IDBI Bank hits the roof on turnaround Q1 numbers

IDBI Bank hit an upper circuit of 5% at Rs 40.15 after the bank reported net profit of Rs 144.43 crore in Q1 June 2020 compared with net loss of Rs 3,800.84 crore in Q1 June 2019.

Total income fell 0.4% to Rs 5,901.02 crore in Q1 June 2020 as against Rs 5,923.93 crore in Q1 June 2019. Pre-tax profit stood at Rs 437.97 crore in Q1 June 2020 as compared to a pre-tax loss of Rs 5,381.10 crore in Q1 June 2019. The result was announced at the fag end of trading hours yesterday, 28 July 2020.

Net Interest Income (NII) for Q1 FY2021 jumped 22% to Rs 1,773 crore from Rs 1,458 crore for Q1 FY2020. Net Interest Margin (NIM) during the quarter improved by 68 bps to 2.81% as compared to 2.13% in the corresponding quarter last year.

The bank's gross non-performing assets (NPAs) stood at Rs 44,475.20 crore as on 30 June 2020 as against Rs 47,272.37 crore as on 31 March 2020 and Rs 51,657.63 crore as on 30 June 2019. The ratio of gross NPAs to gross advances stood at 26.81% as on 30 June 2020 as against 27.53% as on 31 March 2020 and 29.12% as on 30 June 2019. The ratio of net NPAs to net advances stood at 3.55% as on 30 June 2020 as against 4.19% as on 31 March 2020 and 8.02% as on 30 June 2019.

The bank's provisions and contingencies slumped 86% to Rs 888.05 crore in Q1 FY21 over Rs 6,332.05 crore in Q1 FY20. Provision coverage ratio (including technical write-offs) improved to 94.71% as on 30 June 2020 from 87.79% as on 30 June 2019 and 93.74% as on 31 March 2020.

IDBI Bank continues to hold provisions against impact of COVID-19. During quarter ended June 2020, the bank has made further COVID-19 related provisions of Rs 189 crore (cumulative provision of Rs 436 crore). The provision made by the bank is more than minimum required as per the RBI guidelines.

Current Account-Savings Account (CASA) increased to Rs 1,04,315 crore as on 30 June 2020 as against Rs 99,590 crore as on 30 June 2019, recording a 4.74% rise Y-o-Y (year-on-year). Share of CASA in total deposits improved to 47.55% as on 30 June 2020 on comparison to 43.15% as on 30 June 2019.

Meanwhile, in IDBI-LIC partnership, LIC renewal premium collection through cash & cheque increased during COVID-19. 95% branch activation and 1.15 lakh transactions during Q1 FY21. Memorandum of Understanding (MoU) for tie-up with LIC-Card Services for launching co-branded credit cards executed.

IDBI Bank offers a wide range of products from savings and current bank account to loans for retail and MSME customers or agri-loans to farmers. As on 30 June 2020, the Government of India holds 47.11% stake while Life Insurance Corporation of India held 51% stake in the IDBI Bank.

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