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IDBI Bank reported a net profit of ₹378 crore in the third quarter ended December 31, 2020 against a net loss of ₹5,763 crore in the year ago period.
The bottomline was buoyed by a 89 per cent year-on-year (yoy) decline in provisions for bad loans, ₹ 105 crore write-back in provisions for depreciation in investments and ₹ 323 crore profit the Bank booked by selling a portion of its stake in its life insurance joint venture.
Net interest income (difference between interest earned and interest expended) was up 18 per cent yoy at ₹ 1,810 crore (₹ 1,532 crore in the year ago period).
Other income, including income activities such as commission, fees, earnings from foreign exchange and derivative transactions, profit and loss from sale of investments and recoveries from written off accounts, increased 7 per cent yoy to ₹1,368 crore (₹ 1,279 crore).
Bad loans
Gross non-performing assets (GNPAs) declined to ₹ 3,532 crore during the reporting quarter.
GNPAs declined to 23.52 per cent of gross advances as at December-end 2020 against 25.08 per cent as at September-end 2020.
Net NPAs declined to 1.94 per cent of net advances as at December-end 2020 against 2.67 per cent as at September-end 2020.
With proforma slippages (adjusted for the Supreme Court’s interim order), Gross and Net NPA ratio would have been 24.33 per cent and 2.75 per cent, respectively.
A break-up of the provisions shows that provisions towards NPAs and bad debts written-off declined to ₹ 49 crore (₹ 440 crore) and ₹ 208 crore (₹ 332 crore), respectively.
However, provisions towards standard assets rose to ₹624 crore (₹ 68 crore).
In its notes to accounts, the Bank said it has made additional provision of ₹ 941 crore over and above the IRAC/ income recognition and asset classification norms (includes shifting of ICA/ Inter-Creditor Agreement provision of ₹ 395 crore to IRAC provision) in respect of certain borrower accounts in view of the inherent risk and uncertainty of recovery in these identified accounts.
Global gross advances were down 7 per cent yoy to stand at ₹ 1,59,663 crore. This was mainly due to 18 per cent yoy decline in corporate advances. Retail advances edged up 1 per cent.
Total deposits increased about 3 per cent yoy to ₹ 2,24,399 crore. The share of low-cost of current account, savings account (CASA) in total deposits improved to 48.97 per cent from 47.65 per cent in the year ago quarter.
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