For the quarter ended March 31, 2017, IDBI Bank reported a loss of Rs 3,199.76 crore and if it was not for a tax writeback of Rs 1620.02 crore the losses would have been higher. The bad performance battered the shares of the bank, which closed 7.77% lower than the previous day’s close.
Gross non-performing assets (NPAs) soared 80% to Rs 44,752.59 crore at the end of the March quarter from Rs 24,875.07 crore a year ago. The bank reported gross NPA of Rs 35,245.33 crore a quarter ago. Provisions jumped 39.54% to Rs 6,209.58 crore from Rs 4,450.15 crore year on year.
The only silver lining is the positive growth both in the net interest income (NII) and the Net Interest margin (NIM). The growth in the NII which is the core income of the bank grew 14.44% to Rs 1,633.29 crore from Rs 1,427.24 crore in the year-ago period. NIM for the full year climbed eight basis points to 1.75 % during the quarter. However, the other income which includes fees or the non-core income of the bank declined 21.17% to Rs 1,061.52.
Rating agency S&P said in a release, “We expect earnings to remain weak over the next 12-18 months, largely because of IDBI’s high credit costs (given its weak asset quality and low reserve coverage) and low net interest margins (NIMs).”
IDBI Bank’s performance has been weak over the past two years with stressed asset quality and high credit costs straining its earnings. Its NPLs spiked to 21.3% as of March 31, 2017, from 15.2% in the previous quarter. The bank reported a loss of Rs 5,070 crore for full fiscal 2017.
