IDBI Bank’s Q1 profit rises 62% to ₹1,224 crore
IDBI Bank It posted an all-time high standalone quarterly net profit of Rs.1,224 crore in Q1 FY24 on the back of strong growth in net interest income even as asset quality improved further due to accelerated savings.
Net profit in the aforementioned quarter jumped by 62 per cent year-on-year compared to the same period last year to ₹ 756 crore.
Net interest income increased by 61 per cent year-on-year to Rs. 3,998 crore (Rs. 248 crore in the same period last year).
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other low income
Other income, which includes fees earned from rendering services to clients, commission income from non-fund banking activities, gain/loss (including revaluation) on sale of investment, and recoveries from advances written off, decreased by 25% year-on-year to Rs.852 crore (Rs.1,140 crore).
In this regard, the bank officials emphasized that in the last year quarter, the bank received one-off inflows totaling Rs.215 crore. But there were no inflows once in the said quarter.
During the quarter, the bank made an additional provision of Rs. 770 crore on non-performing assets (NPAs) at rates above those set by the RBI, based on management’s assessment of the degree of impairment in various categories of advances.
This comes even as assets shifted to NPA for the first time and increase in current NPA during the quarter was at ₹581 crores and ₹51 crores, respectively.
Rakesh Sharma, managing director and chief executive officer, said his bank channeled a portion of the refunds collected around Rs 1,600 crore during the reporting quarter on the aforementioned expedited provisioning.
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Nim rushes
Net interest margin (NIM) jumped to 5.80 percent (taking into account recovery proceeds) from 4.02 percent in the year-ago quarter. The NIM core index rose to 3.94 percent from 3.26 percent.
Total non-performing assets to total advances improved to 5.05 percent at the end of June 2023 compared to 6.38 percent at the end of March 2023.
The net NPA to net advances ratio also improved to 0.44 percent at the end of June 2023 compared to 0.92 percent at the end of March 2023.
Net advances at Rs.1,65,403 crore at end of June 2023 grew by 20 per cent year on year as against Rs.1,38,223 crore as of 30 June 2022. Deposits increased by about 9 per cent annually to Rs.2,44,971 crore (Rs.2,25,269 crore).
Jayakumar S Pillai, Deputy General Manager, said the bank has identified around 10 stress accounts accumulating around Rs 5,000 crore to transfer to National Asset Reconstruction Company Ltd as part of the balance sheet clean-up process.