IDFC Bank earnings decline 32% over the quarter

New private sector lender IDFC Bank posted a net profit of Rs 165 crore (down 32 per cent quarter-on-quarter) for the fourth quarter ended March. It had posted net profit of Rs 242.2 crore in the previous quarter.

In its second quarter as a universal bank, IDFC's operating income was Rs 554.5 crore, compared with Rs 604.2 crore in October-December 2015.

However, asset quality deteriorated in the fourth quarter. The bank's gross non-performing assets stood at Rs 3,058 crore (6.2 per cent) at end of March 2016, up from Rs 1,462 crore (3.09 per cent) at the end of December 2015.

The net non-performing assets (NPAs) stood at Rs 1,139 crore (2.39 per cent) as against Rs 453 crore (0.98 per cent) at end of Q3. Total stressed assets are pegged at 15 per cent.

The bank has made provision of 50 per cent (for NPAs) and the effort would be to recover at least amount that has been provided for, said Rajiv Lall, founder, managing director and chief executive officer of the bank.

Total credit grew 15 per cent to Rs 53,580 crore at the end of March, from Rs 46,713 crore at the end of December 2015.

At present, corporate loans consist 95 per cent of total credit while retail loans are just about 5 per cent.

Sunil Kakar, group chief financial officer, said the bank aims to grow the share of retail and SMEs to 20 per cent of the total loans by the end of March 2017. Credit is expected to expand by about 20 per cent in current financial year, he added.

Total deposits stood at Rs 8,219 crore with a small share of low-cost deposits (current accounts and savings accounts) of Rs 445 crore.

The term deposits were Rs 7,774 crore. Net interest margin for Q4 stood at 2.1 per cent.

The bank does not have plans to raise equity capital for two years, Kakar said.