April 05 2020
IDBI Bank loss surges threefold on provisions
05 February 2019

NPA recovery improves to ₹3,440 cr.

IDBI Bank has reported an almost threefold surge in losses during the October-December quarter to ₹4,185.48 crore compared with ₹1,524.31 crore in the year-earlier period on higher provisioning.

Provision towards non-performing assets was ₹5,075 crore during the quarter compared with ₹3,637 crore.

While gross non-performing assets (NPA) ratio increased to 29.67% from 24.72% in the year-earlier period, it declined sequentially from 31.78% .

Net NPA ratio declined to 14.01% from 16.02% in the year-earlier period.

Provision coverage ratio (including technical write-offs) improved to 75.21%. from 56.99%.

The bank was able to contain the slippages which were ₹2,211 crore — the lowest in the last seven quarters. Recovery from NPAs improved to ₹3,440 crore during the quarter compared with ₹537 crore.

Last month, Life Insurance Corporation of India became the promoter of the bank after it completed the acquisition of 51% stake held by the government.

The bank, which is under prompt corrective action (PCA) framework of the Reserve Bank of India, received a total capital of ₹21,624 crore from the insurer.

“The deal with LIC is a game changer.

“Now that we have received capital, we have complied with the PCA requirement as we are above the threshold,” said Rakesh Sharma, MD and CEO of IDBI Bank.

Due to the capital infusion, the bank has achieved regulatory capital requirement as on December 31, 2018, and its common equity tier-1 (CET-1) capital improved to 9.32% as on December 31, 2018, against 6.62% a year ago.

“Our focus is on recovery and reduce the net NPA. Everything will be cleaned up in the next two to three quarters and we will come out of the PCA,” he said. Mr. Sharma also said the board had approved change in the name of the bank to LIC IDBI Bank. But since the lender has to submit two names to the regulator, it will also suggest LIC Bank.

“Hopefully, LIC IDBI Bank name will be approved because there is no other such name. Once the name is approved, we will do the re-branding,” he added.



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