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IDBI Bank Q2 net up 20% on lower provisions; NII dips 10.5%
IDBI Bank Q2 net up 20% on lower provisions; NII dips 10.5%
Net profit of the youngest state-run bank stood at Rs 429.10 crore in the same period last year. Total income rose 24.10 per cent to Rs 6,291.42 crore in the July-September quarter of this fiscal.
Mumbai,
Maharashtra,
India
(prbd.net)
21/10/2011
IDBI Bank today said it has posted a 20 per cent rise in net income at Rs 516 crore in the second quarter ended September 30 on the back of lower provisioning, which offset a 10.5 per cent fall in net interest income (NII).
Net profit of the youngest state-run bank stood at Rs 429.10 crore in the same period last year. Total income rose 24.10 per cent to Rs 6,291.42 crore in the July-September quarter of this fiscal.
"Under the present economic environment, we posted reasonably sound growth in the second quarter. We hope that we will be able to maintain this performance in the rest of this fiscal," IDBI Bank Executive Director Raj Kumar Bansal said.
Advances grew 20 per cent to Rs 1, 55,917 crore, while deposits rose 13 per cent to Rs 1, 74,441 crore in the period under review. However, the lender saw a rise in gross and net NPA level during the period.
The bank had made additional provisioning in the last quarter to meet the mandated 70 per cent provision coverage ratio by September. This has helped the bank in the reporting quarter to save on this, though it’s both net and gross NPAs rose, as higher interest kept rising.
While gross NPA rose to 2.47 per cent from 1.88 per cent, net NPA shot up to 1.57 from 1.19 per cent in Q2.
But Bansal played down this saying, "some kind of pressure has been witnessed in small corporate segment. However, we think NPAs will not rise in rest of the fiscal."
The bank, which is trying to ramp up its Casa (current account, savings account) base, is hopeful of attaining 25 per cent Casa portfolio in the future.
During the July-September quarter, the bank has posted a net interest margin of just above 2 per cent, while its net interest income declined 10.46 per cent to Rs 479 crore against Rs 596 crore reported in the same period last year.
However, on the positive side, the net provision declined to Rs 491 crore from Rs 596 crore.
Talking about pressure on margins, Bansal said, “Pressure on margin is felt by the entire banking sector due to the rising interest rate regime. However, we will able to maintain our NIM over 2 per cent for the full fiscal." The capital adequacy ratio of the lender stood at 13.34 per cent at the end of September.
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