IDBI Bank Q3 net profit jumps 57%


IDBI Bank on Saturday reported a 57 per cent growth in net profit to Rs 1,458 crore in the third quarter ended December 31, on lower provisioning and better interest income.

The LIC-controlled bank had a net profit of Rs 927 crore in the October-December quarter of 2022.

The bank's interest income improved during the third quarter of the current fiscal to Rs 6,541 crore, as against Rs 5,231 crore in the same period last fiscal.

The gross non-performing asset (NPA) ratio improved to 4.69 per cent as on December 31, 2023, as against 13.82 per cent as on December 31, 2022

Similarly, the net NPA also declined to 0.34 per cent, as compared to 1.08 per cent at the end of December 2022.

As a result provisioning and contingencies came down to Rs 320 crore in the December quarter, from Rs 784 crore in the same quarter of the last fiscal.

Provision Coverage Ratio (including Technical Write-Offs) stood at 99.17 per cent as on December 31, 2023.

During the quarter Capital Adequacy Ratio of the bank improved to 20.32 per cent, as compared to 20.14 per cent at the end of December 2022.

The bank has not raised capital during the December quarter and the earlier funds have been fully utilised, it said.

The government, which owns over 45 per cent stake in IDBI Bank, plans to sell its stake in the bank and the process could gather pace next financial year.

Meanwhile, life insurance behemoth LIC, which has a 49.24 per cent shareholding, is keen to hold strategic stake in the bank so that it can enjoy the benefit of bancassurance channel.
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IDBI Bank Q1 Results: Net profit up 62%, asset quality improves


LIC-promoted IDBI Bank on Monday reported a 62 per cent rise in net profit to Rs 1,224 crore in the June quarter due to a decline in bad loans. The bank had posted a net profit of Rs 756 crore in the year-ago period. Total income in the first quarter of the current fiscal rose to Rs 7,712 crore, from Rs 5,774 crore in the same period a year ago, IDBI Bank said in a regulatory filing.


Interest earned by the bank improved to Rs 6,860 crore over Rs 4,634 crore in June 2022. Net interest income (NII) increased by 61 per cent to Rs 3,998 crore from Rs 2,488 crore in the same quarter a year ago.


Net Interest Margin (NIM) improved by 178 bps to 5.80 per cent for Q1-2024 as compared to 4.02 per cent for Q1-2023, it said. The bank’s asset quality showed improvement as gross non-performing assets (NPAs) declined to 5.05 per cent of gross advances at the end of the June quarter, from 19.90 per cent a year ago.


Similarly, net NPAs or bad loans declined to 0.44 per cent, as against 1.26 per cent in the year-ago period. Provision coverage ratio also improved to 98.99 per cent as against 97.78 per cent as on June 30, 2022, it said.


Capital Adequacy Ratio of the bank increased to 20.33 per cent, as compared to 19.57 per cent at the end of June 2022.


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IDBI Bank Q4 results: Net profit rises 64%

Private sector


lender IDBI Bank’s net profit for the March 2023 quarter rose by 64 per cent year-on-year (Y-o-Y) to Rs 1,133 crore on the back of improved net interest margins. The lender recorded an all-time high of net profit of Rs 3,645 crore, which is 49 per cent more than Rs 2,439 crore for FY22. In its regulatory filing, the bank said the profit sequentially increased by 22.2 per cent from Rs 927 crore in December 2022 (Q3FY23). For FY23, the net profit.


Besides, its Net interest income (NII) increased by 35 per cent to Rs 3,280 crore in Q4FY23, as against Rs 2,420 crore in the same quarter last year. Sequentially, NII is up by 12 per cent from Rs 2,925 crore registered in December quarter of FY23.


Net interest margins improved to 5.01 per cent for Q4 FY23 as compared to 3.97 per cent for Q4FY22, and sequentially, 4.59 per cent in Q3 FY23.


IDBI Bank’s board of directors declared a dividend of 10 per cent (Rs one) per share of Rs 10 each for the financial year ended March 2023 (FY23), subject to shareholder’s approval, the bank said in a filing with BSE. It has proposed a dividend after eight years, the bank officials said.  


The bank reported that its provisions steeply rose up to Rs 1,292 crore in the March quarter as compared to Rs 823 crore in Q4 FY22 and Rs 1,124 crore in the December quarter of FY23. Provision Coverage ratio expanded to 97.94 per cent in the quarter under review.


In term of bad loans, the bank said its gross NPA dipped drastically to 6.38 per cent in Q4 FY23 compared to 20.16 per cent in Q4 FY22. Net NPA was below the 1 per cent, to 0.92 per cent in the March 2023 quarter as compared to 1.36 per cent in Q4 of FY22.


