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IDBI Bank posts nearly 4-fold jump in Q4 profit; logs 1st annual profit after 5 years

IDBI Bank posts nearly 4-fold jump in Q4 profit; logs 1st annual profit after 5 years

Published:03 May 2021

LIC-owned IDBI Bank on Monday reported a nearly four-fold jump in its standalone profit after tax to Rs 512 crore in the March quarter compared to Rs 135 crore in the year-ago period on the back of an impressive 38 per cent growth in its net interest income.

Mumbai | LIC-owned IDBI Bank on Monday reported a nearly four-fold jump in its standalone profit after tax to Rs 512 crore in the March quarter compared to Rs 135 crore in the year-ago period on the back of an impressive 38 per cent growth in its net interest income (NII).
The lender also turned profitable on an annual basis after five years as it reported a standalone profit of Rs 1,359 crore for 2020-21 fiscal that ended in March as against a loss of Rs 12,887 crore in FY20.
On a consolidated basis, the lender reported a net profit of Rs 547.93 crore for the January-March quarter as against Rs 165.69 crore in the year-ago period.
In March this year, the Reserve Bank of India (RBI) removed the LIC-controlled bank from its prompt corrective action (PCA) framework, which was imposed in May 2017, after it had breached certain regulatory thresholds, including capital adequacy, asset quality and profitability.
“The bank has been able to turnaround and made a yearly profit (in FY21) after five years of losses. Fourth quarter (FY21) was the fifth quarter when we declared profit,” the bank's Managing Director and CEO Rakesh Sharma said.
NII grew 38 per cent to Rs 3,240 crore for the fourth quarter of FY2021.
Net interest margin (NIM) stood at 5.14 per cent, registering a y-o-y growth of 134 basis points.
Gross non-performing assets (GNPA) ratio improved to 22.37 per cent as against 27.53 per cent. Net NPA stood at 1.97 per cent as against 4.19 per cent as on March 31, 2020.
Provision Coverage Ratio (including technical write-offs) improved to 96.90 per cent as on March 31, 2021. Recovery from technically written off accounts improved to Rs 269 crore in the fourth quarter.
Its Chief Financial Officer (CFO) Ajay Sharma said during the quarter the lender got an income tax refund for the assessment year 1998-99, 1999-2000 and 2000-2001.
“The tax refund was of Rs 2,305 crore. Of which the interest component was Rs 1,308 crore, which has gone into income part and has been taken for provision,” he said.
Total provision increased to Rs 2,367 crore as against Rs 1,738 crore. The bank made a provision of Rs 500 crore for the second wave of COVID-19.
Fresh slippages were Rs 2,281 crore in the quarter. Recovery stood at Rs 1,233 crore.
On the capital front, its tier 1 improved to 13.06 per cent as on March 31, 2021 as against 10.57 per cent as on March 31, 2020. Capital to risk (weighted) assets ratio (CRAR) improved to 15.59 per cent.
The bank's MD and CEO said the bank is looking at a loan growth of 10 per cent during the current financial year. He expects mid and large corporate books to grow at 8-12 per cent and retail at 10-12 per cent.
The bank's scrip closed at Rs 36.20 apiece, up 2.55 per cent on BSE.


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