IDBI Bank Q3 net profit jumps 57%

IDBI Bank on Saturday reported a 57 per cent growth in net profit to Rs 1,458 crore in the third quarter ended December 31, on lower provisioning and better interest income.

The LIC-controlled bank had a net profit of Rs 927 crore in the October-December quarter of 2022.

The bank's interest income improved during the third quarter of the current fiscal to Rs 6,541 crore, as against Rs 5,231 crore in the same period last fiscal.

The gross non-performing asset (NPA) ratio improved to 4.69 per cent as on December 31, 2023, as against 13.82 per cent as on December 31, 2022

Similarly, the net NPA also declined to 0.34 per cent, as compared to 1.08 per cent at the end of December 2022.

As a result provisioning and contingencies came down to Rs 320 crore in the December quarter, from Rs 784 crore in the same quarter of the last fiscal.

Provision Coverage Ratio (including Technical Write-Offs) stood at 99.17 per cent as on December 31, 2023.

During the quarter Capital Adequacy Ratio of the bank improved to 20.32 per cent, as compared to 20.14 per cent at the end of December 2022.

The bank has not raised capital during the December quarter and the earlier funds have been fully utilised, it said.

The government, which owns over 45 per cent stake in IDBI Bank, plans to sell its stake in the bank and the process could gather pace next financial year.

Meanwhile, life insurance behemoth LIC, which has a 49.24 per cent shareholding, is keen to hold strategic stake in the bank so that it can enjoy the benefit of bancassurance channel.

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IDBI Bank Q1 Results: Net profit up 62%, asset quality improves

LIC-promoted IDBI Bank on Monday reported a 62 per cent rise in net profit to Rs 1,224 crore in the June quarter due to a decline in bad loans. The bank had posted a net profit of Rs 756 crore in the year-ago period. Total income in the first quarter of the current fiscal rose to Rs 7,712 crore, from Rs 5,774 crore in the same period a year ago, IDBI Bank said in a regulatory filing.

Interest earned by the bank improved to Rs 6,860 crore over Rs 4,634 crore in June 2022. Net interest income (NII) increased by 61 per cent to Rs 3,998 crore from Rs 2,488 crore in the same quarter a year ago.

Net Interest Margin (NIM) improved by 178 bps to 5.80 per cent for Q1-2024 as compared to 4.02 per cent for Q1-2023, it said. The bank’s asset quality showed improvement as gross non-performing assets (NPAs) declined to 5.05 per cent of gross advances at the end of the June quarter, from 19.90 per cent a year ago.

Similarly, net NPAs or bad loans declined to 0.44 per cent, as against 1.26 per cent in the year-ago period. Provision coverage ratio also improved to 98.99 per cent as against 97.78 per cent as on June 30, 2022, it said.

Capital Adequacy Ratio of the bank increased to 20.33 per cent, as compared to 19.57 per cent at the end of June 2022.

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IDBI Bank Q4 results: Net profit rises 64%

Private sector

lender IDBI Bank’s net profit for the March 2023 quarter rose by 64 per cent year-on-year (Y-o-Y) to Rs 1,133 crore on the back of improved net interest margins. The lender recorded an all-time high of net profit of Rs 3,645 crore, which is 49 per cent more than Rs 2,439 crore for FY22. In its regulatory filing, the bank said the profit sequentially increased by 22.2 per cent from Rs 927 crore in December 2022 (Q3FY23). For FY23, the net profit.

Besides, its Net interest income (NII) increased by 35 per cent to Rs 3,280 crore in Q4FY23, as against Rs 2,420 crore in the same quarter last year. Sequentially, NII is up by 12 per cent from Rs 2,925 crore registered in December quarter of FY23.

Net interest margins improved to 5.01 per cent for Q4 FY23 as compared to 3.97 per cent for Q4FY22, and sequentially, 4.59 per cent in Q3 FY23.

