IDBI BANK

Dalal Street Investment Journal - - QUERY BOARD -

IDBI Bank Limited pro­vides per­son­alised bank­ing and fi­nan­cial so­lu­tions to clients. Its seg­ments com­prise of whole­sale bank­ing, re­tail bank­ing and trea­sury ser­vices. The cor­po­rate/whole­sale bank­ing seg­ment com­prises of cor­po­rate re­la­tion­ship in­volv­ing de­posit and credit ac­tiv­i­ties,w hile the re­tail bank­ing seg­ment in­cludes credit and de­posit ac­tiv­i­ties ori­ented to­wards in­di­vid­u­als and small busi­nesses.

The re­tail bank­ing seg­ment also en­com­passes pay­ment and al­ter­nate chan­nels, such as au­to­mated teller ma­chines (ATMS), point of sale (POS) ma­chines, in­ter­net bank­ing, mo­bile bank­ing, third party dis­tri­bu­tion and trans­ac­tion bank­ing ser­vices. The bank’s trea­sury ser­vices seg­ment in­clude trad­ing port­fo­lio of in­vest­ments, money mar­ket op­er­a­tions, de­riv­a­tives trad­ing and for­eign ex­change op­er­a­tions on the ac­count and for cus­tomers.

On the fi­nan­cial front, IDBI Bank posted 14.05 per cent de­cline in its in­ter­est earned to ₹6,004.32 crore in the sec­ond quar­ter of FY18 as against ₹6,985.62 crore in the same quar­ter of FY17. The bank’s op­er­at­ing profit in­creased by

81.75 per cent to ₹2,798.23 crore in the sec­ond quar­ter of FY18 as com­pared to ₹1,539.64 crore in the same quar­ter of the pre­vi­ous fis­cal. How­ever, the bank posted a dras­tic de­cline in its profit af­ter tax from ₹55.52 crore in the sec­ond quar­ter of FY17 to a net loss of ₹197 crore in the sec­ond quar­ter of FY18.

On an an­nual ba­sis, the bank’s in­ter­est earned de­creased by 0.90 per cent to ₹27,791.37 crore in FY2017 as against ₹28,042 crore in the pre­vi­ous fis­cal. The bank’s op­er­at­ing profit de­clined by 14.74 per cent to ₹4,578 crore in the fi­nan­cial year 2017 as com­pared to ₹5,370 crore in the pre­vi­ous fi­nan­cial year.

Fur­ther, the bank’s net loss in­creased from ₹3,664 crore in the pre­vi­ous fis­cal to ₹5,158.14 crore in FY2017. We rec­om­mend in­vestor-read­ers to Hold the stock.

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