IDBI Bank on Tuesday reported a net loss of Rs 5,763.04 crore for the third quarter ended December 31, 2019, on higher provisions and weak asset quality. The LIC-owned private lender, which is under the RBI's prompt corrective action (PCA) framework, posted net loss of Rs 4,185.48 crore in the year-ago period and Rs 3,458.84 crore loss in the September quarter.
For the October-December quarter, the troubled bank made Rs 6,273 crore as provisions for taxes, even provisions and contingencies fell sharply to Rs 521.95 crore compared with Rs 6,530.75 crore in the corresponding period last year.
"During the quarter, bank exercised the option of lower tax rate taking one time hit of Rs 6,273 crore. Excluding the impact of this one time additional hit, bank would have reported net profit of Rs 418 crore against the net loss of Rs 5,763 crore being reported for the current quarter," IDBI Bank said in a filing to the Bombay Stock Exchange.
Profit before tax for Q3 FY20 increased to Rs 756 crore as against loss of Rs 5,805 crore for Q3 FY19.
Net interest income, the difference between interest earned and interest expended, improved by 13 per cent to Rs 1,532 crore as against Rs 1,357 crore for Q3 FY19. Net interest margin (NIM) for Q3 FY20 improved by 39 basis points to 2.27 per cent as compared to 1.88 per cent for Q3 2019.
Operating profit for October-December period increased by 76 per cent to Rs 1,278 crore as against Rs 725 crore for Q3 2019.
Non-interest income to total income rose by 20.57 per cent for Q3 FY20 as compared to 11.28 per cent for Q3 FY19.
Total income of the bank increased marginally to Rs 6,215.60 crore as compared to Rs 6190.94 crore.
In respect of RBI referred NCLT accounts, the bank is holding a total provision of Rs 22,644.40 crore as on December 31, 2019, it said in the filing.
Provision Coverage Ratio (including Technical Write-Offs) stood at 92.41 per cent as on December 31, 2019.
Authorised capital of the bank has increased from Rs 15,000 crore to Rs 25,000 crore on October 22, 2019.
On the asset quality front, the bank's assets remained under stress. Gross NPA, as a percentage of gross advances, in Q3 FY20 remained high at 28.72 per cent against 29.67 per cent in Q3 FY19. Net NPA ratio, however, fell sharply to 5.25 per cent as on December 31, 2019 compared to 14.01 per cent in the year-ago period.
In a separate filing, the bank said it had issued equity shares on preferential basis to Government of India and Life Insurance Corporation of India (LIC) for Rs 9,300 crore on October 22, 2019. "The equity issue Rs 9,300 crore is fully utilised there is no deviation therein terms of the guidelines issued by Reserve Bank of India from time to time," the bank said.
In the Union Budget 2020, the government proposed to sell its stake in the bank, which currently stood at 47.11 per cent. LIC holds a majority 51 per cent.
Ahead of Q3 earnings, IDBI bank shares closed Tuesday's trade at Rs 37, up 2.07 per cent, on the Bombay stock Exchange.
By Chitranjan Kumar