IDBI net slips 9.6%

BS 200 SCORECARD

Industrial Development Bank of India (IDBI) today reported net profit of Rs 126.79 crore in the third quarter of 2006-07, which included Rs 19 crore of profit from the working results of the recently-merged United Western Bank (UWB).

Net profit, on a comparable basis without inclusion of UWB results, was down 9.6 per cent, from Rs 119.30 crore a year earlier as the bank made higher provisioning for bad loans and taxes. UWB was merged with IDBI with effect from October 3, 2006.

"Profits remained flat on account of provisions of Rs 27 crore towards tax liabilities and more than Rs 50 crore for non-performing assets," said VP Shetty, chairman, IDBI.

IDBI's provisioning was Rs 76.44 crore against a write-back of Rs 4.23 crore in the third quarter a year earlier. Provision for non-performing assets (NPAs) increased to Rs 29.18 crore against a write-back of Rs 6.90 crore a year earlier and provisioning for taxes of Rs 26.76 crore against Rs 2.67 crore a year earlier.

The bank's gross non-performing assets increased to 2.37 per cent from 2.19 per cent a year earlier. Net interest income rose to Rs 211.93 crore on the back of a robust 35 per cent growth in interest income. Interest income grew to Rs 1,697.35 crore at the end of December from Rs 1,251 crore a year earlier.

"There was a considerable growth in interest income. Cash recovery at a little over Rs 400 crore in the 9-month period helped in bottomline, " said Shetty.

Total cash recovery from non-performing liabilities stood at Rs 495 crore at the end of December. Net interest margin (NIM) improved to 1.02 per cent in the third quarter from 0.68 per cent in the preceding quarter .

The cost of funds increased to 7.19 per cent from 7.04 per cent a year earlier and 6.66 per cent in the preceding quarter. "We are expecting additional pressure on cost of funds as the market is going haywire," said Shetty.