MUMBAI: LIC-owned IDBI Bank has reported a 17% jump in net profit at Rs 2,007 crore for the June quarter, despite the divestment-bound bank reporting a steep decline in the key net interest margin to 3.68% during the reporting period from 4.18% a year ago, boosted by a sharp rise in other income.
Interest income rose 5% to Rs 7,021 crore led by a strong growth in income from advances, which increased to Rs 4,771 crore from Rs 4,424 crore a year ago. Interest on balances with the Reserve Bank and interbank funds more than doubled to Rs 188 crore from Rs 81 crore, the bank said in a statement Monday.
Other income rose sharply to Rs 1,437 crore from Rs 805 crore in the same period last year, boosting total income to Rs 8,458 crore from Rs 7,471 crore.
Total expenditure rose to Rs 6,104 crore from Rs 5,396 crore in the previous year, led by a rise in interest expenses to Rs 3,855 crore and operating expenses to Rs 2,249 crore.
The bank reported a net reversal in provisions of Rs 179 crore in the quarter, compared to a reversal of Rs 443 crore in the year-before period. As a result, profit before tax stood at Rs 2,534 crore, marginally higher than Rs 2,519 crore in the same quarter last year.
After a tax outgo of Rs 526 crore, net profit came in at Rs 2,007 crore.
The bank, which had a third of its assets turning dud during the period system wide NPAs were in high double digits, saw the overall asset quality improving during the reporting period. While gross non-performing assets fell to Rs 6,385 crore from Rs 7,795 crore a year ago, while net NPAs came down to Rs 447 crore from Rs 454 crore. As a result gross NPA ratio improved to 2.93 from 3.87, net NPA ratio inched down to 0.21 from 0.23—one of the lowest.
The bank's provision coverage ratio, including technical write-offs, remained robust at 99.31 percent.
The capital adequacy ratio stood at 25.39 compared to 22.42 a year ago with the CET-1 ratio improving to 23.71 from 20.26.
The loan book grew to Rs 2,11,907 crore from Rs 1,94,026 crore, while deposits increased to Rs 2,96,868 crore from Rs 2,77,548 crore, taking the total assets to Rs 4,03,080 crore.