IDBI records 39% jump in Q3 net profit

A jump in non-interest income helped IDBI record a 39% rise in net profit to Rs 176 crore for the third quarter of 2007-08 against Rs 127 crore for the corresponding period last year. Non-interest income for the reporting quarter rose 54% to Rs 394 crore from Rs 180 crore. While the operating profit for the reporting quarter showed a 48% growth to Rs 392 crore from Rs 203 crore. For nine months ended December 2007, the bank reported a 13% rise in net profit to Rs 484 crore from Rs 417 for the comparable period of last year. In the third quarter, total income stood at Rs 2,471 crore, up 24% from last year’s Rs 1,877 crore. Of this, interest income stood at Rs 2,077 crore, up 18% from Rs 1,697 crore over the corresponding period last year. Total expenses stood at Rs 2,079 crore, up 19% over the corresponding quarter. Of this, bank’s interest expenses were at Rs 1,864 crore, up 20% from Rs 1,485 crore last year. Bank’s deposits stood at Rs 56,889 crore 51% on a year-on-year basis (Rs 37,591 crore) while advances went up by 13% on Y-o-Y basis to Rs 68,443 crore (Rs 60,466 crore) for December 2007. During the period under review, cost of funds stood at 8.02%, up from 7.2%, and its yield on assets improved to 9.33% (7.99%). IDBI provided Rs 195 crore for bad loans, up 75% from last year’s Rs 49 crore. During the period, the bank has not made any provisions for AS-15 norms, but has said that it will make the required provisions in the last quarter of this fiscal. As per the rules, every bank has to provide for employees’ pension benefits either in one go or phase it out over five years. The share of gross non-performing assets to gross advances came down to 2.24% for the reporting quarter from last year’s 2.37% while the amount of net NPA declined to 1.19% (1.55%). Its capital adequacy ratio stood at 13.3% at the end of the reporting quarter. IDBI’s share price on the BSE Sensex fell 35 paise on Thursday and was trading at Rs 59 at the end of the day. IDBI said that its life-insurance joint venture with Fortis and Federal Bank is expected to start operations in February this year, following IRDA approval for a couple of insurance products.