Earlier this month it was reported that the Reserve Bank of India (RBI) has been looking into at least five potential bidders keen on picking up a majority stake in IDBI Bank Ltd. Kotak Mahindra Bank, Prem Watsa-backed CSB Bank and Emirates NBD are some of the names that have submitted expressions of interest, two sources said.


The divestment of IDBI Bank is the first major divestment exercise across state-owned banks as part of Centre’s broader privatisation plan and could fetch it $3.66 billion at the current market valuation. The Union government and LIC together own 94.71 per cent stake in the bank. The government owns 45.48 per cent of IDBI Bank and is planning to divest a 30.48 per cent stake in the bank.


Whereas insurance major Life Insurance Corp of India (LIC) plans to see a 30.24 per cent of its stake from its holding of 49.24 per cent in the bank.


Expressions of interest - the first step in the stake sale process - closed in January, the report said.


The potential bidders have since begun due diligence on the bank, sources said, who added financial bids were likely to be placed later this year.


The RBI is also carrying out a "fit and proper evaluation", including extensive background and financial checks on the potential buyers, a crucial step before an investor is allowed to pick up a stake in a local bank.


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IDBI Bank Q1 Results: Profit rises 25%


 IDBI Bank on Thursday reported a 25 per cent jump in standalone net profit at Rs 756 crore in the June quarter, helped by a decline in bad loans. The LIC-controlled private sector bank had posted a net profit of Rs 603.30 crore in April-June 2021-22.

However, the total income declined to Rs 5,780.99 crore in the first quarter of the current fiscal from Rs 6,554.95 crore in the year-ago period.

The bank's asset quality improved with gross Non-Performing Assets (NPAs) falling to 19.90 per cent of the gross advances as of June 2022 from 22.71 per cent as of June 2021, according to a regulatory filing.

Net NPAs too came down to 1.25 per cent from 1.67 per cent at the end of the first quarter of the last fiscal.

The bank's provisions for bad loans and contingencies stood at Rs 1,751.80 crore in the June quarter, up substantially from Rs 888.05 crore in the year-ago period.

As a result, provisions (other than tax) and contingencies declined significantly to Rs 959.23 crore from Rs 1,844.07 crore a year ago.

Provision Coverage Ratio (including Technical Write-Offs) improved to 97.79 per cent as on June 30, 2022 as against 94.42 per cent last year.

However, the Net Interest Income (NII) declined to Rs 2,488 crore during the period under review. The same stood at Rs 2,506 crore in the preceding year.

During the same time, Net Interest Margin (NIM) declined to 4.02 per cent as compared to 4.06 per cent in the previous fiscal.

Capital adequacy ratio improved to 19.57 per cent in the June quarter, which was 16.23 per cent in the corresponding quarter last year.

During the quarter, the bank has sold entire stake 19.18 per cent in Asset Reconstruction Company (India) Ltd to Avenue India Resurgence Pvt Ltd for sale consideration of Rs 2,361.48 crore, resulting in profit of Rs 2,140.66 crore.

At the same time, the bank has entered into Share Purchase Agreement with Ageas Insurance International NV (Ageas) on May 19, 2022 to sell IDBI's entire remaining stake (25 per cent) in Ageas Federal Life Insurance Company Limited (AFLI) pursuant to exercise of call option by Ageas.
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IDBI Bank Privatisation: Govt Likely to Invite EoIs in July-End After Discussions with RBI


The central government has been mulling the privatisation of IDBI Bank for quite some time now, and has kept the lender in its list of companies for divestment. The Department of Investment and Public Asset Management (DIPAM) is currently holding roadshows in the US for the sale of the bank, which is set to be another important landmark in reaching India’s divestment targets. The actual quantum of government stake sale at the IDBI Bank will be known once the roadshow is over, the Centre had said earlier in April.


Currently, the government is in the process of holding roadshows in the US, an official was quoted by PTI as saying, on June 10, Friday. After a few more such investor meets, it will finalise the contours of the IDBI Bank stake sale, the official added.


“We may need one more round of discussion with RBI on IDBI strategic sale. The expression of interest (EoI) may be invited by July-end," the official said. It was earlier confirmed by sources that the government may invite EoIs in May for selling its stake in IDBI Bank and expects to complete the disinvestment process in the current financial year 2022-23.


The official said while the quantum of stake dilution of both the government and LIC is yet to be decided, the management control in IDBI Bank will be transferred in the strategic sale.


