 "IDBI Bank Q1 results: Net profit up 40% on sharp dip in provision, taxes")
Private sector lender IDBI Bank posted a 40 per cent year-on-year (YoY) growth in its net profit at Rs 1,719 crore for the first quarter ended June 2024 (Q1 FY25) due to a sharp dip in provisions and taxes. The bank had posted a net profit of Rs 1,224 crore in the same quarter of FY24 (Q1 FY24).
The provisions and taxes were down 80 per cent YoY to Rs 356 crore in Q1 FY25 from Rs 1,795 crore in Q1 FY24, the bank said in a statement.
Its stock closed 0.77 per cent up at Rs 89.56 per share on BSE.
Net interest income (NII) declined 19 per cent YoY to Rs 3,233 crore in Q1 FY25, compared to Rs 3,998 crore in the same quarter a year ago. The first quarter of FY24 had one major interest recovery from non-performing assets (NPAs) to the tune of Rs 1,000 crore, IDBI Bank said in a statement.
Its net interest margin (NIM) also declined to 4.18 per cent in Q1 FY25, compared to 5.8 per cent in Q1 FY24.
Rakesh Sharma, managing director and chief executive of IDBI Bank, told Business Standard that the decline in NIM in Q1 FY25 is to be seen in the backdrop of a one-time rise in Q1 FY24 due to large recovery. “Now the NIM is expected to be between 3.75 – 4.0 per cent in FY25,” he said.
Non-interest income declined to Rs 805.25 crore in Q1 FY25 from Rs 851.96 crore in Q1 FY24.
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Advances expanded 17 per cent YoY to Rs 1.94 trillion in Q1 FY25. The share of retail and corporate in the loan book was 29 per cent and 71 per cent, respectively, at the end of June 2024.
Total deposits increased 13 per cent YoY to Rs 2.77 trillion at the end of June 2024. The share of low-cost deposits — current account and savings accounts (CASA) — declined to 48.57 per cent at the end of June 2024, from 52.61 per cent a year ago.
The bank expects to grow the loan book by about 12 per cent and deposits by around 10 per cent in FY25, Sharma added.
The lender, which is a candidate for divestment by the Government of India, saw a further improvement in the asset quality profile in the reporting quarter. Its gross non-performing assets (NPAs) declined to 3.87 per cent in June 2024 from 5.05 per cent in June 2023. Net NPAs also declined to 0.23 per cent in June 2024 from 0.44 per cent a year ago.
The provision coverage ratio (PCR) including written-off accounts stood at 99.34 per cent in June 2023 as against 98.99 per cent a year ago.
Capital adequacy stood at 20.42 per cent with Tier I of 20.26 per cent at the end of June 2024.