0.23 per cent of net advances (against 0.34 per cent).
Slippage ratio declined to 0.81 per cent against 1.16 per cent in the year-ago period. Credit cost was negative excluding accelerated provision of ₹770 crore.
The Bank expects GNPA to be gradually brought down, with recovery target of ₹3,000 crore. Net NPA level to be maintained below 0.50 per cent.
Gross advances increased 16 per cent y-o-y to ₹2,01,368 crore as at June-end 2024.
Within gross advances, structured retail advances (housing loan, loan against property, auto loan, education loan, personal loan, and others) was up 12 per cent y-o-y; non-structured retail advances (gold loan, agriculture, MSME, bulk business/centralised business and other retail) rose 32 per cent y-o-y and corporate advances increased 9 per cent y-o-y.
Total deposits rose 13 per cent y-o-y to stand at ₹2,77,548 crore as of June 2024. Low-cost CASA (current account, savings account) deposits improved to 48.57 per cent of total deposits compared with 52.61 per cent in the year-ago quarter.
The Bank said it will explore avenues to achieve business (deposits plus advances) growth of 12-13 per cent and maintain corporate to retail ratio at 35:65. It also plans to expand its network by 135 branches, including 23 BC (business correspondent) outlets in FY 25.
IDBI Bank is eyeing lateral growth in portfolio through co-lending in the geographical locations where it does not have reach through its own network.
Further, it is also looking at tie-up with fintechs to scale up sourcing of business under personal loan and education loan categories.