DIPAM secretary Tuhin Kanta Pandey had in April also said that the EoIs will be invited once the meetings with investors were over. “The quantum of exit will be known post roadshow and then the structure of Expression of Interest will be finalised. One thing is very sure that management control will be passed on. Currently, it is with LIC. But, management control at what level of equity will have to be decided when we have decided the structure of EoI,” Pandey had said in Delhi during an event on LIC IPO roadshow.


The government holds 45.48 per cent stake in the bank, while LIC owns 49.24 per cent. Necessary amendments to the IDBI Bank Act have already been made through the Finance Act 2021, and transaction advisors have been appointed.


The Cabinet Committee on Economic Affairs had given in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank in May last year. “CCEA has given an in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank Ltd”, a government had statement said.


In January 2019, IDBI Bank became a subsidiary of LIC, following the acquisition of additional 8,27,590,885 equity shares. In December 2020, IDBI Bank was classified as an associate company due to the reduction of LIC shareholding to 49.24 per cent. The IDBI Bank privatisation efforts come during a time when the government has put off similar plans for Bharat Petroleum.

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IDBI Bank Q4 net profit rises 35%



IDBI Bank on Monday posted 35 per cent rise in net profit at Rs 691 crore for the quarter ended March 2022 due to fall in bad loan provisions as NPA came down.The bank had posted a net profit of Rs 512 crore for the same quarter of 2020-21.


Total income during January-March period of 2021-22, however, was lower at Rs 5,444.08 crore from Rs 6,894.86 crore in the year-ago period, IDBI Bank said in a regulatory filing.


The bank's core interest income during the period was down at Rs 4,599.67 crore as against Rs 5,781.48 crore a year ago. Income from other sources was also lower at Rs 844 crore from Rs 1,113 crore.


The proportion of gross bad loans or non-performing assets (NPAs) of the bank fell to 19.14 per cent of gross loans at March-end 2022 as against 22.37 per cent by March 2021.


In value terms, gross NPAs stood at Rs 34,115 crore as against Rs 36,212 crore.


Likewise, net NPAs came down to 1.27 per cent (Rs 1,856 crore) from 1.97 per cent (Rs 2,519 crore).


Thus, provisions for bad loans and contingencies for the quarter were trimmed to Rs 669.23 crore as against Rs 2,393.36 crore parked aside by the bank for March quarter of 2020-21.


Of this, provisions for bad loans stood at Rs 300.61 crore, as against Rs 1,119.65 crore


For the full year, the bank's net profit grew 79 per cent to Rs 2,439 crore from Rs 1,359 crore in 2020-21.


Total income during the year was down at Rs 22,985 crore from Rs 24,497 crore mainly on account of fall in interest income as well as those from other sources.


The bank said its gross advances stood at Rs 1,78,207 crore by March 31, 2022, registering a yearly growth of 10.07 per cent.


IDBI Bank said during March quarter of previous fiscal year, it had received interest of Rs 1,313 crore on income tax refund.




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IDBI Bank Q3 net profit surges 53%


IDBI Bank reported a 53% rise in net profit mainly due to a decrease in cost of funds, which helped boost both net interest income and net interest margin (NIM).
Net profit rose to Rs.578 crore in the quarter, from Rs.378 crore a year ago.


Net interest income (NII), or the difference between the interest earned on loans and that paid on deposits, increased 31% to Rs.2,383 crore mainly as the bank's cost of funds fell 60 basis points year on year to 3.79% in December 2021.


The fall in its cost of funds also helped IDBI Bank improve its NIM, which is the difference between the yield a bank earns on loans and that it pays for deposits. NIM improved 101 bps to 3.88% from 2.87% a year ago.

The rise in NII and NIM masked a tepid loan growth of 5% led by a 13% year on year growth in mid corporate loans and a 5% growth in retail, agriculture and micro enterprises. Total deposits fell 1% as the bank moved away from high-cost bulk deposits.


CEO Rakesh Sharma acknowledged that the bank's loan growth has been slow but said he is confident of growing above 10% led by retail and mid corporate loans in the next fiscal. A drop in provisions also contributed to the bank's net profit. Provisions dropped 11% to ₹1,189 crore from ₹1,332 crore a year ago as the bank continued to improve recoveries.

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IDBI Bank Q2 results: Net profit up 75%


IDBI Bank reported a 75 per cent year-on-year (yoy) increase in second quarter standalone net profit at ₹567crore, supported by a huge write-back in provisions for non-performing assets (NPAs) and lower tax expense.

