Published: Thu, February 01, 2018
Economy | By

IDBI Bank narrows loss on better margin but NPAs soar to 25%

IDBI Bank narrows loss on better margin but NPAs soar to 25%

The net interest income - a key gauge of profitability - grew by 6% to Rs 5,705 crore from Rs 5,363 crore from a year ago.

ICICI Bank reported a 32 per cent drop in its profits for the third quarter ended December 31, 2017 to ₹1,650 crore. A sharp plunge in treasury income caused by a trend reversal in bond yield movement also led to the decline in Q3.

ICICI Bank said it made recoveries and upgrades of Rs 1,108 crore from bad loans in October-December of this fiscal, compared with Rs 625 crore in the year-ago quarter. The domestic NIM remained 3.5 per cent; overall NIM was 3.12 per cent. Analysts say better than anticipated loan growth aided the loan loss ratios.

CASA deposits increased by 12% year-on-year which is now 50.4% of the total deposits. Despite an operating profit of Rs 5,225 crore, the bank registered losses as it made higher provisions of Rs 4,179 crore - up 30% from Rs 3,205 crore in the corresponding period previous year. This compares to the 5,862 crores estimated.

The gross NPA ratio decreased to 7.82 per cent at December quarter from 7.87 per cent at September 30, 2017, while net NPA ratio also decreased to 4.20 per cent at the end of December quarter from 4.43 per cent. The bank expects provisioning to stay elevated in the next few quarters. The PCA framework places restrictions on the activities of banks in terms of expansion, salaries, dividend and lending. While its core operations might not have left much for investors to cheer, positive trends in asset quality offer hope. Reducing corporate loans has helped increase the share of higher yielding retail loans and at the same time reduced targets for priority sector lending, which are a drain on the bank's balance sheet.

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