IDBI Bank net profit rises 62% riding on NII growth

economictimes.indiatimes.com:

IDBI Bank's net profit rose 62% year-on-year to ₹1,224 crore in the quarter ended June 30, 2023, on the back of strong growth in interest income even as the bank stepped up provisions for bad loans. The lender's net profit stood at ₹756 crore in the corresponding quarter of the previous year.

Net interest income (NII), the difference between the interest earned on loans and that paid for deposits, increased 61% to ₹3,998 crore, helped by a sharp increase in net interest margin (NIM) as the bank could pass on higher interest rates to borrowers. NIM increased to 5.80% during the quarter under review from 4.02% a year ago.

The bank's chief executive Rakesh Sharma said NIM was helped by a recovery of ₹1,000 crore which also led to interest recovery, aiding margins. Excluding this gain, the bank's core NIM still improved to 3.94% from 3.73% a year ago.

Sharma said the bank expects to maintain NIM above 3.50% and keep credit costs and net slippages below 0.40% and 1.75%, respectively. «We have so far delivered better than our targets and expect to continue in the same way,» he said.

The bank's assets quality improved with gross NPAs down to 5.05% of advances rom 19.90% a year earlier. Provisions increased to ₹1,190 crore in June 2023 from ₹959 crore a year earlier because the bank made an excess of ₹770 crore provisions during the quarter.