IDBI Bank’s board of directors declared a dividend of 10 per cent (Rs one) per share of Rs 10 each for the financial year ended March 2023 (FY23), subject to shareholder’s approval, the bank said in a filing with BSE. It has proposed a dividend after eight years, the bank officials said.  

The bank reported that its provisions steeply rose up to Rs 1,292 crore in the March quarter as compared to Rs 823 crore in Q4 FY22 and Rs 1,124 crore in the December quarter of FY23. Provision Coverage ratio expanded to 97.94 per cent in the quarter under review.

In term of bad loans, the bank said its gross NPA dipped drastically to 6.38 per cent in Q4 FY23 compared to 20.16 per cent in Q4 FY22. Net NPA was below the 1 per cent, to 0.92 per cent in the March 2023 quarter as compared to 1.36 per cent in Q4 of FY22.

Earlier this month it was reported that the Reserve Bank of India (RBI) has been looking into at least five potential bidders keen on picking up a majority stake in IDBI Bank Ltd. Kotak Mahindra Bank, Prem Watsa-backed CSB Bank and Emirates NBD are some of the names that have submitted expressions of interest, two sources said.

The divestment of IDBI Bank is the first major divestment exercise across state-owned banks as part of Centre’s broader privatisation plan and could fetch it $3.66 billion at the current market valuation. The Union government and LIC together own 94.71 per cent stake in the bank. The government owns 45.48 per cent of IDBI Bank and is planning to divest a 30.48 per cent stake in the bank.

Whereas insurance major Life Insurance Corp of India (LIC) plans to see a 30.24 per cent of its stake from its holding of 49.24 per cent in the bank.

Expressions of interest - the first step in the stake sale process - closed in January, the report said.

The potential bidders have since begun due diligence on the bank, sources said, who added financial bids were likely to be placed later this year.

The RBI is also carrying out a "fit and proper evaluation", including extensive background and financial checks on the potential buyers, a crucial step before an investor is allowed to pick up a stake in a local bank.

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IDBI Bank Q1 Results: Profit rises 25%

 IDBI Bank on Thursday reported a 25 per cent jump in standalone net profit at Rs 756 crore in the June quarter, helped by a decline in bad loans. The LIC-controlled private sector bank had posted a net profit of Rs 603.30 crore in April-June 2021-22.

However, the total income declined to Rs 5,780.99 crore in the first quarter of the current fiscal from Rs 6,554.95 crore in the year-ago period.

The bank's asset quality improved with gross Non-Performing Assets (NPAs) falling to 19.90 per cent of the gross advances as of June 2022 from 22.71 per cent as of June 2021, according to a regulatory filing.

Net NPAs too came down to 1.25 per cent from 1.67 per cent at the end of the first quarter of the last fiscal.

The bank's provisions for bad loans and contingencies stood at Rs 1,751.80 crore in the June quarter, up substantially from Rs 888.05 crore in the year-ago period.

As a result, provisions (other than tax) and contingencies declined significantly to Rs 959.23 crore from Rs 1,844.07 crore a year ago.

Provision Coverage Ratio (including Technical Write-Offs) improved to 97.79 per cent as on June 30, 2022 as against 94.42 per cent last year.

However, the Net Interest Income (NII) declined to Rs 2,488 crore during the period under review. The same stood at Rs 2,506 crore in the preceding year.

During the same time, Net Interest Margin (NIM) declined to 4.02 per cent as compared to 4.06 per cent in the previous fiscal.

Capital adequacy ratio improved to 19.57 per cent in the June quarter, which was 16.23 per cent in the corresponding quarter last year.

During the quarter, the bank has sold entire stake 19.18 per cent in Asset Reconstruction Company (India) Ltd to Avenue India Resurgence Pvt Ltd for sale consideration of Rs 2,361.48 crore, resulting in profit of Rs 2,140.66 crore.