The Bank had posted a net profit of ₹324 crore in the year ago quarter.Net interest income increased 9 per cent yoy in the reporting quarter to ₹1,854 crore (₹1,694 crore in the year ago quarter).

Other income, including income from non-fund based banking activities such as commission, fees, earnings from foreign exchange and derivative transactions, and profit and loss from sale of investment, declined about 4 per cent yoy at ₹846 crore (₹881 crore).

The received a write-back of ₹1,426 crore in provisions for NPAs against ₹165 crore in the year ago quarter. Tax expense burden was lower at ₹215 crore (₹347 crore).

As at September-end 2021, gross advances barely nudged up to ₹1,64,506 crore (₹1,63,841 crore as at September-end 2020).

Rakesh Sharma, MD & CEO, said the Bank has built up a sanctions pipeline in the mid and large corporate segments and disbursals are expected to pick up from year-end onwards.

The Bank expects to grow its corporate loan book by about ₹6,000 crore in the current financial year.

Samuel Joseph, Deputy Managing Director, said the Bank has an exposure of about ₹400 crore to the SREI group, which is undergoing corporate insolvency resolution process, and has made 100 per cent provision towards this exposure. IDBI Bank recovered ₹196 crore from DHFL.

P Sitaram, CFO, emphasised that the Bank will grow the corporate loan book even as the emphasis will continue to be on structured retail loans.

Gross NPAs declined about ₹1,186 crore during the reporting quarter to ₹34,408 crore.

Gross NPAs as a percentage of gross advances declined to 20.92 per cent against 21.48 per cent in the preceding quarter. Net NPAs, however, nudged up to 1.62 per cent of net advances against 1.56 per cent.

Fresh slippages rose by ₹1,438 crore (₹1,332 crore in the first quarter). The Bank settled NPAs aggregating ₹1,436 crore (₹587 crore).
ends.

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IDBI Bank Q1 results: Net profit rises

 


The private sector IDBI Bank on Wednesday reported a 318 percent YoY rise in net profit at Rs 603.3 crore during the quarter ended June 30, 2021. In the corresponding quarter last year, the bank had posted a net profit of Rs 144.4 crore.

In the first quarter of the current fiscal, its profit before tax (PBT) improved by 134 percent for Q1 2022. It has improved by 18 percent against Rs 512 crore reported a quarter ago.Its operating profit registered a growth of 109 percent YoY as it grew to Rs 2,776 crore.

The bank's net interest income (NII) grew 41.4 percent YoY to Rs 2,506 crore in Q1 FY22. And its net interest margin (NIM) improved by 125 bps to 4.06 percent for the quarter under review, as compared to 2.81 percent YoY.The bank's gross NPA ratio improved to 22.71 percent during the quarter under review, as against 26.81 percent in Q1 FY21. Gross NPA stood at 22.37 percent in Q4 FY21.

The bank's net NPA also improved to 1.67 percent during the quarter under review. While its net NPA was 3.55 percent in Q1 FY21, it was 1.97 percent in Q4 FY21.Its provision coverage ratio, including technical write-offs, improved to 97.42 percent in Q1 FY22 from 94.71 percent in Q1 FY21 and 96.90 percent in Q4 FY21.

The bank's CASA (current account savings account) increased 12 percent to Rs 1,16,609 crore during the quarter under review. As of June 30, 2020, it had reported CASA of Rs 1,04,315 and on March 31, 2021, it was Rs 1,16,491.The share of CASA in total deposits improved to 52.44 percent as of June 30, 2021, against 47.55 percent a year ago and 50.45 percent a quarter ago.

The bank's composition of advances portfolio, corporate versus retail was realigned to 38:62 in the quarter under review, as against 43:57 a year ago.The shareholders' funds of the bank decreased 3 percent QoQ and stood at Rs 1,56,698. crore. Under Basel III, the capital adequacy ratio (CAR) and CET I ratios were 16.23 and 13.64 percent, respectively.

As of June 30, 2021, the bank had COVID-19 provisions worth Rs 863 crore, more than the minimum amount required by the Reserve Bank of India (RBI).

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IDBI Bank disinvestment: Govt approves 100% stake sale by Centre, LIC


The government has approved the sale of its entire stake, and that of the Life Insurance Corporation of India (LIC), in IDBI bank.


On July 9, the Department of Investment and Public Asset Management (DIPAM) said the Cabinet Committee of Economic Affairs (CCEA) has given its go-ahead to the government and the LIC to offload 100 percent of their entire stakes in IDBI Bank, along with a transfer of management.


