IDBI Bank again posts loss

Lender takes ₹6,273 cr.-hit for choosing lower tax option

IDBI Bank posted a net loss of ₹5,763 crore for the quarter ended December 31,2019 on account of a one- time hit of ₹6,273 crore for exercising the option for lower tax, compared with a loss of ₹4,185 crore reported during the same period of the previous year.

This was the 13th straight quarterly loss for the lender.

However,the bank posted profit before tax for the first time in 13 quarters, which was ₹756 crore.

Rakesh Sharma, MD and CEO, IDBI Bank, said the lender has made an accelerated provision of ₹1,679 crore during the quarter.

This helped the bank to lower ratio of non-performing assets (NPAs) to 5.25% from the 14.01% in the year-ago period and 5.97% a quarter ago. With this, the bank is hopeful of coming out of the restrictions under prompt corrective action of the Reserve Bank of India.

Net NPA of 6% is a trigger for such restriction.

NPA ratio still high

The gross NPA of the bank is 28.72% as at December end compared with the 29.67% a year ago. Mr. Sharma said the the ratio remained high as the bank’s loan book contracted as it was unable to grow its assets due to PCA restrictions.

“Recovery during the quarter, which was ₹3,136 crore, was higher than the slippages, which was ₹2,113 crore,” Mr. Sharma said.

Total recovery, including from written off accounts and upgradation, was over ₹3,500 crore.

Loans to DHFL Slippages during the quarter include loans to Dewan Housing Finance Corporation (DHFL) and Jain Irrigation. Going ahead, the bank expects slippages to remain within ₹800 crore a quarter.

Mr. Sharma also informed that the bank had received binding bids for selling its stake in IDBI Federal Life Insurance Company.

The lender holds a 48% stake in the insurance entity.

The deal is expected to be concluded latest by the second quarter of the next financial year.

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Printable version | Feb 27, 2020 8:11:39 AM |

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