IDBI Bank reports a net profit of Rs 578 crore in Q3

The non-interest income depreciated by 20 per cent YoY to Rs 1,148 crore but it stationed a sequential growth of 17 per cent.

The Indian private sector bank, IDBI Bank has announced a net profit of Rs 578 crore in the third quarter that ended on December 31, 2021, in FY22 which was Rs 378 crores in the same period for Q3 FY21 witnessing a vigorous growth of 53% on a year-on-year basis on the back of robust growth in net interest income (NII) and lower tax expenses. Despite such massive growth, the bank’s shares were down to Rs 49.05 (−1.50) and tanked down by 2.97% today in the closing session.

The net interest margin showed significant improvement. However, loan loss provisions shot up. NII (difference between interest earned and interest expended) climbed 31 per cent y-o-y to ₹2,383 crores (₹1,818 crores). Bank’s Provision Coverage Ratio stood at 97.10% against 97.08% as of December 31, 2020. Bank’s CASA ratio stood at 54.69%, YoY growth of 572 bps.

Net interest margin, an estimate of the profitability of banks, enhanced by 101 basis points (bps) to 3.88 per cent at the end of the December quarter. However, non-interest income depreciated by 20 per cent YoY to Rs 1,148 crore but it stationed a sequential growth of 17 per cent.

Nonetheless, total income sank to Rs 5,772.86 crore during the quarter compared to Rs 6,003.91 crore in the same period of 2020-21, the private sector lender enunciated in a statement. Requirements for bad loans and contingencies were at Rs 801.81 crore for the December quarter, as against Rs 867.97 crores before.

Additionally, the bank has disclosed that it has restructured loans worth Rs 1,941.51 crore by the Reserve Bank of India’s (RBI) Covid resolution framework. Also, the lender has restructured MSME loans worth Rs 789.17 crore under various regulatory schemes.

The Bank was classified as a ‘Private Sector Bank’ for regulatory purposes by the Reserve Bank of India with effect from 21 January 2019 consequent upon Life Insurance Corporation of India gaining 51% of the total paid-up equity share capital of the bank.

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