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IDBI Bank reported a net profit of ₹135 crore for the fourth quarter ended March 31, after reporting net loss for the last 13 quarters.
Robust growth in net interest income (difference between interest earned and interest expended) and write-back in provisions for non-performing assets (NPAs) helped the Bank post a turnaround performance.
Net interest income jumped 46 per cent to ₹2356 crore (₹1609 crore in the year ago quarter). The write-back in NPA provisions was at ₹1,511 crore. Other income increased 15 per cent to ₹1,326 crore (₹1,153 crore).
The Bank made Covid-19 related provisions of ₹247 crore towards standard sssets in the reporting quarter.
As per the notes to accounts, during the reporting quarter, IDBI Bank made additional provision of ₹431 crore over and above the IRAC (income recognition and asset classification) norms in respect of certain borrower accounts in view of the inherent risk and uncertainty of recovery in these identified accounts.
First time non-performing assets (NPAs) during the quarter came down to ₹727 crore (₹2,113 crore in December 2019 quarter). Increase in existing NPAs was also lower at ₹531 crore (₹1,007 crore). Recoveries and upgradation were lower at ₹1,785 crore (₹3,431 crore).
Emphasising the substantial improvement in the net NPA (NNPA) position from 5.25 per cent in the December 2019 quarter to 4.19 per cent in the March 2020 quarter, Rakesh Sharma, MD & CEO, said his Bank expects to come out of the restrictive prompt corrective action (PCA) based on the latest financial performance.
Net interest margin (NII/ average earning assets) improved to 3.80 per cent from 2.27 per cent in the December 2019 quarter.
Moratorium offered due to Covid-19
Sharma said 68 per cent of total number of retail borrowers (66 per cent by value of exposure) opted for the three month moratorium on loan repayments. In the case of priority sector lending portfolio, 99 per cent of the borrowers (97 per cent by value of exposure) opted for the moratorium.
In the case of large and mid-corporate borrowers, 69 per cent and 53 per cent of the borrowers opted for moratorium.
The IDBI Bank chief said that the bank is keeping a close eye on accounts in sectors such as aviation, hospitality and tourism, which have been adversely impacted due to Covid-19, and their ripple effect on people employed in these sectors.
The recoveries would have been higher by ₹700 crore, but for the Covid-19 impact, he said.
Sharma said IDBI Bank will not be required to deploy funds in the Rural Infrastructure Development Fund (RIDF) in FY21 as it will fulfill all the norms relating to priority sector lending. Further, it will receive RIDF maturity proceeds aggregating ₹6,178 crore in the current FY.
Deposits declined 2.17 per cent year-on-year (yoy) to ₹2,22,424 crore as at March-end 2020. Advances fell 11.54 per cent yoy to ₹1,29,842 crore.
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