The Hindu Business Line : IDBI net profit rises marginally in first quarter

Mumbai, July 18 IDBI Ltd has reported a marginal increase of 1.32 per cent in its Q1 net profit at Rs 153 crore, against Rs 151 crore in the corresponding quarter of the previous year, due to a fall in net interest income.

The results for the quarter ended June 2007 include the operations of United Western Bank (amalgamated with effect from October 3, 2006) and are hence not comparable with the results of the corresponding quarter of the previous year.

Net interest income for the first quarter was down by 35.71 per cent to Rs 63 crore from Rs 98 crore in the corresponding quarter of the year-ago period. “The net interest income dipped mainly due to the increase in the cost of borrowing and a lower yield on advances. The cost of borrowing rose to 7.75 per cent compared with 6.6 per cent in the previous year,” said Mr L.P. Aggarwal, Chief Financial Officer, IDBI Ltd.

The net interest margin of the bank was at 0.28 per cent at the end of the first quarter (0.49 per cent).

Total income was up by 31.47 per cent to Rs 2,193 crore from Rs 1,668 crore. Other income was also higher at Rs 400 crore (Rs 285 crore). Provisions and contingencies were higher at Rs 85.7 crore against Rs 29.18 crore.

Deposits for the quarter grew by 61 per cent to Rs 46,757 crore (Rs 29,096 crore). Low-cost current account and savings account (CASA) deposits accounted for 21 per cent of the total deposits. Advances grew by 14 per cent to Rs 59,772 crore from Rs 52,637 crore. “There has been a general slowdown in advances,” Mr Aggarwal said.

Profit from the treasury portfolio fell saw a decline of 17.04 per cent to Rs 16.11 crore from Rs 19.42 crore. “The treasury segment saw a dip mainly due to lower income from derivatives,” said Mr Aggarwal.

The gross Non Performing Assets of the bank was at 2.06 per cent (2.09 per cent) while the net NPA was at 1.15 per cent (1.02 per cent). The NPAs were mainly from the industrial sector while the NPAs for the housing sector stood at 0.8-0.9 per cent, he said.

Tier-II bonds issue

The capital adequacy ratio of the bank stands at 14.38 per cent. Mr Aggarwal said the bank was not planning to raise capital in the short-term but was looking at issuing Tier-II bonds for augmenting its capital base, when required.

With the appointment of new Chairman, Mr Yogesh Agarwal, the bank is working on revising its strategies, he said, adding that it has plans to do more business in the financial year 2007-08.

The bank has migrated 174 branches of United Western Bank onto ‘Finacle’, from April 16.

More Stories on : Financial Performance | Public Sector Banks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
SBI dividend cheque

Weak rupee not the cure-all

Rupee weakens against dollar

IDBI net profit rises marginally in first quarter

Tata AIG launches ULIP

Grooming the staff to make customer the king

Edelweiss gets SIB mandate to raise funds

Deutsche Bank plans award for Mumbai urban project

Bond prices rise 40-80 paise

BoI debt issue fully subscribed

Call rates end at 0.25-0.45%

Credit card business set for over 30% growth

Nabard plans jt venture micro finance institution