IDBI Bank Q4 net loss widens to Rs3,199.76 crore as bad loans surge

IDBI Bank’s gross non-performing assets (NPAs) soared 80% to Rs44,752.59 crore at the end of the fourth quarter from Rs24,875.07 crore a year ago


IDBI Bank’s net interest income rose 14.44% to Rs1,633.29 crore from Rs1,427.24 crore in the year-ago period. Photo: Mint
IDBI Bank’s net interest income rose 14.44% to Rs1,633.29 crore from Rs1,427.24 crore in the year-ago period. Photo: Mint

IDBI Bank Ltd on Thursday said its loss for the March quarter widened from a year ago as bad loans mounted and provisions soared. This was the second straight quarter the bank reported a loss.

Net loss for the quarter stood at Rs3,199.76 crore against Rs1,735.81 crore a year ago. However, losses were restricted due to a tax write-back of Rs1,620.02 crore in the quarter.

Provisions jumped 40% to Rs6,209.58 crore from Rs4,450.15 crore year-on-year.

Gross non-performing assets (NPAs) soared 80% to Rs44,752.59 crore at the end of the March quarter from Rs24,875.07 crore a year ago. The bank reported gross non-performing asset (NPA) of Rs35,245.33 crore a quarter ago.

As a percentage of total loans, gross NPAs stood at 21.25% at the end of the March quarter compared with 15.16% in the previous quarter and 10.98% in the year-ago quarter.

Net NPAs were at 13.21% compared with 9.61% in the previous quarter and 6.78% in the same quarter last year.

Net interest income, or the core income a bank earns by giving loans, rose 14.4% to Rs1,633.29 crore from Rs1,427.24 crore in the year-ago period.

Other income declined 21.2% to Rs1,061.52 crore from Rs1,346.53 crore in the same period last year.

Deposits rose 1.06% year-on-year to Rs2.69 trillion, while advances declined 11.6% to Rs1.91 trillion.

Shares of IDBI Bank lost 7.77% to close at Rs70 while BSE’s benchmark Sensex shed 0.73% to end at 30,434.79 points.

IDBI’s results were in contrast to those reported by Bank of Baroda (BoB) later in the day.

Bank of Baroda’s reported fiscal fourth quarter profit of Rs154.72 crore from a loss of Rs3,230.14 crore a year ago. Still, it was lower than the Rs478 crore profit estimate of 21 analysts surveyed by Bloomberg.

Bank of Baroda set aside lower provisions as its bad loans situation stabilised. Provisions and contingencies dropped 61.8% from a year ago to Rs2,622.97 crore.

Gross NPAs rose 5.42% to Rs42,718.70 crore at the end of the March quarter.

As a percentage of total loans, gross NPAs stood at 10.46% at the end of the March quarter as compared to 11.4% in the previous quarter and 9.99% in the year ago quarter.

Net NPAs were at 4.72% in the March quarter compared to 5.43% in the previous quarter and 5.06% in the same quarter last year.

Bank of Baroda’s chief executive officer P.S. Jayakumar said the lender was in the process of filing seven cases under the bankruptcy code to recover bad loans. He said he didn’t see the bank’s bad loan numbers rising by more than an additional Rs3,000 crore.

Bank of Baroda’s core banking operation numbers also showed an improvement. Net interest income (NII), or the core income a bank earns by giving loans, increased 7.55% to Rs3,581.86 crore. Non-interest income increased to Rs1,977.28 crore, up 11.4%.

BoB has valued its non-crore assets at Rs6,000 crore and will be selling some of them in the current financial year. It includes partial stake sale in UTI mutual fund where it holds 18.3% stake, said Jayakumar.

Shares of BoB closed at Rs187.75 on BSE—down 2.32% from previous close. Earnings were declared after the markets closed.

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