IDBI Bank crafts comprehensive turnaround strategy, takes steps to shore up capital

IDBI Bank has crafted a comprehensive turnaround strategy, with a focus on augmenting its capital base and recovery from NPAs.

Dr S S Banerjee, Executive Director, IDBI Bank, while unveiling the strategy at a Press Meet in Kolkata stated "Aggressive recovery and prevention of further slippages is a priority area for IDBI Bank. Given the stress in the corporate sector, the Bank will restrict growth in the corporate loan book and focus on increasing retail and priority sector asset base.

This will help the Bank to reduce risk weighted assets and improve CAR in the short term. The Bank will look at reducing its operational cost and sell non-core assets over a period of time. The Bank has already initiated the process."

Krishnendu Banerjee, Chief General Manager and Zonal Head of West Bengal, Bihar and the North-East, added "The Zone is committed to implementing the Bank's strategic initiatives to help the institution regain its stature, going forward. While the headwinds impacting its current financial health are in large measure due to legacy issues, including loans given for core and infrastructure sector development, these have been recognized and taken up for speedy resolution.

"We affirm that the basic operations of the Bank, as borne out by a seven fold rise in operating profit in Q4 of FY '17 over Q3, among others, remain robust. Our service propositions in the retail segment continue to enjoy widespread customer support as we undertake regular banking operations, including deposit taking and lending to a burgeoning customer base.

"The virtual confluence of these, continued Government support and trust in the Bank's intrinsic business viability as its largest shareholder (88% equity share along with quasi-Government LIC) and the turnaround strategy adopted by the Bank with a pronounced accent on a 'capital-light' business model and pruning of operating cost, will stand IDBI Bank in good stead and help it regain its vitality and privileged standing of yore in the emerging domestic banking system." mpost