IDBI Bank posted an all-time high standalone quarterly net profit at ₹1,224 crore in the first quarter of FY24 on the back of strong growth in net interest income even as asset quality improved further due to accelerated provisioning.

Net profit in the reporting quarter jumped 62 per cent year-on-year as compared with year-ago period’s ₹756 crore.

Net interest income rose 61 per cent yoy to ₹3,998 crore (₹2,488 crore in the year ago period).

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Other income down

Other income, which includes fees earned from providing services to customers, commission income from non-fund-based banking activities, profit / loss (Including revaluation) from sale of investment, and recoveries from advances written off, declined 25 per cent yoy to ₹852 crore (₹1,140 crore).

In this regard, bank officials emphasised that in the year-ago quarter, the bank received one-time inflows aggregating ₹215 crore. But there were no one time inflows in the reporting quarter.

During the quarter, the bank made additional provision of ₹770 crore on non-performing assets (NPAs) at the rates higher than those prescribed by RBI, based on management assessment of the degree of impairment in various categories of advances.

This comes even as assets becoming first time NPA and increase in existing NPA during the quarter was at ₹581 crore and ₹51 crore, respectively.

Rakesh Sharma, MD & CEO, said his bank channeled a portion of the recoveries aggregating about ₹1,600 crore made during the reporting quarter for the aforesaid accelerated provisioning.

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NIM surges

Net interest margin (NIM) jumped to 5.80 per cent (taking into account the recovery proceeds) from 4.02 per cent in the year ago quarter. Core NIM rose to 3.94 per cent from 3.26 per cent.

Gross non-performing assets (NPAs) to gross advances ratio improved to 5.05 per cent as at June-end 2023 against 6.38 per cent as at March-end 2023.

Net NPA to net advances ratio too improved to 0.44 per cent as at June-end 2023 against 0.92 per cent as at March-end 2023.

Net advances at ₹1,65,403 crore as at June-end 2023 grew by 20 per cent yoy against ₹1,38,223 crore as of June 30, 2022. Deposits increased about 9 per cent yoy to ₹2,44,971 crore (Rs 2,25,269 crore).

Jayakumar S Pillai, Deputy Managing Director, said the bank has identified about 10 stressed accounts aggregating around ₹5,000 crore for transfer to National Asset Reconstruction Company Ltd as part of its balance sheet clean up exercise.