Corporate Apr 26, 2013
Mumbai: Public sector lender IDBI Bank today reported 28.15 percent drop in net profit to Rs 554.45 crore for the January-March quarter on account of over two-fold rise in provisions.
The net profit of the bank stood at Rs 771 crore in the corresponding period of the 2011-12 fiscal. For the entire 2012-13, the bank's net profit dropped by 7.36 percent to Rs 1,882 crore, as against Rs 2,032 crore reported in FY12, the bank release said. During the fourth quarter, the total income of the bank rose by 9.87 per cent to Rs 7,544 crore, as against Rs 6,866 crore reported in the corresponding period of FY12.
Provisions during Q4 more than doubled to Rs 1,040 crore from Rs 433 crore reported in the same period of 2011-12. "Due to higher requirement of provision coverage as per regulation, provisions have increased. However, we feel that things will be better on NPA and restructuring fronts in the current fiscal as they have bottomed out," Executive Director of IDBI Bank, R K Bansal told PTI.
As per the bank, the net slippages in the fourth quarter stood at Rs 400 crore. While net interest income (NII) grew 18.92 percent to Rs 1,440 crore during January-March period, non-interest income increased by 45.7 percent to Rs 1,147 crore during this period. Net interest margin of the bank stood at 2.19 per cent in the fourth quarter as compared to 2.07 per cent reported a year ago.
The growth in deposits and credit reported by the bank was way below industry average. Deposits grew a paltry 7.90 per cent to Rs 2.27 lakh crore by the end of March quarter while the advances rose by 8.71 per cent to Rs 1.96 lakh crore during this period. However, the bank argued that it consciously settled for a below-par growth. "The growth in credit was subdued as we didn't want to grow our loan book fast as that would have increased our priority sector lending (PSL) targets. So, it was intentional to keep it subdued. Going ahead, our priority is to meet the PSL target with growth in loan book," Bansal said.
Its asset quality also deteriorated, with the gross non-performing asset ratio (gross NPA) going up to 3.22 percent from 2.49 percent year earlier. However, net NPA improved marginally to 1.58 per cent from 1.61 per cent reported earlier. The capital adequacy ratio of the public sector lender stood at 13.13 per cent by the end of March quarter.
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