At the same time, the bank has entered into Share Purchase Agreement with Ageas Insurance International NV (Ageas) on May 19, 2022 to sell IDBI's entire remaining stake (25 per cent) in Ageas Federal Life Insurance Company Limited (AFLI) pursuant to exercise of call option by Ageas.

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IDBI Bank Privatisation: Govt Likely to Invite EoIs in July-End After Discussions with RBI

The central government has been mulling the privatisation of IDBI Bank for quite some time now, and has kept the lender in its list of companies for divestment. The Department of Investment and Public Asset Management (DIPAM) is currently holding roadshows in the US for the sale of the bank, which is set to be another important landmark in reaching India’s divestment targets. The actual quantum of government stake sale at the IDBI Bank will be known once the roadshow is over, the Centre had said earlier in April.

Currently, the government is in the process of holding roadshows in the US, an official was quoted by PTI as saying, on June 10, Friday. After a few more such investor meets, it will finalise the contours of the IDBI Bank stake sale, the official added.

“We may need one more round of discussion with RBI on IDBI strategic sale. The expression of interest (EoI) may be invited by July-end," the official said. It was earlier confirmed by sources that the government may invite EoIs in May for selling its stake in IDBI Bank and expects to complete the disinvestment process in the current financial year 2022-23.

The official said while the quantum of stake dilution of both the government and LIC is yet to be decided, the management control in IDBI Bank will be transferred in the strategic sale.

DIPAM secretary Tuhin Kanta Pandey had in April also said that the EoIs will be invited once the meetings with investors were over. “The quantum of exit will be known post roadshow and then the structure of Expression of Interest will be finalised. One thing is very sure that management control will be passed on. Currently, it is with LIC. But, management control at what level of equity will have to be decided when we have decided the structure of EoI,” Pandey had said in Delhi during an event on LIC IPO roadshow.

The government holds 45.48 per cent stake in the bank, while LIC owns 49.24 per cent. Necessary amendments to the IDBI Bank Act have already been made through the Finance Act 2021, and transaction advisors have been appointed.

The Cabinet Committee on Economic Affairs had given in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank in May last year. “CCEA has given an in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank Ltd”, a government had statement said.

In January 2019, IDBI Bank became a subsidiary of LIC, following the acquisition of additional 8,27,590,885 equity shares. In December 2020, IDBI Bank was classified as an associate company due to the reduction of LIC shareholding to 49.24 per cent. The IDBI Bank privatisation efforts come during a time when the government has put off similar plans for Bharat Petroleum.

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IDBI Bank Q4 net profit rises 35%

IDBI Bank on Monday posted 35 per cent rise in net profit at Rs 691 crore for the quarter ended March 2022 due to fall in bad loan provisions as NPA came down.The bank had posted a net profit of Rs 512 crore for the same quarter of 2020-21.

Total income during January-March period of 2021-22, however, was lower at Rs 5,444.08 crore from Rs 6,894.86 crore in the year-ago period, IDBI Bank said in a regulatory filing.

The bank's core interest income during the period was down at Rs 4,599.67 crore as against Rs 5,781.48 crore a year ago. Income from other sources was also lower at Rs 844 crore from Rs 1,113 crore.

The proportion of gross bad loans or non-performing assets (NPAs) of the bank fell to 19.14 per cent of gross loans at March-end 2022 as against 22.37 per cent by March 2021.

In value terms, gross NPAs stood at Rs 34,115 crore as against Rs 36,212 crore.

Likewise, net NPAs came down to 1.27 per cent (Rs 1,856 crore) from 1.97 per cent (Rs 2,519 crore).

Thus, provisions for bad loans and contingencies for the quarter were trimmed to Rs 669.23 crore as against Rs 2,393.36 crore parked aside by the bank for March quarter of 2020-21.

Of this, provisions for bad loans stood at Rs 300.61 crore, as against Rs 1,119.65 crore

For the full year, the bank's net profit grew 79 per cent to Rs 2,439 crore from Rs 1,359 crore in 2020-21.

