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Public sector lender IDBI Bank’s net profit for the second quarter ended September 30 fell by 38 per cent to Rs 118 crore, as large contributions to Rural Infrastructure Development Fund (RIDF) dragged earnings.
It had posted net profit of Rs 192 crore in July-September 2013. Its stock closed 3.3 per cent higher at Rs 70 on the BSE.
The profitability for the current quarter has been largely affected by higher contributions to RIDF and other priority sector deposits, bank said in a statement.
These deposits like RIDF give returns as low as five per cent. Its net interest income (NII) declined by five per cent to Rs 1,406 crore in the reporting quarter. The net interest margin (NIM) also fell to 1.93 per cent from 2.17 per cent.
The advances grew by six per cent (year-on-year) to Rs 1, 95,057 crore at end of September. The year-on-year credit growth for FY15 (March 2015) is expected to be about 10 per cent, P Sitaraman, its chief financial officer, said.
The deposits grew by 18 per cent to Rs 2,38,006 crore and the share low cost deposit base – current and savings account – improved slightly to 22.03 per cent from 21.97 per cent a year ago.
Its gross non-performing assets (NPAs) grew to 5.7 per cent at end of September 2014 from 4.98 per cent a year ago. The net NPAs declined to 2.79 per cent from 2.82 per cent. The provision coverage ratio improved to 53.6 per cent from 45.98 per cent.
Its capital adequacy ratio stood at (as per Basel III) 11.71 per cent as of September 30. Mumbai-based lender raised Rs 2,500 crore through Basel III compliant Additional Tier – I bonds in October 2014. The amount mobilised would be counted as a part of Tier I capital and the capital adequacy of would be 12.62 per cent.
