IDBI Bank books best-ever quarterly net profit

Mumbai: Privatisation-bound IDBI Bank on Monday reported its best-ever quarterly numbers, with a 60 per cent jump in net income at Rs 927 crore for the December quarter on all-round growth in core business and a massive reduction in bad loans along with a near record margin.

The management, controlled by the national insurer LIC, has guided towards better overall numbers in the March quarter, pencilling in an under-10 per cent gross NPAs (non-performing assets) by the end of this fiscal.

Rakesh Sharma, the managing director of the lender, said the quarterly profit is primarily driven by core business growth as all other income streams, be its fee income or investment gains or even recoveries from written off assets, have performed below par.

"Therefore, the declared numbers are all from our core business of banking and will only continue to improve further as we go forward and given this strong footing, you can expect more positive surprises from us going forward on the profitability, margins and gross NPA reduction, which as promised will be brought down to under-10 per cent by March," Sharma told reporters after the results announcement.

The city-headquartered bank reported a core net interest income of Rs 2,925 crore, which grew 23 per cent, and an overall loan growth of similar quantum driven by retail which grew 15 per cent (net disbursals at Rs 14,000 crore or 67 per cent of the total assets).

The corporate loans grew 26 per cent to Rs 8,029 crore, constituting 33 per cent of the loan book.

The loan ratio stood at 63:37 in the year-ago period and the objective is to take it to 70:30, deputy managing director Suresh Khantanhar said.

The bank said its core net interest margin rose by 71 bps to 4.59 per cent and guided towards further improvement, given the rising interest rate scenario.