IDBI Bank Q4 net down 7% on higher provisions, flat loan-book

State-run IDBI Bank today reported 7 per cent drop in net profit at Rs 518 crore for the March quarter on higher provisioning, which jumped 28 per cent to Rs 1,332 crore.
"The lower profit was driven mainly by increased provisioning for non-performing loans and investments," IDBI Bank Chairman and MD M S Raghavan told reporters here.
For the full year (FY14), the lender reported a steep 67 per cent drop in net profit at Rs 1,121 crore from Rs 1,882 crore a year ago as its overall provision for the fiscal rose to Rs 4,560 crore from Rs 3,577 crore.

For the fourth quarter ended March 31, the provisions rose 28 per cent to Rs 1,332 crore from Rs 1,040 crore.
Net interest income grew marginally by 9.3 per cent to Rs 1,574 crore, while net interest margin (NIM) improved to 2.2 per cent in Q4 from 2.19 per cent in Q4, FY13. The bank expects to maintain its NIM at 2.2 per cent in FY15.
Gross non-performing assets for Q4 stood at 4.90 per cent as against 3.22 per cent, while net NPAs expanded to 2.48 per cent from 1.58 per cent a year ago.

However, Raghavan said, "asset quality stress has bottomed out. The NPA level has peaked, but it will take at least two more quarters for the stress to ease."

In Q4, the PSU lender had a fresh slippage of Rs 1,900 crore. It sold Rs 1,300 crore worth of bad assets to asset reconstruction companies during the quarter. The bank's recovery in the quarter stood at Rs 1,400 crore.
Deposits rose to Rs 2,35,774 crore from Rs 2,27,116 crore, a growth of 4 per cent, while advances inched up to Rs 1,97,686 crore from Rs 1,96,306 crore. "We expect 15 per cent growth in deposits and advances this year (FY15)," he said.
Aggregate assets as of March-end stood at Rs 3,28,997 crore as against Rs 3,22,769 crore last year, up 2 per cent.

The bank has received board approval to raise USD 5 billion through MTN issues and it also plans to mop up Rs 2,000 crore through tier-I bonds.
Commenting on the results, Angel Broking's Vaibhav Agrawal said, "IDBI Bank has delivered weak operating performance in Q4, while asset quality remained largely stable. Net interest income grew modestly by 9.3 per cent at Rs 1,574 crore, while non-interest income remained flat, leading to a muted operating income growth of 5.4 per cent."
The IDBI Bank stock closed at Rs 68.20 on the BSE, up 0.2 per cent.