IDBI Bank Q3 PBT at Rs 756 cr on higher NII, dip in NPA provisions

Lender posts net loss on one-time hit as it opts for lower tax rate

Private sector lender IDBI Bank's profit before tax (PBT) stood at Rs 755.89 crore in the third quarter ended December 2019  (Q3FY20) on teh back of a rise in net interest income and a dip in provisions for bad loans.

Mumbai-based lender had posted pre tax loss of Rs 5,805 crore in quarter enxed December 2018 (Q3FY19.)

However, the bank posted a net loss of Rs 5,763 crore in the reporting  quarter, as against net loss of Rs 4,185 crore in Q3FY19. It exercised the option of a lower tax rate and took a one-time hit of Rs 6,273 crore in Q3Fy20.

Its stock closed 2.1 per cent higher at Rs 35 per share on the BSE.

The lender, a subsidiary of  state-owned LIC, has been under RBI's prompt corrective action (PCA) regime due to weak asset quality and profitability. It expects to exit the PCA regime by the end of current financial year.

The bank said in a statement that its net interest income (NII) saw an uptick of 13 per cent at Rs 1,532 crore in Q3FY20, from Rs 1,357 crore in same quarter the previous financial year. Net Interest Margin (NIM) improved to 2.27 per cent in the reporting quarter from 1.88 per cent in Q3FY19.

Its Advances shrank to Rs 1,29,671 crore in December 2019 from Rs 1,52,520 crore a year ago. The share of retail loans in total advances improved to 55 per cent from 48 per cent. The share of corporate loans slid to 45 per cent by December 2019 from 52 per cent a year ago.

Bank gave a guidance of 10 per cent growth in credit for 2020-21.

It deposits rose to Rs 2,18,180 crore as on December 31, 2019 from Rs 2,29,966 crore. The share of low-cost savings account and current account (CASA) rose to 47.65 per cent in Q3Fy20 from 38.36 per cent a year ago.

IDBI Bank's asset quality profile improved in the reporting quarter. Gross non-performing assets (GNPA) stood at 28.72 per cent in Q3FY20, compared with 29.67 per cent during Q3FY19.

Provisions for bad loans (NPAs) declined to Rs 440 crore in Q3FY20 from Rs 5,074 crore in Q3Fy19. The provision coverage ratio including technically written-off NPAs was 92.41 per cent in December 2019, compared to 75.21 per cent at December 31, 2018.

The capital adequacy ratio was at 12.56 per cent and Tier-1 capital adequacy ratio stood at 10.16 per cent on a standalone basis at the end of December 31, 2019.