IDBI Bank has reported 40% growth in net profit at Rs 1719.27 crore for the quarter ended June 2024 (Q1FY2025), driven by hefty reversal of provisions. The bank has posted 19% decline in net interest income (NII), while the core fee income of the bank improved 4% in Q1FY2025. The Net Interest Margin (NIM) of the bank dipped to 4.18% in Q1FY2025 compared to 5.80% in the corresponding quarter of previous year.

On business front, the bank as has posted 14% growth in business with strong 16% surge in loan book. The asset quality of the bank was stable in Q1FY2025. Bank has raised the credit to deposit ratio to 72.6% at end June 2024 from 70.8% at end June 2023. However, the CASA ratio of the bank has declined to 48.6% at end June 2024 from 52.6% at end June 2023.

Asset quality improves: The bank has exhibited sharp improvement in the asset quality with the dip in fresh slippages of loans in Q1FY2025.

The fresh slippages of loans stood at Rs 659 crore in Q1FY2025 compared with 1852 crore in previous quarter and Rs 602 crore in the corresponding quarter last year.

The recoveries of NPAs stood at Rs 1508 crore, upgradations at Rs 244 crore and the write-off of loans was at Rs 29 crore in Q1FY2025.

Provision coverage ratio was steady at 99.34% at end June 2024 compared to 99.09% a quarter ago and 98.99% a year ago.

The capital adequacy ratio of the bank stood at 22.4% with Tier I ratio at 20.3% at end June 2024.

The risk weighted assets of the bank has increased 7% YoY to Rs 177755 crore end June 2024,

Asset Quality Indicators: IDBI Bank
'	Jun-24	Mar-24	Dec-23	Sep-23	Jun-23	Variation
						QoQ	YoY
Gross NPA (Rs Crore)	7795.42	8916.84	8589.40	8645.23	8762.51	-13	-11
Net NPA (Rs Crore)	453.57	643.83	593.34	651.01	730.60	-30	-38
% Gross NPA	3.87	4.53	4.69	4.90	5.05	-66	-118
% Net NPA	0.23	0.34	0.34	0.39	0.44	-11	-21
% PCR	99.34	99.09	99.17	99.10	98.99	25	35
% CRAR - Basel III	22.42	22.26	20.32	21.26	20.33	16	209
% CRAR - Tier I - Basel III	20.26	20.11	18.04	18.86	17.93	15	233
Variation in basis points for figures given in percentages and in % for figures in Rs crore

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Business Highlights:

Healthy business growth: The business of the bank has increased 14% YoY to Rs 478916 crore end June 2024, driven by 16% surge in advances to Rs 201368 crore. Deposits moved up 13% to Rs 277548 crore at end June 2024.

CASA deposits ratio declines: The CASA deposits of the bank increased 5% YoY to Rs 134810 crore at end June 2024. The current account deposits were flat at Rs 44848 crore, while saving account deposits increased 7% to Rs 89962 crore end June 2024. The CASA ratio declined to 48.6% at end June 2024 compared to 52.6% at end June 2023, while also eased from 50.4% a quarter ago. The term deposits have increased 23% to Rs 142738 crore end June 2024.

Strong retail loan growth: Advances growth was driven by retail loans rising 25% YoY to Rs 116688 crore at end June 2024, while credit to MSME rose 2% to Rs 14158 crore at end June 2024. The credit agriculture declined 5% to Rs 11499 crore. The corporate credit has expanded 10% to Rs 59023 crore end June 2024.

Investment book of the bank moved up 10% YoY to Rs 118504 crore at end June 2024. The SLR book increased 10% to Rs 89324 crore, while non SLR book rose 9% to Rs 32810 crore at end June 2024. The AFS book dipped 33% to Rs 24554 crore, while HTM book increased 18% to Rs 78776 crore at end June 2024. The duration of the overall investment portfolio stood at 4.09 years end June 2024 compared with 3.98 years at end June 2023. The duration of the AFS investment book was at 2.98 years.

