IDBI Bank net dips 28% in Q1 as provisioning for bad debts rises

NEW DELHI, JULY 18:
IDBI Bank has reported 28.1 per cent decline in net profit at Rs
306.95 crore for the first quarter ended June 30, 2014.

IDBI Bank on Thursday reported a 28 per cent decline in net profit for
the first quarter ended June 30 at Rs 307 crore (Rs 427 crore).

The bottomline performance was largely pulled down by a sharp jump in
provisioning for bad debts, which increased in the quarter under
review to Rs 739 crore (Rs 377 crore).

Total income grew 9.6 per cent to Rs 7,445 crore (Rs 6,790 crore). The
net profit was also bolstered by sharp increase in treasury gains to
Rs 147 crore (Rs 16 crore)

"We experienced sizeable slippages this quarter. But we do not expect
much of this strain to continue this year. I am confident that we will
not only maintain last year's bottomline performance, but will do
better than that," M. S. Raghavan, Chairman and Managing Director,
IDBI Bank, told a press conference here.

The bank had recorded a net profit of Rs 1,882 crore for the financial
year ended March 31, 2013. To support business growth, IDBI Bank has
sought capital support of Rs 3,000 crore from the Government, Raghavan
said.

Raghavan said that the bank was targeting a deposit growth of 12 per
cent and credit growth of 12 per cent this fiscal. IDBI Bank is keen
on improving its retail deposits and plans are afoot to add at least
300 new branches this fiscal.

This public sector lender's Tier-I capital is slightly below 8 per cent.

Raghavan also said that the bank was yet to take a call on whether to
reduce the base rate further or not. The base rate currently stands at
10.25 per cent.