IDBI Bank posts seventh quarterly loss as bad loans rise

(Reuters) - Indian state-run lender IDBI Bank Ltd posted a seventh straight quarterly loss on Tuesday, sending its shares lower, as the bank continues to be plagued by the highest bad loan ratio in the sector.

Indian banks have seen a surge in non-performing loans that hit a record $150 billion at the end of March, with 21 lenders, including IDBI, accounting for 86 percent of the pile.

IDBI's gross bad loans as a percentage of total loans were 30.78 percent at the end of June, compared with 27.95 percent in the preceding quarter, and 24.11 percent a year earlier. Provision for bad loans jumped 145 percent to 46.03 billion rupees ($658.51 million).

 

The bank had in March outlined measures to curb the pile-up of soured assets, that included a reduction in lending to corporates and shutting down unprofitable branches.

Net loss widened to 24.10 billion rupees for the three months ended June 30, compared with a loss of 8.53 billion rupees a year earlier, the Mumbai-based bank said https://www.bseindia.com/xml-data/corpfiling/AttachLive/b23826c5-b9ab-47d3-8781-abf74a51d9b7.PDF.

Shares of the bank were trading marginally lower, after falling as much as 3.7 percent immediately after the results.

The federal cabinet earlier this month approved a planned takeover of IDBI Bank by state-run Life Insurance Corp of India through sale of new shares in the lender, to help IDBI get capital to set aside bad loans and grow its lending.

($1 = 69.9000 Indian rupees)

(Reporting by Chris Thomas and Tanvi Mehta in Bengaluru; Editing by Sunil Nair)