IDBI Bank posts Rs 1,736-crore loss for March quarter

NPA provisions balloon to Rs 4,275 cr

IDBI Bank has posted a net loss of Rs 1,736 crore for the March 2016 quarter owing to a sharp rise in provisions for bad loans.

The public-sector bank had posted a net profit of Rs 546 crore in the January-March 2015 quarter.

For 2015-16 (full year), the lender’s net loss was Rs 3,665 crore against net profit of Rs 873 crore in 2014-15. The IDBI Bank stock closed almost flat at Rs 64.1 a share on the BSE on Friday, compared to the previous closing price of Rs 64.4.

Kishor Kharat, the bank’s managing director and chief executive, said higher provisions hit the lender’s bottom line. On a sequential basis, however, the net loss was less than the December 2015 quarter’s Rs 2,183 crore.

Provisions for non-performing assets (NPAs) rose to Rs 4,275 crore in the fourth quarter of FY16, up from Rs 1,393 crore a year ago. The NPA provision coverage ratio stood at 57.2 per cent at the end of FY16. Its gross NPA rose to Rs 24,875 crore (11 per cent) at the end of March 2016 from Rs 12,685 crore (six per cent) in March 2015. Asked if slippages into NPAs would stay elevated, Kharat said: “Now at least we can say the storm is gone.”

The bank’s deposits rose 2.3 per cent to Rs 2.6 lakh crore in the March 2016 quarter from Rs 2.6 lakh crore in the year-ago period. Advances grew 3.6 per cent to Rs 2.2 lakh crore by the end of FY16, compared to Rs 2.1 lakh crore in March 2015.

The provisions for NPAs rose to Rs 4,275 crore from Rs 1,393 crore a year ago.

The capital adequacy ratio was 11.7 per cent at the end of March 2016. The bank expects to raise capital up to Rs 6,000 crore through different sources such as equity offering to institutional investors, Tier-I bonds and better retained earnings.