IDBI Bank Q1 net down 66% on lower interest income, bad loans; shares plunge

Government-owned IDBI Bank Ltd has posted a 66 percent fall in its net profit for the quarter ended 30 June on account of a decline in interest rate and other income generation and a sharp rise in bad loans, sending its shares down about 7 percent.

Net profit stood at Rs 104.8 crore compared with Rs 307 crore a year ago.

[caption id=“attachment_92939” align=“alignleft” width=“380”]  Net profit stood at Rs 104.8 crore[/caption]

Net interest income, the core income of the lender, fell by 15 percent to Rs 1,250 crore from Rs 1,475 crore a year ago. Other income too registered a 30 percent decline to Rs 499.75 core from Rs 717 crore.

Gross non-performing assets (NPAs) of the lender spiked to 5.64 percent of total loans in the quarter compared with 4.34 percent in the year-ago quarter and 4.9 percent in the March quarter.

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Net NPAs, or bad loans after making provisions, rose to 2.87 percent from 2.16 percent in the corresponding period last year.

At 14:31 pm, the stock was down 6 percent at Rs 85 and the Sensex was down 0.8 percent.

State-run banks have logged modest rise in their bottom line numbers in the June quarter hit by a rise in bad loans and subsequent provisions. Under norms, banks need to set aside anywhere between 20percent to 100percent of the loan value as provisions if a loan turns bad. On the other hand, private sector banks have reported better numbers.

Besides the economic slowdown, large delays in receiving clearances for projects too have contributed to the rise in bad loans.