At present, IDBI Bank is classified as a private sector bank by the RBI with the government's shareholding at 45.5 percent, LIC's shareholding at 49.24 percent and the non-promoter shareholding at 5.29 percent.


However, DIPAM has said that the exact quantum of stake to be sold will be decided based on a number of factors. "It will be determined, as we go through the transaction, and ascertain investor's interest," it said.


The Department has also clarified that since LIC's stake will be sold alongside the government's shareholding in this transaction, there will be only one transaction advisor.


the Centre's plans to offload atleast 26 percent of its stake. It had also reported that the entire stake may be sold.


DIPAM, in the RFPs issued, had said that the bids by interested investment banks, financial institutions, consulting firms and law firms should be submitted by July 13.


Responding to the queries raised by bidders on the RFP, Dipam has said the broad quantum of primary infusion expected in the bank, and the timeframe for such infusion has not yet been decided. It has also clarified that consortium bids are not allowed.


LIC completed the acquisition of controlling stake in IDBI Bank in January 2019 making it the majority shareholder of the bank. Subsequent to the enhancement of equity stake by LIC, the RBI clarified that IDBI Bank stands re-categorised as a private sector bank.


The Cabinet Committee on Economic Affairs had cleared the 'strategic divestment' of IDBI in early May. LIC will reduce its shareholding in IDBI Bank in parallel with the central government, and with an intent to relinquish management control.


For 2021-22, the Centre has set itself a divestment target of Rs 1.75 lakh crore, on the back of the planned privatisation of Air India, Bharat Petroleum, Shipping Corp, Concor, two state-owned banks (yet to be decided) and the initial public offering of LIC Ltd.

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Cabinet approves strategic disinvestment, transfer of management control in IDBI Bank

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has given its in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank Ltd on Wednesday.


"The extent of respective shareholding to be divested by GoI and LIC shall be decided at the time of structuring of transaction in consultation with Reserve Bank of India," said the government in a statement.


To be sure, LIC Board had earlier approved stake dilution, relinquishing of management control in IDBI Bank.


Government of India (GoI) and LIC together own more than 94% of equity of IDBI Bank (GoI 45.48%, LIC 49.24%). LIC is currently the promoter of IDBI Bank with Management Control and GoI is the co-promoter.


LIC’s Board has passed a resolution to the effect that LIC may reduce its shareholding in IDBI Bank through divesting its stake along with strategic stake sale envisaged by the government with an intent to relinquish management control and by taking into consideration price, market outlook, statutory stipulation and interest of policy holders.


This decision of LIC's Board is also consistent with the regulatory mandate to it to reduce its stake in the Bank.


It is expected that strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank Ltd. and shall generate more business without any dependence on LIC and Government assistance/funds.


Resources through strategic disinvestment of Govt. equity from the transaction would be used to finance developmental programmes of the Government benefiting the citizens.


Last month, the RBI removed the LIC-controlled bank from its prompt corrective action (PCA) framework, which was imposed in May 2017, after it had breached certain regulatory thresholds, including capital adequacy, asset quality and profitability.


Presenting the Budget on February 1, Finance Minister Nirmala Sitharaman had proposed to take up the privatisation of two state-run banks along with IDBI Bank in FY22.


Meanwhile, IDBI Bank reported a nearly four-fold jump in its standalone profit after tax to ₹512 crore in the March quarter compared to ₹135 crore in the year-ago period on the back of an impressive 38% growth in its net interest income (NII).


The lender also turned profitable on an annual basis after five years as it reported a standalone profit of ₹1,359 crore for 2020-21 fiscal that ended in March as against a loss of ₹12,887 crore in FY20. On a consolidated basis, the lender reported a net profit of ₹547.93 crore for the January-March quarter as against ₹165.69 crore in the year-ago period.

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IDBI Bank back in black in FY21 after five years


LIC-controlled IDBI Bank turned profitable in the fiscal ended March after five years, posting a net profit of Rs.1,359 crore for the year.


In 2019-20, the lender had posted a net loss of Rs.12,887 crore. IDBI Bank is back in black after five years, said the lender.


In the last quarter of the fiscal year 2020-21, the bank reported an almost fourfold jump in its net profit to Rs.512 crore, IDBI Bank said in a press release


The bank, which came out of the RBI’s prompt corrective action (PCA) framework earlier in March, said its turnaround strategies led to the transformation.


Total income during Q4FY21 rose to Rs.6,969.6 crore from Rs.6,924.9 crore in the same period of 2019-20.


The full year income, however, was down to Rs.24,557 crore against Rs.25,295 crore.


