Higher provisions towards bad loans and loan write-offs weighed on IDBI Bank’s bottomline in the January-February quarter. The public sector bank’s net profit dropped about 6.5 per cent to ₹518 crore in the reporting quarter against ₹554 crore in the year ago period.

For the full financial year, the net profit declined 40 per cent at ₹1,121 crore (₹1,882 crore in the previous financial year).

NPA up In the reporting quarter, the bank’s net interest income (difference between interest earned and interest expended) was up by 9 per cent to ₹1,574 crore while other income was almost flat at ₹1,151 crore.

In the full financial year, loan growth was nearly flat at ₹197,686 crore while deposits nudged up 4 per cent to ₹235,774 crore.

Non-performing assets (NPAs) in gross terms jumped 54 per cent year-on-year to ₹9,960 crore. Net NPAs (after provision) rose 58 per cent to ₹4,902 crore.

Provisions towards NPAs and write-offs were up 65 per cent to ₹1,103 crore. During the year, the bank sold bad loans amounting to ₹1,600 crore to asset reconstruction companies.

According to MS Raghavan, Chairman andManaging Director, although slippages were of the order of ₹5,700 crore in FY14, the bank made handsome recoveries from bad loans aggregating about ₹1,400 crore.

He pointed out that the NPA levels have peaked and asset quality could see improvement after two-three quarters.

Raghavan said the bank had set a credit and deposit growth target of 15 per cent each.

The accent on the loans front was more on the retail side. On capital raising plans, IDBI Bank will raise additional tier-I capital aggregating about ₹2,000 crore from the overseas markets to shore up its common equity tier-I capital to over 8 per cent.