(PTI) IDBI Bank has come out with best-ever quarterly numbers on Friday, logging in a 46 percent growth in net income at ₹828 crore for the September quarter.
The management of the bank, which is on the block for full privatisation, on Friday said the performance, has been driven by all-round good show such as massive spike in the margins and steep fall in cost of funds, improvement in asset quality and loan sales.
The results are also above its own guidance for the quarter and first half of the current fiscal. The bank is partly owned by LIC.
Addressing the media, Rakesh Sharma, the bank's Managing Director and Chief Executive Officer, said net advances grew 17 per cent to ₹1,46,752 crore, led by a massive 36 per cent jump in corporate loans and a 10 per cent rise in retail loans.
The net interest income jumped 48 per cent to ₹2,738 crore while the key net interest margin rose 135 basis points to 4.37 per cent annualised and by 35 bps from the previous quarter.
The bank's own target is 3.25 per cent but Sharma said the numbers were boosted by some tax gains during the quarter.
Even after a 9 per cent spike in employee cost due to the wage settlement, its cost to income ratio declined to 42.29 per cent, he said.
Another key profitability metric -- the bad loan ratio -- improved massively with net NPA falling 56 bps annually and 10 bps sequentially to 1.15 per cent as against its target of 1.25 percent for the full year. Gross NPAs fell to 16.51 per cent.
"I am very sure that we will have no negative surprises on any of these fronts, but will definitely have many positive surprises as we close the year," Sharma said.
He also said net interest margin stood at 4.37 per cent in Q2FY23 (and at 4.22 per cent excluding interest on IT refund) compared to 3.02 per cent for Q2FY22.
Cost of deposits came down 16 bps to 3.44 per cent from 3.60 per cent and Sharma attributed the same to the massive reduction in bulk deposits during the four years of the prompt corrective action plan of RBI.
During this period its bulk deposits came down to under 6 per cent from over 36 per cent or around ₹74,000 crore.
Cost of deposits stood at 3.36 per cent in the reporting quarter while the cost of funds came down 16 bps to 3.72 per cent for the quarter from 3.88 per cent on-year and from 3.61 per cent in the previous quarter.