IDBI Bank posts Q1 net profit at Rs 144 crore on lower provisions

IDBI Bank on Tuesday reported a net profit of Rs 144 crore for the first quarter ended June 30, as against net loss of Rs 3,801 crore in the same quarter last year, helped by decline in provisions and improvement in asset quality. The profit grew by 7 per cent as against Rs 135 crore reported for Q4 FY20, the lender said in a filing to the Bombay Stock Exchange.

The LIC-owned private lender, which is under the RBI's prompt corrective action (PCA) framework, posted net interest income (NII), the difference between interest earned and interest expended, at Rs 1,773 crore compared to Rs 1,458 crore in Q1FY20, registering a year-on-year growth of 22 per cent. Net interest margin grew by 68 basis points YoY to 2.81 per cent.

For the April-June quarter, the bank's operating profit jumped by 39 per cent to Rs 1,326 crore as against Rs 951 crore for Q1FY20.

Provision and contingencies fell sharply by 88 per cent to Rs 888 crore in April-June quarter of this fiscal as against Rs 6,332 crore in the same period a year ago. Provision Coverage Ratio (including Technical Write-Offs) improved to 94.71 per cent from 87.79 per cent as on June 30,2019 and 93.74 per cent as on March 31, 2020.The bank said that it continues to hold provisions against impact of COVID-19. During June quarter, the lender made further COVID 19 related provisions of Rs 189 crore (Cumulative provision of Rs 436 crore), which is more than minimum required as per the RBI guidelines, it said.

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On asset quality front, IDBI Bank's assets remained under stress during the June quarter. Gross non-performing assets (NPAs) ratio, as a percentage of gross advances, remained elevated at 26.81 per cent against 29.12 per cent in Q1 FY20. Net NPA ratio, however, fell sharply to 3.55 per cent as compared to 8.02 per cent in the year-ago period.

In absolute terms, the bank's Gross NPA stood at Rs 44,475.20 crore and Net NPA stood at Rs 4.473.73 crore as on June 30, 2020.

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IDBI Bank's CASA (Current Account and Savings Account) increased to Rs 1,04,315 crore as on June 30, 2020 as against Rs 99,590 crore as on June 30, 2019. Share of CASA in Total Deposits improved to 47.55 per cent as on June 30, 2020 as against 43.15 per cent as on June 30, 2019.

Ahead of Q1 earnings, IDBI bank shares settled day's trade at Rs 38.25, up 3.66 per cent, against previous closing price of Rs 36.90 on the Bombay stock Exchange.