Mumbai: Public sector lender IDBI Bank Ltd said on Tuesday it posted a 58% rise in net profit in the October-December quarter to Rs450 crore, while net interest income (NII) surged.
Its NII rose 68% to Rs1,204 crore, while net interest margin increased to 2.28% during the quarter from 1.59% a year ago, it said in a press release.
Mid-cap Indian banks have reported strong profits for the December quarter so far, riding on robust loan growth and increased corporate activity, but rising interest rates could weigh on margins going forward.
On Tuesday, the Reserve Bank of India raised interest rates by a quarter of a percentage point to clamp down on resurgent inflation, while concerns loomed at large about more hikes, going forward.
IDBI’s deposits grew 5% to Rs1.5 trillion, while advances grew 21% to Rs1.34 trillion as at end-December, it added.
India’s top lender State Bank of India, which posted better- than-expected quarterly profit, forecast 20-22% loan growth in fiscal 2012 as demand for credit remains strong in Asia’s third largest economy.
Similarly, several other banks have also forecast a more than 20% growth in advances.
IDBI’s net non-performing assets were at 1.2%, while provision coverage, including technical write-offs, was 75.6%, against the norm of 70%, it added.
Shares in the firm ended down 0.59% on Tuesday at Rs151.8 in a weak Mumbai market.