IDBI Bank Q2 net profit falls 39% to Rs 2,205 crore on year-ago's one-off gain

IDBI Bank Ltd on Saturday reported a 39 per cent year-on-year (YoY) drop in net profit at Rs 2,205 crore for the September quarter compared with Rs 3,627 crore in the same quarter last year.

The lender said the year-ago quarter included a one-off gain of Rs 1,699 crore from the strategic sale of NSDL. Excluding this gain, net profit rose 14 per cent YoY.

Net interest income (NII), the difference between interest earned and interest expenses, climbed 29 per cent YoY to Rs 4,228 crore in the second quarter from Rs 3,285 crore a year earlier. Net interest margin (NIM) increased 40 basis points (bps) YoY to 4.11 per cent in Q2FY27 from 3.71 per cent a year earlier. NIM was up 50 bps quarter-on-quarter (QoQ) from 3.61 per cent in the June quarter.

IDBI Bank says its gross non-performing assets (NPA), as percentage of total advances, fell 53 basis points to 2.12 per cent YoY or 18 basis points YoY. Cost to income ratio for the quarter stood at 48.17 per cent. Return on Assets (ROA) came in at 1.83 per cent.

The bank has been in news this week after the Cabinet Committee on Economic Affairs (CCEA) approved the sale of a 60.72 per cent stake in IDBI Bank to Canada-based Fairfax Financial Holdings’ parent entity, Canada Inc, for Rs 52,878.08 crore. The transaction involved the sale of a 30.48 per cent stake held by the Government of India and a 30.24 per cent stake held by Life Insurance Corporation of India (LIC). Following the transaction, the government will retain a 15 per cent stake in the bank, while LIC will continue to hold 19 per cent.