Gross NPA (non-performing asset) ratio improved to 22.4% as on March 31 against 27.5%. Net NPA ratio improved to 1.9% from 4.2%

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IDBI Bank Q3 results: Net profit up


IDBI Bank
on Thursday reported a standalone net profit of Rs 378 crore for December quarter of the current fiscal year as bad loans shrank.

The bank had posted a net loss of Rs 5,763 crore for the year-ago period.

Total income, however, fell during the quarter under review at Rs 5,932.25 crore as against Rs 6,215.60 crore in the same period of 2019-20 as interest income came down.

Interest income of the lender was down at Rs 4,563.98 crore during the quarter as against Rs 4,937.24 crore in the year-ago period, the bank said in a regulatory filing.

However, the net interest income grew 18 per cent to Rs 1,810 crore.

Net Interest Margin (NIM) improved by 60 basis points to 2.87 per cent in the third quarter as compared to 2.27 per cent in the same period a year ago, IDBI Bank said in a release.

The bank's asset quality improved as gross non-performing assets (NPAs) or bad loans reduced to 23.52 per cent of the gross advances as of December 31, 2020 as against 28.72 per cent by the same period a year ago and 25.08 per cent by the end of September 2020.

Net NPAs decreased to 1.94 per cent from 5.25 per cent.

In value terms, gross NPAs were worth Rs 37,559.39 crore at December-end 2020 as against Rs 49,502.68 crore by the end of same month a year ago. Net NPAs were valued at Rs 2,410.90 crore, lower than Rs 6,805.49 crore.

However, the overall provisions for bad loans and contingencies were kept higher at Rs 796.31 crore for December quarter 2020-21 as against Rs 521.95 crore kept aside for the year-ago period.

But out of this, the provisions for bad loans were substantially lower at Rs 48.52 crore as against Rs 440 crore a year ago.

Provision Coverage Ratio (including technical write-offs) improved to 97.08 per cent as on December 31, 2020 from 92.41 per cent a year ago and 95.96 per cent by the end of September 2020.

IDBI Bank said it raised equity capital of Rs 1,435.18 crore during the quarter through QIP.

The tier 1 capital improved to 12.22 per cent from 10.16 per cent and CRAR (capital to risk weighted assets ratio) improved to 14.77 per cent from 12.56 per cent, it added.

Among others, during the quarter ended December 2020, the bank has sold 23 per cent stake out of 48 per cent holding in its joint venture IDBI Federal Life Insurance Company (now Ageas Federal Life Insurance Company Ltd).

The post-sale holding in the joint venture is 25 per cent as on December 31, 2020, the bank said.

Further, in accordance with the RBI guidelines relating to COVID-19, the bank has cumulative COVID-19 related provision of Rs 436 crore as on December 31, 2020.

The provision made by the bank is more than minimum required as per the RBI guidelines, it said.

The bank has made provision of Rs 70 crore during the quarter (Rs 270 crore as on September 30, 2020 has been continued), towards the provisioning requirement for cases to be restructured under the resolution framework.

The cumulative provision is Rs 340 crore as on December 31, 2020, said the lender.

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IDBI Bank likely to exit PCA list; bank claims fulfills all criteria

The Reserve Bank of India (RBI) may soon bring IDBI Bank out of the Prompt Corrective Action (PCA) list. According to the Zee Business exclusive report, IDBI Bank has recently written a letter to RBI and claimed it fulfills all criteria required to come out of the PCA list. The bank has been in this list since May 2017.

Zee Business reporter Anurag Shah said, "IDBI Bank has recently written a letter to the RBI and claimed it fulfills all criteria required to come out of the PCA list." Shah added that IDBI has reported profitability in last two consecutive quarters of Rs 135 crore and Rs 144 crore. Apart from this, its Provisioning Coverage Ratio (PCR) is to the tune of 94 per cent, which is highest among all Indian banks. IDBI's Capital Adequacy Ratio (CAR) is more than 13 per cent. 

Shah said that since bank is fulfilling all criteria to come out of the PCA list, RBI may soon delist it from there.

Reporting about the liquidity status of the IDBI Bank, Anurag Shah said, "IDBI Bank has got approval to sell 27 per cent stake in its insurance arm, IDBI Federal Insurance. Now, it can sell 23 per cent of the IDBI Federal stake to its strong promoter Aegis, while the rest 4 per cent to Federal Bank. This stake sale will also lead to more liquidity in the bank in coming times and that will definitely bring its CAR further down from existing 13 per cent."

