IDBI Bank on Wednesday reported a net profit of Rs 603 crore in the June quarter of FY20, up 318 per cent year-0n-year (YoY) and 18 per cent sequentially, aided by higher other income. In the year-ago period, it had reported a net profit of Rs 144 crore.
Net interest income (NII) of the lender jumped 41 per cent YoY to Rs 2,506 crore but sequentially it was down 23 per cent. Its net interest margin (NIM) increased by 125 basis points (bps) to 4.06 per cent in Q1FY22 as against 2.81 per cent in the year-ago period.
Provisions and contingencies were significantly higher on a YoY basis but sequentially provisions were down. In Q1FY22, provisions made by the lender increased by 97 per cent YoY to Rs 1,752 crore. In Q4FY21, its provisions were to the tune of Rs 2,457 crore. As of June 30, 2021, it is holding covid related provisions of Rs 863 crore.
During the quarter ended June 30, 2021, the bank has made an additional provision of Rs 447.31 over and above the IRAC norms in respect of certain borrower accounts in view of the inherent risk and uncertainty of recovery in these identified accounts.
Asset quality of the lender has improved on a YoY basis but on a sequential basis, it showed a marginal uptick. Gross non-performing assets (NPAs) of the lender as of Q1FY22 stood at 22.71 per cent of gross advances, up 34 bps from March quarter but down 410 bps from last year June quarter. On the other hand, net NPAs of the lender showed improvement both on a YoY and sequential basis. As of June quarter, net NPAs stood at 1.67 per cent, down 30 bps from March quarter and 188 bps from last year June quarter.
Its provision coverage ratio stood at 97.42 per cent at the end of Q1FY22 as against 96.90 per cent in the March quarter. Out of total gross NPAs of Rs 35,594 crore, the bank has provided in full for Rs 32,817 crore.
Recovery from write-off accounts for the bank improved to Rs 331 crore in Q1FY22 as against Rs 117 crore in Q1FY21 and Rs 269 crore in Q4FY21.
“The bank has geared itself on all fronts to meet the challenges imposed by covid including the likelihood of rise in customer defaults and an increase in provisioning requirements”, it said in a statement.
Deposits accretion of the lender was down 3.7 per cent sequentially to Rs 2.22 trillion as of June quarter. Share of low cost deposits of the bank improved to 52.44 per cent in the June quarter as against 50.45 per cent in the March quarter. On the other hand, loan book of the bank saw degrowth of 4 per cent sequentially to Rs 1.22 trillion.