IDBI Bank posts net loss of Rs 2,183 cr in Q3

Heavy NPA provisons dent bottomline

Public sector lender IDBI Bank reported huge loss of Rs 2,183 crore in the third quarter ended December 2015 on huge provisions for bad loans.

It had posted net profit of Rs 327 crore in October-December 2014.

IDBI Bank stock closed flat at 52.10 per share on Bombay Stock Exchange (BSE).

Its managing director and chief executive officer K Kharat said bank booked loss in Q3 due to provisions for bad loans and write offs.

However, business parameters like net interest income (NII) and net interest margin (NIM) and share of low cost deposits have improved.

Its provisions for non-performing Assets and write offs grew multi-fold to Rs 2, 503 crore in Q3FY16 from Rs 698 crore in Q3FY15. A steep rise in gross NPAs and provisions is consequence of banking regulator's fiat to recognise stressed loans and make provisions for them.

Its Gross NPAs were at 8.94% in December 2015, up from 5.94% in December 2014. The provision coverage ratio stood at 62.92%.

NII rose by 8.73% to Rs 1, 556 crore from Rs 1, 431 crore for the third quarter of 2014-15. The NIM improved to 1.98% in Q3Fy16 from 1.85% of Q3Fy 15.

Despite booking loss, the capital adequacy ratio is above the regulatory minimum requirements. Money to be raised through equity offering will be used to finance growth and not to fund losses, Kharat said.

Its capital Adequacy Ratio was 13% with tier I of 8.71% at end of December 2015.

Bank also plans to monetise some non-core assets in Q4 or early FY17 as growth plans will need capital and expects to raise upto $1 billion (Rs 6,800 crore).