IDBI Bank posts pre-tax profit of ~289 cr in Q4

Private sector lender IDBI Bank posted a pre-tax profit of ~289.66 crore in the March quarter on a healthy rise in net interest income and a sharp drop in provisions and contingencies.

The bank, which is under the Prompt Corrective Action (PCA) framework, had posted a loss of ~7,136.90 crore in the quarter ended March 2019 (Q4FY19).

Its net profit in the reporting quarter stood at ~135.39 crore against a net loss of ~4,918.44 crore in Q4FY19. The lender had been posting a net loss for the past 13 quarters.

At ~1 2,887.34 crore, the bank narrowed its net loss for the financial year ended March (FY20), from ~15,116.30 crore in FY19.

Its net interest income (NII) rose by 46 per cent to ~2,356 crore in the quarter, from ~1,609 crore Q4FY19.

Provisions and contingencies declined substantially to ~567.5 crore, from ~17 7.76 crore in Q4FY19. The provision coverage ratio improved to 93.74 per cent at the end of March, against 82.88 per cent in March 2019.

The bank has made Covid-related provisions of ~247 crore, more than the regulatory minimum.

Asked about the impact on borrowers due to the pandemic, R Sharma, managing director & chief executive officer of the bank, said those working in aviation, hotel and tourism industry have been affected. “The bank is talking to them and will closely monitor developments,” he said.

The bank has made additional provisions of ~431.05 crore, over and above the regulator y norms, for certain borrower accounts due to the inherent risk and uncertainty of recovery in these identified accounts.

The asset quality of the bank showed an improvement in slippages during the quarter. The gross non-performing assets (GNPAS) stood at 27.53 per cent as against 27.47 per cent in Q4FY19. Gross NPAS stood at 28.72 per cent at end of December 2019 (Q3FY20).

Net NPAS declined to 4.19 per cent in March from 10.11 per cent in March 2019.

The bank has achieved all PCA parameters for an exit, except for return on assets and will soon make a presentation to the Reserve Bank of India, it said.

As of March 31, the bank’s deposits declined by 2.1 per cent to ~2.2 trillion, while the advances shrunk by 6 per cent to ~1.7 trillion in FY20.

The capital adequacy ratio stood at 13.31 per cent as of March 31, with tier-i capital at 10.57 per cent and tier-ii at 2.74 per cent.