IDBI Bank Q1 net profit up 46 per cent; NPAs rise

IDBI Bank has posted a 46% jump in its net profit for the quarter ended June 30.

Government-owned IDBI Bank has posted a 46 per cent jump in its net profit for the quarter ended June 30,helped by a healthy jump in its net interest income and despite a significant rise in its bad loans.

Net profit grew to Rs 251-crore during the quarter from Rs 172-crore in the year-ago period buoyed by a good jump in its net interest and fee-based revenues to Rs 851-crore and 385-crore,respectively. Total income grew to Rs 4,755-crore from Rs 4,219-crore in Q1 last year.

During the quarter,the bank witnessed a 38 per cent growth in its loans to Rs 1.35-lakh-crore while deposit-base expanded by 36 per cent to Rs 1.57 lakh crore. For the full fiscal,IDBI Bank has targeted a loan growth of 20 per cent with demand expected to come from SME,agriculture,infrastructure and mid-corporate segments,IDBI Bank Chief Financial Officer,P Sitaram said.

Story continues below this ad

“Although there was a slight decline in the loanbook-size in Q1 compared to the March-quarter,the growth should improve from here and for the full fiscal we target a 20 per cent loan growth,” Sitaram said,adding the deposit

book is also expected to grow at 20 per cent in FY 11.

Corporate loans currently contribute more than 70 per cent of IDBI Bank’s loanbook.

The net interest margin,which is the spread between interest earned and interest expended,stood at 1.64 per cent at end-June. The bank hopes to maintain its NIM in the range of 1.6-1.7 per cent throughout the year,Sitaram said.

Story continues below this ad

Bad loans of the bank,during the quarter,escalated with net non-performing assets standing at 1.92 per cent against 1.23 per cent in the year-ago period,mainly due to some NPAs from the restructured assets. The bank plans to bring down the net NPA level below one per cent by the year-end,he said.

On IDBI Bank’s proposed issue of Medium-Term-Notes abroad,Sitaram said the bank would exercise the option when the market conditions turn favourable. “We are always looking at that option and will do the issue when the market conditions are conducive,” Sitaram said.

IDBI Bank is currently adopting the necessary steps to receive the Rs 3,119.04 crore capital infusion from the Government,which was communicated to the bank recently,Sitaram said.

Presently,the lender has a capital adequacy ratio of 11.86 per cent,with Tier-I CAR at 6.69 per cent as at end-June.