Idbi Net Profit Surges 13.6%, 35% Dividend Announced

The Industrial Development Bank of India (IDBI) managed to overcome falling interest rates and a slowdown in industrial growth during 1996-97 to notch up a 13.6 per cent increase in net profit. IDBIs net profit rose from Rs 1,007 crore in 1995-96 to Rs 1,144 crore in 1996-97.

The apex lending institutions total assets crossed the Rs 50,000 crore mark to touch Rs 50,238 crore an increase of 13 per cent. The net worth grew by 13.9 per cent to Rs 7,213 crore from Rs 6,334 crore in the previous year.

The institution has rewarded its shareholders by stepping up the dividend to 35 per cent from 30 per cent. This effectively means an outgo of 38.5 per cent for IDBI as it will have to pay a dividend tax of 10 per cent.

 

IDBIs business assets jumped by over 15 per cent to Rs 44,000 crore, while its net assets rose by 13 per cent to Rs 7,213 crore. The pre-tax profit for 1996-97 increased by 13.13 per cent to Rs 1,482 crore, compared with Rs 1,310 crore in 1995-96.

Profit after tax (PAT) amounted to Rs 1,144 crore after accounting for Rs 401 crore as tax payment in 1996-97. However, the PAT figure includes Rs 24.9 crore written back income/interest paid in earlier years (Rs 51.8 crore in 1995-96) as well as lease equalisation adjustment for earlier years amounting to Rs 38 crore. This means that the growth in PAT in 1996-97 works out to around 13.2 per cent over the effective PAT of Rs 955.5 crore in 1995-96.

Total income from operations, excluding capital gains on sale of investments, grew by 20 per cent to Rs 5,910 crore from 4,918 crore.

Capital gains booked on the bourses by the institution in 1996-97 were also higher at Rs 53.2 crore compared with Rs 44.8 crore in the previous year. The institutions portfolio also showed an appreciation of Rs 200 crore on March 31,1997 despite a fall of around 300 points in the Bombay Stock Exchange (BSE) sensitive index (Sensex) on that day due to political upheavals.

Although overall sanctions dipped by four per cent to Rs 17,050 crore during 1996-97, disbursements increased by seven per cent to Rs 11,435 crore.

The return on average assets slipped marginally to 2.41 per cent in 1996-97 from 2.44 per cent in 1995-96. However, the margin improved to 3.69 per cent compared with 3.66 per cent in the same period. Return on average net worth for the year was 16.86 per cent as against 19.69 per cent in 1995-96.

The dividend on the equity share capital amounts to Rs 235 crore. Further, the entire preference share capital outstanding of Rs 170 crore was redeemed and a dividend of Rs 15.8 crore on the preference share capital for the period between April 1, 1996 and October 29, 1996 was paid to the Centre in October 1996.