Mumbai :Private sector lender IDBI Bank managed to keep its net non-performing asset ratio below 0.5% in the three months to June. The bank’s net NPAs were 0.44% of net advances as on June 30, down 48 basis points (bps) from the previous quarter. Its gross bad debt stood at 5.05% in the June quarter, up from 6.38% in the March quarter.
Mumbai :Private sector lender IDBI Bank managed to keep its net non-performing asset ratio below 0.5% in the three months to June. The bank’s net NPAs were 0.44% of net advances as on June 30, down 48 basis points (bps) from the previous quarter. Its gross bad debt stood at 5.05% in the June quarter, up from 6.38% in the March quarter.
Excess provisioning led the bank to report a provision coverage ratio (PCR) including technical write-offs of 98.99% in the June quarter. In the three months to June, IDBI Bank made additional provisions ₹770 crore against NPAs at a higher rate than suggested by the RBI, “based on management’s assessment of impairment in various categories of advances”. PCR refers to the percentage of bad loans set aside by a bank.
Excess provisioning led the bank to report a provision coverage ratio (PCR) including technical write-offs of 98.99% in the June quarter. In the three months to June, IDBI Bank made additional provisions ₹770 crore against NPAs at a higher rate than suggested by the RBI, “based on management’s assessment of impairment in various categories of advances”. PCR refers to the percentage of bad loans set aside by a bank.
Subscribe to continue reading
Rakesh Sharma, chief executive of IDBI Bank, told reporters on Monday that the bank has put in additional provisions as a prudent measure and is following this policy to build strong buffers.
“We are already about 99% PCR and I don’t see much room from here. “The bank is also focusing on recovering bad loans from technically written-off loans to clean up the balance sheet,” Sharma said.
Meanwhile, IDBI Asset Management Limited, IDBI MF Trustee Co. Ltd, LIC Mutual Fund Asset Management Ltd and LIC Mutual Fund Trustee Pvt Ltd entered into an agreement on December 29 to transfer IDBI mutual fund schemes to LIC MF. The bank said it received approval from the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI) for the AUM transfer on March 23 and April 3 respectively.
“A notice was sent to unit owners on June 16 giving them the option to opt out of the scheme.
The option was from June 20 to July 19. The data of the exit option is compiled by the registrar and the share transfer agent, and the transfer process is concluded after the completion of the necessary procedures after collecting the necessary information,” the bank said.
IDBI Bank reported net profit on Monday ₹1,224 crore in Q1FY24, up 62% over the same period last year, on the back of higher net interest income. Its net interest income grew 61% year-on-year ₹3,998 crore.