Total income during the year was down at Rs 22,985 crore from Rs 24,497 crore mainly on account of fall in interest income as well as those from other sources.

The bank said its gross advances stood at Rs 1,78,207 crore by March 31, 2022, registering a yearly growth of 10.07 per cent.

IDBI Bank said during March quarter of previous fiscal year, it had received interest of Rs 1,313 crore on income tax refund.

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IDBI Bank Q3 net profit surges 53%

IDBI Bank reported a 53% rise in net profit mainly due to a decrease in cost of funds, which helped boost both net interest income and net interest margin (NIM).Net profit rose to Rs.578 crore in the quarter, from Rs.378 crore a year ago.

Net interest income (NII), or the difference between the interest earned on loans and that paid on deposits, increased 31% to Rs.2,383 crore mainly as the bank's cost of funds fell 60 basis points year on year to 3.79% in December 2021.

The fall in its cost of funds also helped IDBI Bank improve its NIM, which is the difference between the yield a bank earns on loans and that it pays for deposits. NIM improved 101 bps to 3.88% from 2.87% a year ago.

The rise in NII and NIM masked a tepid loan growth of 5% led by a 13% year on year growth in mid corporate loans and a 5% growth in retail, agriculture and micro enterprises. Total deposits fell 1% as the bank moved away from high-cost bulk deposits.

CEO Rakesh Sharma acknowledged that the bank's loan growth has been slow but said he is confident of growing above 10% led by retail and mid corporate loans in the next fiscal. A drop in provisions also contributed to the bank's net profit. Provisions dropped 11% to ₹1,189 crore from ₹1,332 crore a year ago as the bank continued to improve recoveries.

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IDBI Bank Q2 results: Net profit up 75%

IDBI Bank reported a 75 per cent year-on-year (yoy) increase in second quarter standalone net profit at ₹567crore, supported by a huge write-back in provisions for non-performing assets (NPAs) and lower tax expense.

The Bank had posted a net profit of ₹324 crore in the year ago quarter.Net interest income increased 9 per cent yoy in the reporting quarter to ₹1,854 crore (₹1,694 crore in the year ago quarter).

Other income, including income from non-fund based banking activities such as commission, fees, earnings from foreign exchange and derivative transactions, and profit and loss from sale of investment, declined about 4 per cent yoy at ₹846 crore (₹881 crore).

The received a write-back of ₹1,426 crore in provisions for NPAs against ₹165 crore in the year ago quarter. Tax expense burden was lower at ₹215 crore (₹347 crore).

As at September-end 2021, gross advances barely nudged up to ₹1,64,506 crore (₹1,63,841 crore as at September-end 2020).

Rakesh Sharma, MD & CEO, said the Bank has built up a sanctions pipeline in the mid and large corporate segments and disbursals are expected to pick up from year-end onwards.

The Bank expects to grow its corporate loan book by about ₹6,000 crore in the current financial year.

Samuel Joseph, Deputy Managing Director, said the Bank has an exposure of about ₹400 crore to the SREI group, which is undergoing corporate insolvency resolution process, and has made 100 per cent provision towards this exposure. IDBI Bank recovered ₹196 crore from DHFL.

P Sitaram, CFO, emphasised that the Bank will grow the corporate loan book even as the emphasis will continue to be on structured retail loans.

Gross NPAs declined about ₹1,186 crore during the reporting quarter to ₹34,408 crore.

Gross NPAs as a percentage of gross advances declined to 20.92 per cent against 21.48 per cent in the preceding quarter. Net NPAs, however, nudged up to 1.62 per cent of net advances against 1.56 per cent.

Fresh slippages rose by ₹1,438 crore (₹1,332 crore in the first quarter). The Bank settled NPAs aggregating ₹1,436 crore (₹587 crore).

ends.

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