Margins decline: The bank has showed 46 bps YoY jump in cost of deposits to 4.58%, while yield on advances dipped 265 bps YoY to 9.82% in Q1FY2025. Thus, the NIM has slipped 162 bps YoY to 4.18%.

Book value of the bank stood at Rs 42.0 per share at end June 2024, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 41.5 per share at end June 2024.

Quarterly Performance

NII declines as NIM dip: Bank has recorded 3% decline in the interest earned at Rs 6666.00 crore, while interest expenses increased 20% to Rs 3433.18 crore in Q1FY2025. NII declined 19% to Rs 3232.82 crore in the quarter ended June 2024.

Moderate growth in the core fee income: Bank has posted strong 4% growth in core fee income to Rs 471 crore, while the recoveries jumped 62% to Rs 147 crore and other income rose 15% to Rs 31 crore. However, the forex income declined 34% to Rs 75 crore and the treasury income declined 51% to Rs 81 crore, causing 5% dip in the overall non-interest income to Rs 805.25 crore in the quarter ended June 2024.

Stable expenses ratio: The operating expenses of the bank increased 7% to Rs 1962.54 crore, as other expenses moved up 15% to Rs 1010.2 crore, while employee expenses were flat at Rs 952.34 crore in Q1FY2025. Cost to income ratio increased to 48.6% in Q1FY2025 compared with 37.8% in Q1FY2024, causing the Operating Profit to dip 31% to Rs 2075.53 crore.

Provisions and contingencies reversed: The bank has reversed provisions of Rs 443.46 crore. The bank has reversed loan loss provisions of Rs 901 crore, investment provisions of Rs 358 crore and other provisions of to Rs 11 crore. However, standard asset provisions jumped 67% to Rs 826 crore.

Effective tax rate declined to 31.7% in Q1FY2025 from 33.0% in Q1FY2024. Net Profit rose by 40% YoY to Rs 1719.27 crore during quarter ended June 2024.

Financial Performance FY2024

Bank has posted 55% increase in net profit to Rs 5634.09 crore in the year ended March 2024 (FY2024). The net interest income increased 24% to Rs 14186.44 crore, while non-interest income dipped 17% to Rs 3610.91 crore. Net total income increased 13% to Rs 17797.35 crore in FY2024. The operating expenses increased 16% to Rs 8205.29 crore, while provision and contingencies dipped 60% to Rs 1396.64 crore, allowing profit before tax to increase 56% to Rs 8195.42 crore in FY2024. The cost-to-income ratio increased to 46.1% in FY2024 compared to 44.7% in FY2023. An effective tax rate rose to 31.3% in FY2024 compared to 30.4% in FY2023. The net profit has increased 55% to Rs 5634.09 crore in FY2024.

IDBI Bank: Results
Particulars	2406 (3)	2306 (3)	Var %	2403 (12)	2303 (12)	Var %
Interest Earned	6666.00	6859.99	-3	26426.13	20569.78	28
Interest Expended	3433.18	2862.40	20	12239.69	9139.23	34
Net Interest Income	3232.82	3997.59	-19	14186.44	11430.55	24
Other Income	805.25	851.96	-5	3610.91	4371.98	-17
Net Total Income	4038.07	4849.55	-17	17797.35	15802.53	13
Operating Expenses	1962.54	1830.83	7	8205.29	7066.70	16
Operating Profits	2075.53	3018.72	-31	9592.06	8735.83	10
Provisions & Contingencies	-443.46	1190.43	LP	1396.64	3497.86	-60
Profit Before Tax	2518.99	1828.29	38	8195.42	5237.97	56
Provision for tax	799.72	604.11	32	2561.33	1592.88	61
PAT	1719.27	1224.18	40	5634.09	3645.09	55
EPS*(Rs)	6.4	4.6	'	5.2	3.4	'
Adj BV (Rs)	41.5	34.7	'	38.3	32.9	'
* Annualized on current equity of Rs 10752.4 crore. Face Value: Rs 10, Figures in Rs crore
Source: Capitaline Corporate Database

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