On the benefits to be derived when and if RBI releases IDBI Bank from PCA list, Shah told Zee Business Managing Editor Anil Singhvi, "Once RBI brings IDBI Bank out of the PCA list, it will be able to do corporate lending from which it has been barred since May 2017. Apart from this, it will be useful for the government as well because it has already announced that it will sell its entire stake in the bank. If the bank comes out of the PCA list, they will get better valuations of their share."
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Govt may sell stake in IDBI Bank in FY21 but no decision yet on other banks

The government intends to go ahead with its proposed stake sale in IDBI Bank in the current fiscal and there is no decision as yet on privatising more banks, a finance ministry source said on Saturday.

The statement comes amid growing speculations about the government privatising more banks, including Uco Bank, Punjab & Sind Bank and Bank of Maharashtra, following reported recommendations by Niti Aayog.

The central bank also reportedly made a pitch for the government to pare down its stake in certain state-run banks to 26%.

The government held a 47.11% stake in IDBI Bank as of June 2020, while LIC is the promoter of the bad loan-laden lender with a 51% stake. The Centre has set a disinvestment target of Rs 2.1 lakh crore for the current fiscal. Of this, Rs 1.2 lakh crore will come from divestment of public sector undertakings.

The rest Rs 90,000 crore is expected to come from stake sale in financial institutions like LIC and IDBI Bank.

The centre will also come out with a list of strategic sectors soon. If banks feature in that, there could be scope for further amalgation or privatisation of state-run banks. “However, it will all depend on which sectors are finally part of the strategic sector list. The Cabinet will soon take a call on this issue,” said the source. Similarly, no final decision has been made yet on the quantum of the government’s stake dilution in insurance behemoth LIC, added the source.

Once a sector is declared strategic, a maximum of four state-run companies will be allowed in it, the government recently announced. Already, thanks to a series of amalgamations in recent years to create a few lenders with much stronger balance sheets, the number of state-run banks has been reduced from 27 in 2017 to just 12 now.

Despite the enormous challenges posed by the Covid-19 outbreak, the government is working on completing the stake sale process of about 23 public sector companies, divestment in which has already been cleared by the Cabinet, finance minister Nirmala Sitharaman said earlier this week.
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IDBI Bank posts net profit in Q4

IDBI Bank on Saturday posted a net profit of Rs 135 crore for the quarter ended March 2020 on account of recoveries from bad loans. The lender reported a profit after 13 straight quarters of net losses.

The bank, majority owned by Life Insurance Corporation of India (LIC), had posted a net loss of Rs 4,918 crore in the corresponding period of last year.

Total income rose to Rs 6,925 crore as against Rs 6,616 in the fourth quarter of 2018-19, the bank said in a regulatory filing.

As a result of increased recovery from resolution of bad loans, there was write back of Rs 1,511 crore as against provision of Rs 7,233 crore in the same period last year.

The bank made COVID-19-related provisions of Rs 247 crore during the quarter against standard assets.

The gross non-performing assets ratio inched up to 27.53 percent during the quarter as against 27.47 percent, while net NPA came down sharply to 4.19 percent as against 10.11 percent earlier.

The bank raised Rs 745 crore through issue of Basel-III compliant tier-2 bonds in the March quarter. The amount mobilised would be counted as part of tier-2 capital and enhance the capital adequacy of the bank, it said.

Despite posting a profit in the fourth quarter, IDBI Bank logged a net loss of Rs 12,887 crore for 2019-20 as against a net loss of Rs 15,116 crore in FY19.

The net interest margin (NIM) for FY20 improved to 2.61 percent as against 2.03 percent in the previous fiscal.

In January 2019, LIC completed the acquisition of 51 percent controlling stake in the lender. The state-run life insurer infused Rs 21,624 crore into the bank.

The bank, which is under the Reserve Bank of India's prompt corrective action (PCA) framework, said it has achieved all PCA parameters for exit except return on asset.
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IDBI Bank Q3 results net loss widens


IDBI Bank on Tuesday said its loss widened to Rs 5,763.04 crore for the December quarter from Rs 4,185.48 crore in the year-ago period. The bank had repoted Rs 3,458.84 crore loss in the September quarter.

The lender, however, said it would have reported a profit of Rs 418 crore instead of a loss of Rs 5,763 crore, if continued under the old tax regime.

The LIC-owned lender made Rs 6,523 35 crore as provisions for taxes during the quarter, even provisions & contingencies stood mere at Rs 521.95 crore compared with Rs 6,530.75 crore in provisions in the year-ago period.

Gross non-performing assets (NPAs) for the quarter fell to 28.72 per cent from 29.43 per cent in September quarter and 29.67 per cent in the year-ago quarter.

