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HomegooglenewsIDBI Bank Q4 Results: Profit after tax jumps 35% on lower provisions

IDBI Bank Q4 Results: Profit after tax jumps 35% on lower provisions

IDBI Bank on Monday reported a 35 per cent jump in profit after tax at Rs 691 crore for the quarter ended March on the back of lower provisioning, improvement in asset quality and better recoveries.

The lender had posted a profit after tax (PAT) of Rs 512 crore in the year-ago period.

For the full year ended March 31, 2022, the lender logged a PAT of Rs 2,439 crore, a jump of 79 per cent from Rs 1,359 crore in fiscal 2021.

“The turnaround (of the bank) has really happened. The balance sheet has started growing after a gap of almost four years. Now we are looking forward to improving the financials further.

“We are looking at a Return on Assets (ROAs) of more than 1 per cent and a growth of 10-12 per cent in advances (in FY23),” the bank’s Managing Director and CEO Rakesh Sharma told reporters.

Its net interest income (NII) declined by 25 per cent to Rs 2,420 crore in the fourth quarter, as against Rs 3,240 crore in the same period of last year.

Excluding an interest income of Rs 1,313 crore on income tax refund for Q4 FY21, NII for Q4 FY22 increased by 26 per cent.

“Almost for four years, we were under prompt corrective action (PCA) and the balance sheet was de-growing. Our growth mainly started in H2 of FY22. That is why there is a decline in the interest income despite the fact that we have been able to show business improvement by 7 per cent.

“Throughout this year, we will be getting the benefit of the increased business and we are quite hopeful that income will improve,” Sharma added.

Net interest margin (NIM) declined to 3.97 per cent from 5.14 per cent.

Gross NPA ratio improved to 19.14 per cent as against 22.37 per cent. Net NPAs stood at 1.27 per cent as against 1.97 per cent.

“This time we had good recoveries. As against our target of Rs 4,000 crore, we had recoveries of Rs 5,000 crore. My target is that the bank’s gross NPA ratio will be less than 14 per cent by March 2023 and by March 2024 it should be less than 10 per cent,” he said.

Sharma said the bank’s GNPA could not come down in the quarter as it did not write-off bad loans due to tax reasons and also as transfer of NPAs to National Asset Reconstruction Company Ltd (NARCL) could not happen.

“We were expecting NARCL to start taking over loans from January but somehow it could not happen by March. In a new kind of organisation, a two-three months delay is quite normal. I am sure during the current year, first or the second quarter, NARCL will start taking over loans,” he said.

Fresh slippages were at around Rs 763 crore. Its slippage ratio was at 3.34 per cent in FY22 and it is targeting to bring it down to 2.5 per cent in FY23.

Total provisions dropped to Rs 823 crore as against Rs 2,304 crore in the year-ago quarter.

Provision coverage ratio (including technical write-offs) improved to 97.63 per cent from 96.90 per cent.

Capital to Risk (Weighted) Assets Ratio (CRAR) improved to 19.06 per cent from 15.59 per cent.

Gross advances grew by 10.07 per cent to Rs 1,78,207 crore as on March 31, 2022.

The bank’s scrip ended at Rs 45.50 apiece, up 0.33 per cent on BSE. PTI HV ABM ABM

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