IDBI Bank Thursday posted a net loss of Rs 4,918 crore for the March quarter on the back of high provisions. However, the net loss of the bank narrowed from Rs 5,663 crore in the year-ago quarter.
The bank’s pre-provisioning operating profit dropped 41 per cent year-on-year (y-o-y) to Rs 1,396 crore, led by the rise in employees cost and a 57 per cent y-o-y drop in the other income.
Net interest income (NII) rose 76 per cent y-o-y to Rs 1,609.27 crore as the interest expense fell significantly; though, there was just a slight increase in interest income. Net interest margin (NIM) improved to 2.26 per cent in the Q4FY19 compared with 1.19 per cent in the Q4FY18.
The lender made a massive provision of Rs 7,223.26 crore in the last quarter. However, it came down 33 per cent from Rs 10,773.3 crore in the corresponding quarter last year. Asset quality improved as gross non-performing asset (NPA) ratio improved to 27.47 per cent in the Q4FY19 against 29.65 per cent in the previous quarter and 27.95 per cent in the Q4FY18.
Net NPA ratio also picked up to 10.11 per cent in the Q4FY19 against 14.01 per cent in the Q3FY19 and 16.69 per cent a year ago. Provision coverage ratio (PCR) improved to 82.88 per cent from 63.40 per cent in the same quarter last year.
Recovery from NPAs was Rs 9,326 crore in FY19, including interest recovery of Rs 2,883 crore.
Deposits fell to Rs 2.27 lakh crore in FY19 from Rs 2.48 lakh crore in the previous year. CASA increased to Rs 96,730 crore in the March quarter against Rs 92,102 crore in the previous year. CASA ratio improved to 42.54 per cent against 37.15 per cent a year ago.
Advances fell to Rs 1.46 lakh crore in FY19 from Rs 1.71 lakh crore in FY18. Retail loans accounted for 51 per cent of the total loan book and the rest was filled by the corporate loans.
Return on assets stood at -6.16 per cent for Q4FY19, a slight improvement from -6.68 per cent last year but a decline from -5.19 per cent in the previous quarter.
IDBI Bank managing director and chief executive officer Rakesh Sharma detailed a timeline for exiting the Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework. By June 30, the bank’s net NPA will come down to under 9 per cent and by September 30, it will drop to below 6 per cent, he said. The bank will return to profitability by Q3 or Q4 of FY20.
“That way we will be compliant with all the parameters. As of now, we are compliant in terms of capital and leverage ratio. In terms of net NPA, we have come down from threshold 3 to threshold 2,” Sharma said. —FE