Interest margins boost IDBI net 12.3% in FY07

An improvement in interest margins helped Industrial Development Bank of India (IDBI) post 12.3 per cent growth in net profit at Rs 630 crore for the financial year ended March 2007 as against Rs 561 crore a year ago.

The total income for the reporting year rose to Rs 7,373 crore from Rs 6,661 crore. The interest income moved up 17.9 per cent to Rs 6,346 crore over Rs 5,381 crore a year ago.

The net interest margin improved from 0.49 per cent at the end of March 2006 to 0.80 per cent at the end of March 2007, its Chairman and Managing Director V P Shetty said.

The net profit for the fourth quarter ended March 2007 rose to Rs 213 crore from Rs 201 crore in the year-ago period. The total income grew to 2,185 crore from Rs 1,944 crore.

A revision in the prime lending rate (PLR) on more than two occasions and better pricing of credit (read ability to raise rates for those borrowing at sub-PLR) contributed to better interest income, Chief Finance Officer L P Agarwal said.

The advances rose by 18.4 per cent to Rs 62,471 crore. The home loan portfolio grew by 16.2 per cent to Rs 8,571.05 crore and expects to add loans worth Rs 5,000 crore in 2007-08. The aggregate assets base also rose by 17.3 per cent to Rs 1,03,839 crore as of March 2007. Its deposits rose by 66.7 per cent to 43,353 crore.

The public sector bank's net worth grew to Rs 8,426 crore from Rs 6,372 crore. The revaluation of assets, including properties, added Rs 2,000 crore, helping strengthen the capital adequacy ratio (CAR).

The CAR stood at 13.73 per cent as of March 2007 (14.80 per cent a year ago). The net NPAs moved up 1.1 per cent from 1 per cent last year due to the merger of United Western Bank with IDBI.

IDBI, a Mumbai-based bank, will float a $1.5 billion medium-term note (MTN) programme in 2007-08 for funding international banking business. It also plans to open two offshore banking units (OBUs), one in Singapore and another in Bahrain.