Weighed down by higher provisions for bad loans, IDBI Bank reported a 38 per cent drop in net profit in the second quarter ended September. The public sector bank’s net profit fell to ₹118 crore from ₹192 crore in the year-ago period.

In the reporting quarter, net interest income (the difference between interest earned and expended) was down 5 per cent at ₹1,406 crore (₹1,484 crore in the year-ago quarter).

However, other income, comprising processing charges, profit on sale of investments, exchange profit and recovery in written-off accounts, increased 31 per cent to ₹760 crore (₹579 crore). Provision for bad loans and standard loans rose sharply to ₹719 crore (₹77 crore) and ₹74 crore (₹30 crore), respectively.

Year-on-year, deposits increased 18 per cent to ₹2,38,006 crore. Loans nudged up 6 per cent to ₹1,95,057 crore.

As at September-end 2014, net interest margin was lower at 1.93 per cent against 2.17 per cent in the year-ago period.

As at September-end 2014, gross non-performing assets (NPAs) as a percentage of gross advances worsened to 5.72 per cent (4.98 per cent).

Cash set aside for bad loans helped marginally bring down net NPAs as a percentage of net advances to 2.79 per cent (2.82 per cent). During the quarter, IDBI Bank saw fresh NPA accretion of ₹1,093 crore (₹1,088 crore in the first quarter).

The bank made recoveries of ₹173 crore (₹174 crore in the first quarter) and saw upgradation of bad loans aggregating ₹113 crore (₹106 crore).

IDBI Bank’s shares ended at ₹70.55 apiece, up 3.37 per cent over the previous close, on the BSE.

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