IDBI Bank turned profitable in FY21 after five years as the private sector lender on Monday reported a net profit of Rs 1,359 crore for the financial year against a net loss of Rs 12,887 crore in FY20.
The bank posted a 278 per cent year-on-year rise in net profit at Rs 512 crore for the fourth quarter ended March 2021 (Q4FY21) on robust growth in net interest income. Sequentially, its net profit was up 35 per cent from Rs 378 crore in the quarter ended December 2021 (Q3FY21).
Ajay Sharma, chief financial officer and executive director, said the bank received tax write-back of over Rs 2,305 crore in Q4FY21 for cases pertaining 1998-2001 period. The interest component in it was Rs 1,308 crore, which has to be used to make a provision of Rs 500 crore for the second wave of pandemic and Rs 800 crore for loans under Stressed Assets Stabilisation Fund.
Its stock closed 2.55 per cent higher at Rs 36.20 per share on BSE. The net interest income improved by 38 per cent for Q4FY21 to Rs 3,240 crore. Sequentially NII was up by 79 per cent over Rs 1,810 crore in Q3FY21. However, other income fell by 11 per cent to Rs 1,182 crore. Sequentially, it was down by 14 per cent in Q3FY21.
Its asset quality improved in the reporting quarter (March 2021). The Gross Non-Performing Asset improved 22.37 per cent in March 2021 whereas sequentially, it declined from 24.33 per cent (proforma basis) at the end of December 2020.
The net NPAs improved to 1.97 per cent as of March 2021 from 4.19 per cent a year ago. NNPA stood at 2.75 per cent (on a proforma basis) in December 2020. Net-NPA level will be maintained below 3 per cent till March 2022 and 2.5 per cent thereafter, said Rakesh Sharma, its managing director and chief executive.
Its provision cover for bad loans rose to 96.90 per cent in March 2021 from 93.74 per cent a year ago. Sequentially, PCR improved to 95.90 per cent (proforma basis) in December 2020. The bank expects slippages to be about 2 per cent (Rs 2,500 crore) in the financial year.
Its deposits rose 4 per cent to Rs 2.3 trillion in FY21. The share of low-cost deposits rose to 50.45 per cent in March 2021 from 47.74 per cent in March 2020.
The bank, which was under Prompt Corrective Action, saw a marginal dip in advances to Rs 1.28 trillion in March 2021 from Rs 1.29 trillion a year ago. The bank expects to grow loan book by 10 per cent in the current financial year with calibrated exposure to corporate accounts and thrust on the retail segment, Sharma said.
Its capital adequacy stood at 15.59 per cent in March 2021 from 13.31 per cent in March 2020 and 14.77 per cent in December 2020.