In respect of RBI-referred NCLT accounts, the bank is holding provisions worth Rs 22,644.40 crore as on December 31, 2019.

The bank's Provision Coverage Ratio (PCR), including technical write-offs, stood higher at 92.41 per cent.
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IDBI Bank likely to be out of PCA framework in fourth quarter

LIC-controlled IDBI Bank expected to come out of the Prompt Corrective Action (PCA) framework in the last quarter of the current fiscal with the support of capital infusion and recovery from large IBC cases. According to sources, some of the restrictions with regard to lending by the bank have been eased recently.


With money coming from resolution on Essar Steel and expected flow from resolution of Bhushan Power and Steel and Alok Industries, sources said the bank is likely to be posting profit during the third quarter and the subsequent quarter.

The bank has already come below net NPA threshold of 6 per cent, one of the three parameters for triggering PCA framework. The net NPA of the bank reduced to below 6 per cent in the second quarter ended September 2019.

Recently, Parliament approved Rs 9,300 crore capital infusion in IDBI Bank. The department of financial services got an additional Rs 4,557 crore for infusion into IDBI Bank through recap bonds for their share of 47.11 per cent in IDBI Bank. State-owned LIC, which is the promoter of the debt-ridden lender with 51 per cent stake, will pump in an additional Rs 4,743 crore to improve the bank's capital position.

With this kind of capital infusion coupled with write back from the recoveries from large NPA cases, the bank is expected to come out from the weak bank watch list by the end of the current fiscal, sources said.

The PCA framework kicks in when banks breach any of the three key regulatory trigger points namely capital to risk weighted assets ratio, net non-performing assets (NPA) and return on assets (RoA).

Earlier this month, Finance Minister Nirmala Sitharam said the recapitalisation was done by the government by infusing Rs 21,157 crore into IDBI Bank since 2015 after we came back to power and LIC infused Rs 21,624 crore.

"So both put together have given Rs 42,781 crore to the bank. This has help reduce the net NPAs from a peak of 17.3 per cent in September, 2018 to 5.97 per cent in September, 2019. It has come below RBI's 6 per cent net NPA threshold level," she had said.

Earlier this year, the RBI removed five banks - Bank of India, Bank of Maharashtra, Oriental Bank of Commerce, Allahabad Bank and Corporation Bank - from the PCA framework in two phases after capital support from the government that resulted in improvement in their financial parameters.


The capital infusion helped these lenders meet requisite capital thresholds and reduced their net NPA levels to below 6 per cent.
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IDBI Bank Q2 net loss narrows; asset quality improves


IDBI Bank Ltd on Friday said its second quarter net loss narrowed to ₹3,459 crore on the back of higher net interest income and other income. The bank posted a net loss of ₹3,602.49 crore in the year-ago period.

Net interest income, or the difference between interest earned on loans and that paid on deposits, increased 25.42% to ₹1,631.48 crore from ₹1,300.86 crore in the corresponding period last year.

Other income, which includes core fee income, gained 28.08% to ₹1,032.66 crore in the three months.

CASA deposit increased 15.49% to ₹1.04 trillion as on 30 September, against ₹90,071 crore for the same quarter last year.

Earlier this year, insurance behemoth Life Insurance Corporation of India (LIC) acquired 51% controlling stake in IDBI Bank, marking the entry of the more than 60-year old state-owned insurer into the banking space.

The bank said net interest margin (NIM) improved 53 basis points (bps) to 2.33% during the quarter.

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IDBI Bank Q1 loss widens, asset quality improves


IDBI Bank on Wednesday said its loss for the June quarter widened to Rs 3,801 crore from Rs 2.410 crore a year ago, along with a decline in interest income.

The lender said its net interest income was at Rs 1,458 crore for the first quarter of fiscal year 2020 as against Rs 1,639 crore last year. The banks’ net interest margin was at 2.13 per cent compared with 2.17 per cent.

IDBI Banks’ gross NPA ratio improved to 29.12 per cent as on June 30 against 30.78 per cent as on June 30, 2018.

Net NPA ratio improved to 8.02 per cent from against 18.76 per cent as on June 30, 2018 and 10.11 per cent as on March 31, 2019.

Net NPAs reduced to Rs 10,963 crore from Rs. 29,981 crore last year.

Provision Coverage Ratio (PCR-including technical write-offs) improved to 87.79 per cent from 64.45 per cent.

Recovery from technically write off accounts improved to Rs 79 crore in against Rs 69 crore. First Time NPAs reduced by 55 per cent from Rs 7,799 crore in Q1-2019 to Rs 3,486 crore.
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