IDBI Bank net drops 9.7 pc
IDBI Bank, on Tuesday, reported a 9.7 per cent dip in third quarter earnings to Rs 410 crore on rising bad loans and higher interest expenses.
“We had to take a hit on our post-tax profit due to a one-time provision of Rs 105 crore on account of an aviation account which has become non-performing (the bank has a Rs 700-crore bad loan exposure to Kingfisher Airlines), during the December quarter, which pushed up our gross bad loans to Rs 750 crore,” Chief Financial Officer P Sitaram said.
The bank also has nearly Rs 1,000 crore exposure to the troubled national carrier Air India, which is not a substandard asset. The bank had reported Rs 454 crore profit in the corresponding quarter last year.
A healthy 24 per cent growth in interest income to Rs 584.9 crore was offset by higher interest expenses which jumped 37 per cent to Rs 479 crore during the quarter, the bank said in a filing to the exchanges this evening, which brought down net profit and earnings per share by 10 and 15 per cent, respectively.
The bank saw an 11 per cent drop in net interest income to Rs 1,059.34 crore from Rs 1,193.27 crore year ago, whereas non-interest income rose to Rs 431.83 crore from Rs 457.96 crore.
