IDBI Bank Q1 Results: Reports Rs.144 crore net profits

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The IDBI Bank on Tuesday 28 July 2020 has reported its Net Profit to be Rs.144 crore in its Quarter one of the Financial Year 2021 as against Rs.3800 crore loss in the same quarter last year. The bank has posted a net Profit of Rs.135.39 crore in the fourth quarter ended March 2020.  

The Private Sector Lender Bank IDBI has posted a Profit before Tax (PBT) of Rs.437.97 crores for the quarter ended June 2020(Q1FY21) on a rise in Net Interest Income and a dip in provisions and contigencies. The Bank’s asset Quality Improved marginally during the period while the lender is facing the likelihood of rise in defaults amid the corona virus outbreak. The Bank’s asset quality improved with gross non-performing assets (NPA’s) falling to 26.81 percent of the gross advances as at June 30 from 29.12 percent by June 2019. Net NPA’s or Bad Loans came down to 3.55 percent from 8.02 percent. 

The Bank’s stock closed 3.66 percent higher at Rs.38.25 per share on the BSE (Bombay Stock Exchange). The IDBI Bank is under Reserve Bank of India’s Prompt Corrective Action (PCA) Regime due to weak financial and asset quality profile. PCA puts certain Restrictions and limitations for the banks on taking Large Corporate Exposures. The Bank will approach RBI to update its performance and to make a plea for taking it out from the PCA.  

IDBI Bank’s Net Interest Income grew by 22 percent year-on-year from Rs.1773 crores in Q1FY20 to Rs.1458 crore in Q1FY21. The Net Interest Margin also improved to 2.81 percent in Q1FY21 from 2.13 percent in Q1FY20, and from 2.61 percent in the immediately preceding quarter(Q4FY20). 

 The other income comprising fees and commissions rose from Rs. 832.83 crore in Q1FY20 to Rs. 1003.60 crores in Q1FY21. The bank made further covid-19 related provisions of Rs.189 crore in Q1FY21 to cushion the balance sheet from the impact of the pandemic. The Loans under Morotorium are at standstill on repayment under covid-19 regulatory steps. The Bank has made recoveries worth Rs.520 crores in Q1 and going forward ,bank in looking to make recoveries of Rs.1000 crore in each Quarter. 

The Capital Adequancy Ratio (CAR) stood at 13.37 percent as on June 30,2020 with tier 1 at 10.59 percent. Bank is seeking shareholders approval to raise equity capital of Rs.11,000 crores to strengthen Capital adequancy. 

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