The Hindu Business Line : IDBI net at Rs 201 cr in Q4 on better recovery

The growth in profit was mainly due to significant recovery of non-performing assets and the reduction in cost of funds, said Mr V.P. Shetty, Chairman and Managing Director, IDBI Ltd. The bank's board has announced a dividend of Rs 1.5 per share.

"Performance in the last quarter was satisfactory because of the recovery in the written-off accounts and NPA accounts, which added to our bottom line," Mr Shetty said.

For the fourth quarter, the bank had a total income of Rs 1,944.16 crore. Net interest income was Rs 334.91 crore. Other income was Rs 370.29 crore.

For the full year, total income was Rs 6,661.17 crore. Net interest income (NII) was Rs 379.9 crore. Other income was Rs 1,280.45 crore.

"One area where the bank has to improve its working is the NII," said Mr Shetty.

The proportion of NPAs to total assets fell to 1.01 per cent (1.74 per cent). The bank recovered a total of Rs 1,738 crore, out of which Rs 1,066 crore was from fully written off assets.

Capital Adequacy Ratio was 14.8 per cent (15.5 per cent).

During the fiscal IDBI registered 72 per cent growth in deposits, at Rs 26,000 crore (Rs 15,103 crore), because of the low base, Mr Shetty said.

Advances grew to Rs 88,565 crore (Rs 81,360 crore), because IDBI has huge exposures to large industries, many of which are undergoing restructuring.

"Due to the huge repayment and pre-payment of debt, our loan portfolio did not improve much," Mr Shetty said.

The bank reduced its cost of funds to 6.83 per cent (7.35 per cent) by replacing the high cost borrowings of erstwhile IDBI amounting to Rs 12,380 crore and refinancing it with low-cost deposits.

Low-cost current account and savings account deposits form 30 per cent of the bank's total assets.

IDBI's exposure to commercial real estate is about Rs 1,200 crore and will not be affected much by the higher risk weight norms as prescribed in the annual monetary policy, Mr Shetty said. "Our CAR is sufficient and a slightly higher risk weight will not affect us much."

To recruit more personnel

The bank opened 171 branches in 2005-06 against its target of 200. It is planning to recruit more personnel for its branch expansion programme in 2006-07, according to Mr Shetty. Under the Stressed Asset Stabilisation Fund, IDBI has resolved 288 cases and recovered Rs 1,010 crore as on March 06.

It has applied for licences in Singapore and Bahrain, as part of its overseas expansion.