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IDBI Bank recorded an all-time high standalone quarterly net profit of ₹1,133 crore in the fourth quarter ended March 31, 2023, on the back of robust growth in net interest income and other income, huge reversal in loan loss provisions and substantial improvement in asset quality.
The private sector lender’s net profit during the quarter is up 64 per cent as compared with year ago period’s ₹691 crore.
The Bank’s Board of Directors has recommended a dividend of ₹1 per equity share of face value of ₹10 each for the financial year ended March 31, 2023.
Net interest income (difference between interest earned and interest expended) increased by about 35 per cent year-on-year (yoy) to ₹3,280 crore (₹2,420 crore in the year ago period).
Non-interest income, comprising fee-based income, treasury income, recovery in written-off accounts, among others, rose 52 per cent yoy to ₹1,288 crore (₹844 crore).
NIM improves; NPAs dip
Net interest margin (NIM) improved to 5.01 per cent in the quarter against 4.59 per cent in the preceding quarter and 3.97 per cent in the year ago quarter.
The bank received a huge write-back in non-performing assets (NPAs) provisioning amounting to ₹5,469 crore (₹301 crore).
Rakesh Sharma, MD & CEO, said: “We got good recovery (Rs 2,662 crore from two accounts aggregating an exposure of about Rs 3,500 crore that were transferred to the National Asset Reconstruction Company Ltd/ NARCL).
“We are making additional provisioning from any extra recovery we are getting and strengthening our balance sheet. There will be no hidden surprises. As of today, our balance sheet is clean.“
He observed that the need to make additional provisioning is almost over.
“Accounts in the SMA (Special Mention Account) category have come down. Collection efficiency is improving. Next year, we will see further improvement in profit,” Sharma said, adding that the bank expects its credit growth to be one or two per cent above industry average in FY24.
Provision Coverage Ratio (including Technical Write-Offs) stood at 97.94 per cent as on March 31, 2023 (previous year: 97.62 per cent).
GNPAs position improved to 6.38 per cent of gross advances as at March-end 2023 against 13.82 per end as at December-end 2022.
Net NPAs declined to 0.92 per cent of net advances against 1.08 per cent.
Gross advances, deposits up
The Bank’s total deposits were up by 9.59 per cent yoy to ₹2,55,499 crore as at March-end 2023 (₹2,33,134 crore as at March-end 2022).
Gross advances rose 18.70 per cent yoy to stand at ₹1,62,568 crore (₹1,36,955 crore).
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