IDBI Bank Q1 results: Net profit rises 62% to Rs 1,224 cr, NII up 61%

IDBI Bank on Monday reported a 62 per cent rise in net profit for the first quarter, to Rs 1,224 crore compared to Rs 756 crore in the first quarter last financial year due to healthy growth in core income and recovery.

The bank's net interest income (NII) surged 61%, to Rs 3,998 crore for the quarter, compared to Rs 2,488 crore in the same quarter last year. Operating profit for the quarter ending in June rose 47 per cent to Rs 3,019 crore, as against Rs 2,051 crore reported in the same period last year.

The lender's net interest margin (NIM) rose 178 basis points, to 5.8 per cent for the first quarter, compared to 4.02 per cent for the same period in the previous year.

"With the increase in rates, the yield on advances has increased. Of course sometimes lag effect will be there so slowly in the coming quarters the cost of deposits may increase. This quarter we had one good recovery of Rs. 1000 crore which has partly contributed to the margins," Rakesh Sharma, managing director and chief executive officer at IDBI bank said.

During the quarter, provisions increased by 24 per cent year-on-year (YoY), reaching Rs 1,190 crore, with provisions for non-performing assets standing at Rs 581 crore.

“We had extra recovery of Rs.1600 crores so we decided that we should have accelerated reserves. In the past also we have been doing accelerated provisioning, over and above the regulatory provisioning,”

The gross non-performing assets decreased to 5.05 per cent from 19.9 per cent a year ago, and 6.38 per cent in the previous quarter. The provision coverage ratio, including technical write-offs also improved to 98.99% as of June 2023, compared to 97.78 per cent a year ago.

"The bank is focused on recoveries from bad loans as well as those that have been technically written off to clean the balance sheet. We are already at about 99 per cent PCR and I don't see much room from here," he added.

The bank's CASA (Current Account and Savings Account) grew to Rs 1.28 trillion, with the CASA ratio standing at 52.61 per cent at the end of the June quarter.

The net advances were up 20 per cent YoY, reaching Rs 1.65 trillion while deposits grew by 9% to Rs 2.44 trillion.