IDBI Bank Q1 net profit rises 78% to Rs241.10 crore on tax write-back
IDBI Bank Ltd on Thursday said net profit in the June quarter rose 78.35% from a year ago, thanks to a large tax write-back during the quarter. Net profit was Rs.241.10 crore, up from Rs.135.18 crore a year earlier.
According to a Bloomberg poll of three analysts, the bank was expected to post a net loss of Rs.750.70 crore. During the quarter, the bank took a tax write-back of Rs.1,206.51 crore, as against tax expenses of Rs.124.27 crore a year ago.
Excluding this tax write-back, the bank would have reported a net loss.
Net interest income (NII), the core income a bank earns by giving loans, rose 14.2% to Rs.1,706.50 crore in the June quarter from Rs.1,494.33 crore last year. Other income increased 42.69% to Rs.916.22 crore from Rs.642.09 crore in the same period last year.
In December, the Reserve Bank of India (RBI) conducted an asset quality review across the banking sector, following which the banks were asked to recognize visibly stressed assets as non-performing assets (NPAs). RBI also asked banks to make adequate provisions for the stressed assets. This has hit the profitability of some banks.
Gross NPAs at IDBI Bank rose 9.65% to Rs.27,275.15 crore at the end of the June quarter from Rs.24,875.07 crore in the March quarter. On a year-on-year basis, gross NPAs jumped 93.3% from Rs.14,112.18 crore.
As a percentage of total loans, the gross NPA ratio stood at 11.92% at the end of the June quarter as compared to 10.98% in the previous quarter and 6.64% in the year-ago quarter.
Provisions and contingencies fell 45.34% to Rs.2,432.24 crore in the quarter from Rs.4,450.15 crore a quarter ago. On year-on-year basis, provisions jumped 176.8% from Rs.878.70 crore.
Net NPAs were at 7.47% in the June quarter, compared to 6.78% in the previous quarter and 3.18% in the same quarter last year.
The bank’s total deposits at the end of the first quarter stood at Rs.2.54 trillion, up 5.26% from Rs.2.41 trillion in the same quarter last year. Advances rose to Rs.2.17 trillion, up 6.4%.
On Thursday, IDBI Bank shares closed at Rs.68.35 on BSE, up 2.40%, while the benchmark Sensex rose 0.31% to close at 27,859.60 points.