IDBI Bank profit rises 25 pc to Rs 756 crore in June quarter

IDBI Bank on Thursday reported a 25 percent jump in standalone net profit at Rs 756 crore in the June quarter, helped by a decline in bad loans.

The LIC-controlled private sector bank had posted a net profit of Rs 603.30 crore in April-June 2021-22.

However, the total income declined to Rs 5,780.99 crore in the first quarter of the current fiscal from Rs 6,554.95 crore in the year-ago period.

The bank's asset quality improved with gross Non-Performing Assets (NPAs) falling to 19.90 percent of the gross advances as of June 2022 from 22.71 percent as of June 2021, according to a regulatory filing.

Net NPAs too came down to 1.25 percent from 1.67 percent at the end of the first quarter of the last fiscal.

The bank's provisions for bad loans and contingencies stood at Rs 1,751.80 crore in the June quarter, up substantially from Rs 888.05 crore in the year-ago period.

As a result, provisions (other than tax) and contingencies declined significantly to Rs 959.23 crore from Rs 1,844.07 crore a year ago.

Provision Coverage Ratio (including Technical Write-Offs) improved to 97.79 percent as of June 30, 2022, against 94.42 percent last year.

However, the Net Interest Income (NII) declined to Rs 2,488 crore during the period under review. The same stood at Rs 2,506 crore in the preceding year.

During the same time, Net Interest Margin (NIM) declined to 4.02 percent as compared to 4.06 percent in the previous fiscal.

The capital adequacy ratio improved to 19.57 percent in the June quarter, which was 16.23 percent in the corresponding quarter last year.

During the quarter, the bank sold its entire stake of 19.18 percent in Asset Reconstruction Company (India) Ltd to Avenue India Resurgence Pvt Ltd for a sale consideration of Rs 2,361.48 crore, resulting in a profit of Rs 2,140.66 crore.

At the same time, the bank entered into a Share Purchase Agreement with Ageas Insurance International NV (Ageas) on May 19, 2022, to sell IDBI's entire remaining stake (25 percent) in Ageas Federal Life Insurance Company Limited (AFLI) under exercise of a call option by Ageas.

The transaction is awaiting certain regulatory approvals.