MUMBAI India's state-run IDBI Bank Ltd said it expected a reduction in bad loans this financial year as the economy improves and as the bank steps up recovery efforts, after a surge in sour debt led it to post a $258 million quarterly loss.
IDBI also hopes to raise as much as $1 billion during the year to March by selling non-core assets to fund its growth, Chief Executive Kishor Kharat told a news conference on Friday.
The bank made a net loss of 17.36 billion rupees ($258 million) in its fiscal fourth quarter to March 31, compared with a net profit of 5.46 billion rupees a year earlier, IDBI said in a regulatory filing. Its gross bad loan ratio widened to 10.98 percent in March from 8.94 percent a quarter earlier.
This was the bank's second straight quarter of losses after a net loss of 21.84 billion rupees in the December quarter.
Including IDBI, 11 state-run banks have so far posted combined losses of about $2.5 billion in the March quarter due to a surge in provisions for bad debt after a clean-up ordered by their regulator, Reserve Bank of India.
"Now at least we can say the storm is gone," said IDBI's Kharat, adding he expected the bank's bad loans to come down in the next year.
On top of its bad loans of 248.76 billion rupees, IDBI has about 190 billion rupees worth of loans where repayments have been delayed beyond 60 days.
Indian government has plans to lower its stake in IDBI Bank to below 50 percent from about 76 percent currently in a test case for bank reforms.
IDBI, which received approval for a share sale to institutional investors that will dilute the government holding in the bank, has yet to decide on the timing of the issue.
($1 = 67.3817 Indian rupees)
(Reporting by Devidutta Tripathy; Editing by Mark Potter)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Published Date: May 21, 2016 00:00 AM | Updated Date: May 21, 2016 00:00 AM