IDBI Bank Q1 loss widens to Rs 3,800 crore on higher provisions, lower net interest income

IDBI Bank on Wednesday said its first-quarter net loss widened to Rs 3,800.84 crore for the first quarter ended June 30, 2019, due to higher provisioning and lower net interest income.

"The private sector lender had posted a net loss of Rs 2,410 crore in the year-ago period," IDBI Bank said in a filing to the Bombay Stock Exchange. The bank had reported a net loss of Rs 4,918.44 crore in March quarter.

Earlier this year, the insurance behemoth LIC acquired 51 per cent controlling stake in IDBI Bank, marking the entry of more than 60 years old state-owned insurer into the banking space.

The bank's net interest income (NII), which is the difference between interest earned and interest expended, declined by 11.04 per cent to Rs 1,458 crore in April-June quarter of FY20 as against Rs 1,639 crore in the same quarter last year, IDBI Bank said in a regulatory filing.

The bank said net interest margin (NIM) decreased by 4 basis points (bps) from 2.17 per cent to 2.13 per cent in the corresponding quarter last year.

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The other income (non-interest income), which includes core fee income, jumped 29.55 per cent to Rs 832.83 crore in Q1FY20 against Rs 642.84 crore in Q1FY19.

The operating profit of the bank dropped by 12 per cent to Rs 951 crore as compared to Rs 1,081 crore made in the year-ago quarter.

During the quarter under review, provisions increased 20.93 per cent to Rs 6332.05 crore from Rs 5235.96 crore in the year-ago quarter. In March quarter, the bank's provisions stood at Rs 8532.78 crore.

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IDBI Bank's asset quality improved during June quarter, with gross non-performing assets (NPAs) ratio - bad loans as a percentage of gross advances - easing to 29.12 per cent versus 30.78 per cent in the year-ago quarter. Net NPA fell to 8.02 per cent during June quarter as compared to 18.76 per cent in the corresponding quarter last year.

Ahead of Q1 earnings, shares of IDBI Bank closed Wednesday's trade at Rs 27.15 apiece, up 1.31 per cent, on the BSE.

Edited by Chitranjan Kumar