State-run IDBI Bank's losses widened to Rs 3,602 crore in the quarter ended September on account of higher provisioning for bad loans and lower interest income.
The bank had reported a net loss of Rs 198 crore in the year-ago quarter.
Explaining the losses, it's newly appointed managing director and CEO, Rakesh Sharma, said, "Nearly, 30 per cent of our assets are non-performing loans and as a result interest income is under stress. In the quarter, the bank had to make higher provisioning for NPAs."
The bank availed the benefit of spreading mark-to-market (MTM) losses and provided Rs 626.36 crore as of September 30, 2018.
Net interest income (NII) declined 22 per cent to Rs 1,301 crore in the quarter against Rs 1,657 crore.
Provisioning for NPAs rose to Rs 5,482 crore in the September quarter as against Rs 2,842 crore.
Net interest margins dropped to 1.80 per cent from 2.17 per cent.
Gross NPAs declined to 31.78 per cent from 24.98 per cent, while net NPAs stood at 17.30 per cent as against 16.06 per cent.
Sharma said 46 per cent of the bank's NPAs are from the RBI's NCLT list 1 and 2.
The bank expects a recovery from bad loans worth Rs 7,500 crore over the next two quarters, including Rs 4,500 crore from the NCLT cases.
Fresh slippages in the quarter stood at Rs 3,489 crore from Rs 3,381 crore. In the first quarter, slippages stood at 7,799 crore.
"Our slippages are under control and we expect them to decline further," Sharma said.
Its domestic advances declined 5 per cent to Rs 1.76 lakh crore as of September 30, 2018.
"We are in the process of consolidation and our major focus is to realign the business portfolio. We are working towards retail liabilities and Casa deposits," he said.
State life insurer, Life Insurance Corporation (LIC) is in the process of increasing its stake in the bank to 51 per cent.
In the September quarter, the bank received Rs 2,098.19 crore. LIC's stake in the bank at present stands at 14.9 per cent and the government owns 79.5 per cent.
The bank is now awaiting regulatory approval from Competition Commission of India (CCI) and market regulator, Sebi, for the deal.
Sharma said once all the regulatory approval is in place, the bank will get fund infusion worth Rs 20,000 crore from LIC.
He expects the bank to come out of RBI's prompt corrective action (PCA) by second quarter of FY20.
The bank's scrip ended one per cent up at Rs 60.50 on the BSE, which closed 0.01 per cent down at 35,141.99.
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