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IDBI Bank June qtr loss widens to Rs 2,410 crore

IDBI Bank on Tuesday reported a net loss of Rs 2,410 crore for the June 2018 quarter, wider than the Rs 853-crore loss reported in the same period last year, owing to a 157% year-on-year (y-o-y) jump in provisions.

IDBI Bank June qtr loss widens to Rs 2,410 crore
IDBI Bank June qtr loss widens to Rs 2,410 crore

IDBI Bank on Tuesday reported a net loss of Rs 2,410 crore for the June 2018 quarter, wider than the Rs 853-crore loss reported in the same period last year, owing to a 157% year-on-year (y-o-y) jump in provisions.

The bank also reported its highest ever gross non-performing asset (NPA) ratio at 30.78%, up 283 basis points (bps) sequentially. Provisions stood at Rs 5,236 crore in the June quarter, 157% higher than what it had reported in Q1FY18.

The net NPA ratio rose 207 bps sequentially to 18.76%. The bank chose to avail the regulatory dispensation to spread provisions against mark-to-market (MTM) losses on its investments during the June quarter over four quarters.

In Q1, IDBI Bank saw a reversal of provisions worth Rs 488 crore against MTM losses taken in the December and March quarters of FY18. After setting aside Rs 415 crore as MTM provisions for the June quarter, the net reversal of provisions on the bank’s books stood at Rs 73 crore. It will have to provide another Rs 1,449 crore against MTM losses over the coming three quarters.

During the June quarter, IDBI added provisions worth `1,306 crore against 20 borrower accounts undergoing insolvency proceedings, taking its total provisions against such accounts to `1,670 crore. It holds 74% provisions against 11 accounts on the first list of NCLT cases and 73% against 19 accounts from the second list.

A provision of `11.6 crore was made against the bank’s increased gratuity liabilities and an additional `23 crore for the same purpose will be provided over the rest of FY19.

IDBI Bank’s provision coverage ratio (PCR) improved to 64.45% from 52.42% in June 2017. The bank was profitable on an operating level with pre-provisioning operating profit (PPOP) at `1,081 crore, up 28% y-o-y, partly as a result of 11% fall in interest expenses to `4,121 crore. IDBI also booked `329 crore as interest income arising out of the resolution of Bhushan Steel.

The bank’s net interest income (NII) – the difference between interest earned and interest expended – rose 17% y-o-y to `1,639 crore in Q1FY19. Its net interest margin (NIM) – a key measure of profitability – rose 98 bps sequentially to 2.17% in Q1. IDBI Bank’s gross advances fell 10% y-o-y to `1.88 lakh crore and its total deposits fell 1% y-o-y to `2.4 lakh crore at the end of the June quarter.

The share of current account savings account (CASA) deposits fell 164 bps sequentially to 35.51% at the end of June.

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First published on: 15-08-2018 at 01:06 IST
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