Moody’s downgrades IDBI Bank
IDBI Bank will augment its capital base through sale of non-core assets valued at about ₹5,000 crore.
The bank, which is battling losses and a mountain of non-performing assets (NPAs), plans to focus on boosting its retail portfolio, enhancing the capital base, improving recoveries and containing NPAs. While IDBI Bank has surplus liquidity, it is facing capital deficit. This sale of non-core assets will help the bank augment its capital. But this sale will happen over a period of time depending on market conditions, said Rabinarayan Panda, Field Chief General Manager – Chennai Zone, IDBI Bank.
The bank has already received capital infusion of ₹1,900 crore from the government.
IDBI Bank, which has been put under watch by RBI due to increase in its bad loans, has put in place stringent monitoring measures along with improved recovery mechanisms.
“We have dedicated verticals such as NPA management group (NMG) and credit management group (CMG) and loan accounts are being monitored on a monthly basis now,” said Panda. It is also looking to recover ₹5,000-6,000 crore from bad loans during this year.
“Going forward, retail share of about 50 per cent in the loan book will be maintained. In the corporate segment, we will lend in a calibrated manner,” he said.
Panda said that the bank’s Chennai Zone was maintaining better asset quality with NPA level of about 3 per cent. The bank has 11 zones. .
Overall, with about ₹45,000 crore of NPAs, IDBI Bank’s gross NPA ratio stood at 21.25 per cent and net NPA at 13.21 per cent in 2016-17. Large and very large corporates accounted for 75 per cent of its NPAs.
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