Heavy investments in information technology and high provisioning pulled down IDBI Bank's net profit for the fourth quarter of fiscal 2001 (January-March) by 62.49 per cent to Rs 10.15 crore from Rs 27.06 crore posted during the previous year. Profit for the entire year dropped by 69 per cent to Rs 19 crore from Rs 61 crore recorded during the previous year.
IDBI Bank chairman M S Verma said: "There are two types of provisionings -- prescriptive and judgemental. We have followed a mix of both and have provided Rs 44.96 crore this year including Rs 15 crore as write-offs." NPAs of the bank have risen 3.04 per cent from 1.28 per cent in the last year.
Managing director Gunit Chadha added: "We have invested heavily in technology and people. The non-people and non-technology investments as percentage of total operating expenses of the bank have increased to 44 per cent from 33 per cent during the previous year. It is expected to go up to 50 per cent this year."
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The bank's investments in technical expenditure for the year ended March 2001 doubled to Rs 35 crore from Rs 19 crore the previous year. It is expected to increase to Rs 55 crore the next year.
Total income of the bank for the year increased by 27.09 per cent to Rs 608.68 crore (Rs 478.92 crore). Interest income of the bank increased by 26.98 per cent to Rs 539.10 crore (Rs 423.78 crore) while other income of the bank increased by 26.18 per cent to Rs 69.58 crore (Rs 55.14 crore). Advances of the bank increased by 13 per cent to Rs 3,136 crore from Rs 2,772 crore. Deposits increased marginally to Rs 3,567 crore.
Chadha said: "We are focussing more on retail deposits than bulk deposits. Saving deposits increased by 89 per cent to Rs 326.7 crore. We are focussing more on the top tier of the corporates. We will be bundling more products to the small and mid-size companies and will also focus more on the fee-based income from the corporates."
On the reduction of IDBI stake in the bank Verma said: "The bank has four options available: bringing in a startegic partner, bringing in startegic investment, accessing the capital markets and going in for a rights issue. Our accessing the markets will depend on the shape of the markets."
"We will go in for a merger or an acquisition only if we find it is a very startegic fit," said Verma.