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IDBI Bank has cut its net loss sharply to ₹198 crore in the second quarter, against ₹853 crore in the preceding quarter. The public sector bank had reported a net profit of ₹56 crore in the year-ago quarter.
Net interest income (the difference between interest earned and interest expended) nudged up 4 per cent year-on-year to ₹1,657 crore.
Other income jumped 64 per cent y-o-y to ₹2,293 crore. This includes monies realised on account of divestment of a part of its stake in Small Industries Development Bank of India (₹1,266.45 crore) and Clearing Corporation of India (₹70.96 crore).
Net interest margin (NIM) improved to 2.17 per cent in the reporting quarter from 1.90 per cent in the year-ago quarter.
The bank, in a statement, said fresh slippages reduced to ₹3,381 crore during the reporting quarter, compared with ₹5,587 crore during the year-ago quarter and ₹7,659 crore in the preceding quarter.
Krishna Prasad Nair, Deputy Managing Director, said despite slippages, the bank has maintained its interest income at about ₹6,004 crore (₹6,011 crore in the June quarter). “We have been able to substantially reduce interest expenditure to ₹4,347 crore (₹4,609 crore) and operating expenses to ₹1,153 crore (₹1,245 crore). So, while maintaining the interest income, we have brought down the interest expenditure.”
Gurudeo Yadwadkar, Deputy Managing Director, said the bank had made incremental provision of ₹636 crore during the reporting quarter in respect of 13 accounts covered under the provisions of the Insolvency and Bankruptcy Code.
As at September-end 2016, deposits declined 9 per cent y-o-y to ₹2,41,566 crore. Advances shrunk 16 per cent to ₹1,83,568 crore.
The bank, along with five other public sector lenders, has been placed under prompt corrective action by the RBI in view of high net non-performing assets (NNPAs) and negative return on assets (RoA).
Under the PCA, banks face constraints, including curbs on branch network expansion and dividend distribution, and restriction on expansion of high risk-weighted assets and capital expenditure other than for technological upgradation.
Provisions (other than tax) and contingencies shot up 141 per cent to ₹3,257 crore. Of this, provisions towards non-performing assets (NPAs) were up 39 per cent to ₹1,276 crore.
In absolute terms, gross NPAs (GNPAs) went up by ₹1,195 crore during the quarter to ₹51,368 crore as at September-end 2017.
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