IDBI | Business Upturn

IDBI Bank Q1 Results: Net profit rises 62% to Rs. 1,224 crore, NII up by 61% YoY

Adesh Dixit — Mon, 24 Jul 2023 10:26:34 +0000

On July 24, IDBI Bank announced a 62 percent increase in net profit for the April-June FY24 quarter, coming in at Rs 1,224 crore. In the same quarter last year, the private-sector lender earned a net profit of Rs. 756 crore.

The bank’s Net Interest Income (NII) increased by 61 percent year over year (YoY) to reach Rs 3998 crore from Rs 2448 crore.

In comparison to Q1-2023, the lender’s net interest margin (NIM) increased by 178 basis points to 5.8 percent.

From 20% the previous year, the bank’s gross non-performing asset (GNPA) decreased to 5%. Additionally, the bank’s net non-performing assets (NNPA) decreased from 1.26 percent to 0.44 percent.

As of June 30, 2023, the current account and savings account (CASA) climbed to Rs 1.28 lakh crore, and the CASA ratio was 52.61 percent.

As of June 30, 2023, the lender’s net advances totaled Rs 1.65 lakh crore, up from Rs 1.38 lakh cr as of June 30, 2022, a 20 percent YoY increase.

Revenue for the lender’s corporate and wholesale division increased to Rs 2696 crore from Rs 1264 crore in the same period last year.

The bank’s primary source of income, retail banking, increased to Rs 7106 crore from Rs 5656 crore the previous year.

The bank’s Treasury division reported revenue of Rs 3280 crore, up from Rs 2428 crore the previous year.

The bank’s shares was up 2.19 percent from the previous closing at Rs 58.70 as of 2:47 p.m. on the NSE.

7 firms in race for the IDBI Bank’s strategic sale

Vandana Nampoothiri — Mon, 09 Aug 2021 10:31:32 +0000

Department of Investment and Public Asset Management (DIPAM) has short-listed seven international firms including JM Financial, Ernst and Young, Deloitte, and KPMG as transaction advisers for the government’s stake sale in IDBI Bank, PTI reported.

As per a notice by DIPAM, these firms should make a virtual presentation before the DIPAM, which is handling the sale process, on August 10. After the presentation, one firm will be selected as the transaction advisor.

The government has a shareholding of 45.48%, while LIC India holds 49.24%. According to PTI, in June, the government started inviting bids from reputed professional consulting firms/investment, bankers/merchant bankers to assist DIPAM in the process of strategic disinvestment of IDBI Bank Ltd. along with transfer of management control, till completion of the transaction.

DIPAM has barred public sector banks from bidding. Subsidiaries of IDBI Bank – IDBI Capital Markets – cannot participate as bidders either for transaction advisors, The Economic Times reported.

In February, while presenting the Union Budget 2021-22, Union Finance Minister Nirmala Sitharaman had said that the process of privatization of IDBI Bank would be completed in the current fiscal. The government aims to mop up Rs 1.75 lakh crore in the current fiscal from minority stake sale and privatization, PTI reported.

So far in the current fiscal, the government has mobilized Rs 7,648 crore as disinvestment receipts.

IDBI divestment: 100% stake owned by GOI and LIC are approved for sale

Vaibhav Agrawal — Fri, 09 Jul 2021 16:50:37 +0000

Including that of the Life Insurance Corporation of India (LIC), in IDBI, the government has approved the sale of its entire stake, as per a report released by Moneycontrol.

Along with a transfer of management, to offload 100% of their entire stakes in IDBI bank, a go-ahead to the government and the LIC has been given by the Cabinet Committee of Economic Affairs (CCEA), as said by the Department of Investment and Public Asset Management (DIPAM) on 9th July.

With the government’s shareholding at 45.5% along with the non-promoter shareholding at 5.29% and LIC’s shareholding at 49.24%, the Reserve Bank of India has classified IDBI bank as a private sector bank, at present.

Based on several factors, the exact quantum of stake to be sold shall be decided as mentioned by the Department of Investment and Public Asset Management (DIPAM).

There shall be only one transaction advisor since LIC’s stake shall be sold alongside the government’s shareholding in the mentioned transaction, as further clarified by the department.

The bids by financial institutions, interested investment banks along with consulting firms, and law firms should be submitted by 13th July as said by the Department of Investment and Public Asset Management in the RFPs issued.

The board quantum of primary infusion expected in the bank along with the timeframe for such an infusion has not yet been decided, as mentioned by DIPAM while responding to the queries raised by the bidders on the RFP.

RBI turns down Muthoot Finance’s proposal to acquire IDBI MF

Shalmali Bhagwat — Tue, 24 Nov 2020 13:45:45 +0000

Reserve bank of India refused to pass approval to Muthoot Finance’s proposed acquisition of IDBI Mutual Fund. Muthoot Finance Limited’s request for no objection certificate was declined on the basis that, ”the activity of sponsoring a Mutual Fund or owning an Asset Management Company is not in consonance with the activity of an operating NBFC”, the company said in a stock exchange filing.

Muthoot Finance, the country’s largest gold financing company, on Friday had announced its entry into an agreement to acquire IDBI Bank’s mutual fund unit, marking its entry into mutual fund asset management space. Muthoot Finance, in an exchange filing, on Friday reported that it has agreed to buy IDBI Asset Management Ltd and IDBI MF Trustee Company or a total consideration of Rs 215 crore. The company said the transaction is expected to be delivered by end of February 2020, subjected to requisite approval from the regulators including Securities and Exchange Board of India.

IDBI Asset Management also addressed as IDBI Mutual Fund, controlled 22 schemes during FY20, including 12 equity fund schemes, six debt fund schemes, two-hybrid fund schemes and one each Gold Fund of Funds and Gold Exchange Traded Funds scheme. Promoted by IDBI Bank, IDBI Mutual Fund is one of the profit-making asset management company in the mutual fund space with assets under management (AUM) of over Rs 5,300 crore. As on March 31, 2019, IDBI Bank owned 66.67 per cent stake in IDBI Asset Management and 33.33 per cent holding in IDBI Capital Markets and Securities.

In May this year, IDBI Bank invited expression of interest for its mutual fund business to reduce the huge heap of bad loans as the lender has the worst asset quality among Indian banks. On Monday, the global rating agency, Moody’s Investor Service said Muthoot Finance’s main service offered, gold loans shall aid in boosting its asset quality, specifying that it does not foresee a drop in gold prices and the greatest risks while lending against gold, to occur. Muthoot also boasts of a grand profit which will help maintain capitalisation and funding at the current strong level, the rating agency further added.