IDFC First Bank posts pre-tax loss of Rs 1,623 crore in Q3

Makes heavy provision for telecom and legacy infra loan

Private sector lender IDFC First Bank posted a pre-tax loss of Rs 1,623.04 crore in the third quarter ended December 2019 (Q3Fy20) due to heavy one-time provisions for telecom and legacy infrastructure loan account.

It had posted net pre-tax loss of Rs 2,503.91 crore in Quarter ended December 2018 (Q3Fy19).

Its stock closed 1.72 per cent higher at Rs 44 per share on BSE. Bank announced third quarter results late in night after seven hour meeting of its board.

The bank reported a net loss of Rs 1,638.8 crore for the quarter ended December 31, 2019, as compared to a loss of Rs 1,538.01 crore as on December 31, 2018, according to filing with stock exchange.

Its Net Interest Income (NII) in Q3 FY20 grew by 34 per cent to Rs 1,534 crore, up from Rs 1,145 crore in Q3 FY19. The Net Interest Margin rose sharply to 3.86 per cent in Q3 FY 20 from 2.89 per cent in Q3 FY19.

It’s fee and other income was Rs 413 crore in Q3 FY20 as compared to Rs 257 crore in the corresponding period last year.

Bank in a statement said it made one-time provision towards an identified legacy telecom exposure, totalling Rs 1,622 crore for which it provided 50% of its exposure and provisions of Rs 110 crore towards one legacy infrastructure account.

The bank has a legacy exposure of Rs 3,244 crore to this identified telecom company as of December 31, 2019, of which Rs 2,000 crore is in the form of non-convertible debentures and Rs 1,244 crore is in the form of non-funded exposure (Bank Guarantees) for spectrum.

There has been no payment default so far from this telecom company. However, considering the financial stress in the telecom companies related to payments due to government, the bank has taken provisioning towards this identified telecom company which is in financial stress in the third quarter, it said.

Its gross non-performing assets (NPAs) rose to 2.83 per cent in Q3Fy20 from 1.97 per cent in Q3Fy19.

Its total loan book expanded marginally at Rs 1,06,140 crore Q3 FY20, compared to Rs 1,04,660 crore (Q3 FY19). Its Retail Loan Book increased to Rs 51,506 crore in Q3 FY20, from to Rs 36,236 crore in Q3 FY19. The Wholesale Loan Book reduced to Rs 42,951 crore Q3 FY20 from Rs 56,809 crore Q3 FY19.

Its capital adequacy stood at 13.29 per cent out of which Tier 1 was at 13.28 per cent as of 31st December 2019.