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IDBI Bank share gains 5% after lender turns profitable in FY21

IDBI Bank share gains 5% after lender turns profitable in FY21

Net profit in the March ended quarter stood at Rs 512 crore, up 278 per cent on a year-on-year basis and 35 per cent on a sequential basis

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Shares of IDBI Bank rose nearly 5 per cent today after the private sector lender turned profitable after five years in last fiscal. The bank reported a net profit of Rs 1,359 crore for FY21 compared to a loss of Rs 12,887 crore in FY20.

Net profit in the March ended quarter stood at Rs 512 crore, up 278 per cent on a year-on-year basis and 35 per cent on a sequential basis.

Net Interest Income (NII) rose 38 per cent to Rs 3,240 crore in the March quarter compared to Rs 2,356 crore in Q4FY20. Gross non-performing assets (NPA) declined to 22.37 per cent in Q4FY21 as against 23.52 per cent as of 31st December 2020. Net NPAs stood at 1.97 per cent as against 4.19 per cent as of March 31, 2020.

"At March 31, 2021, the Bank has made COVID-19 related provisions of Rs 363 Crore. The provision made by the Bank is more than minimum required as per the RBI guidelines. Considering that there is still stress in the economy due to the COVID situation, Bank has continued with the COVID-19 provision. Considering the second wave of COVID from mid of March 2021 which is again threatening to disrupt the economic activities in many states, where the pandemic is more severe and possibilities of lockdown going forward in case situation do not improve," the company said in a press release.

"Since the intensity of the local lockdowns is still evolving and dynamic, Bank has preferred to have conservative and a pragmatic approach and have adequate provision made in March 2021 quarter to partially offset the impact and accordingly has provided Rs 500 crore in addition to the COVID-19 provision. The total cumulative provisions held towards COVID-19 are ? 863 crore (other than provisions held for restructuring under COVID-19 norms)," it added.

The lender further said that it plans to maintain the Net NPA level below 3 per cent till March 2022 and 2.5 per cent thereafter. It also aims to improve NII with credit growth driven from lending to the mid-corporate and MSME sector with its continued focus on the retail segment mainly the housing loan segment.

At 03:10 hours, IDBI Bank share was quoting at Rs 36.30, up 0.28 per cent on the BSE.